Heavy trucks, construction equipment, stolen in Russia
Western models safer because of advanced technology

By John Wendle
The Moscow Times

A KamAZ truck and a loader standing parked at Moskva-City on Saturday. (Photo: John Wendle / MT)
A KamAZ truck and a loader standing parked at Moskva-City on Saturday. (Photo: John Wendle / MT)

MOSCOW — Call it the case of the missing cement truck.

Construction equipment is disappearing from Moscow's beehive of construction sites and off its jammed roads as the capital nears the peak of the summer construction season.

But rather than a sign of high demand in the booming city, the thefts appear to be motivated by a shortage in the regions and in the neighboring republics of the former Soviet Union.

The thefts highlight a seemingly insatiable appetite for heavy-duty construction equipment as the government prepares to plow hundreds of billions of dollars into improving the country's infrastructure and getting Sochi ready to host the 2014 Winter Olympics. Within months, some industry insiders fear, Moscow could be left severely shorthanded — even without the cement truck hijackers.

Over three months this spring, at least 40 KamAZ trucks and 13 cranes, cement mixers and other pieces of heavy equipment were stolen in Moscow, according to media reports. Matters got so bad that three KamAZ cranes and four cement trucks vanished in the space of one week alone.

Some builders waved off concerns that thefts would hurt their projects.

"We do not feel a shortage of any heavy construction equipment. This sector of the market is well developed," said Vitaly Korolev, a spokesman from Glavstroi, a construction and engineering firm.

Mirax Group, also denying any equipment shortage, said the thefts were the result of demand outside of Moscow, a conclusion supported by police statements.

"It's a useful business to steal these machines because they are used to build the new cottage villages just outside of Moscow. They can work there for two or three years, and no one will find them," said Mikhail Chizhenok, deputy chairman at Mirax, which is developing the Moskva-City business district, among other projects.

Mirax said it has not lost any heavy-duty equipment like trucks or cranes. It said the equipment was protected by fenced-in construction sites with guards.

Glavstroi did not say whether any of its equipment had been stolen.

Even without the thefts, Moscow is seeing a lack of construction equipment as large projects around the world draw them away, said Ruslan Vinokurov, director of project management at Cushman & Wakefield Stiles & Riabokobylko.

"Most construction companies are experiencing a shortage," Vinokurov said. "Places like the Emirates are taking up all the demand for things like high rise cranes, for example."

Glavstroi said its demand for heavy machinery is being sufficiently met by Russian producers like KamAZ.

KamAZ, which posted a net income of 1.31 billion rubles ($55 million) in the first quarter of this year compared with a loss of 1.41 billion rubles in the fourth quarter of 2007, confirmed that demand is high in Moscow — and said a few stolen vehicles would only add to the boon.

"Moscow is the most important market for us because the most money is there," Sergei Kolesnikov, KamAZ's director of marketing, said by telephone from the company's headquarters near Kazan in Tatarstan.

Last year, the company posted 3.45 billion rubles in profit on the sale of 52,671 units.

"KamAZ's fortunes will ride with the growth of the Russian economy," Kolesnikov said.

But "if, God forbid, one or two KamAZ trucks are stolen in Moscow, demand will increase here," he said.

He noted that demand has been increasing for more advanced Kamaz trucks using "expensive technical products" derived from Western technology, saying the more complicated they are, the more popular they are.

U.S.-based Caterpillar, one of the world's biggest producers of heavy construction equipment, is also seeing a surge in local sales, expecting sales to rise 50 percent in 2008, said Robert Droogleever, head of CIS operations for Caterpillar.

He declined to provide precise figures, calling them a commercial secret. But a senior Caterpillar official, Sergei Fomenko, told reporters in December that the company's sales had soared by nearly 60 percent in 2007 and he expected similar annual growth through 2012, when sales would level off to 3 percent to 4 percent, the average in developed countries. Fomenko also said the volume of the CIS market could surpass the Middle East and Africa to reach about $15 billion by 2009 or 2010.

To help meet the demand, Caterpillar will begin to produce hydraulic excavators at a new plant near St. Petersburg in September.

"It's not the cheapest country to make things in, but we had to be here to be closer to the customer, and we can deliver faster," said Droogleever, noting that Russia is the biggest market for excavators in Europe.

Droogleever noted that Russia consumes mostly bigger equipment for mining and oil projects and for infrastructure.

He said Prime Minister Vladimir Putin's plan to invest more than $500 billion on developing infrastructure over the next few years promises to only spur heavy equipment sales.

"Putin's project will cause growth in our sector," he said.

"But the question," he added, "will be how to spend the money and whether it will reach the construction companies and be used for infrastructure or be spent other places first. To efficiently spend it is the big question."

Even so, he said, "We expect a lot from infrastructure projects the government is planning, and Sochi is very exciting, even though it will all be done at the last minute."

The government has promised to spend more than $12 billion to prepare the Black Sea resort for the Olympic Games.

Droogleever expressed concern that "the whole equipment pool will go to Sochi in the near future," possibly leaving a massive shortage in Moscow.

Mirax Group, however, disagreed that Sochi might draw away equipment. "The construction contractors can buy right from Europe. There won't be a shortage here, and there is no shortage [now]," Chizhenok said.

Chizenok, whose firm rents heavy machinery by the month, day and even the hour, said expenses have gone up but this was not linked to a shortage but increasing gasoline prices.

In the meantime, cement trucks and cranes are continuing to vanish from Moscow. In just the first week of July, a cement truck and three KamAZ cranes were stolen in Moscow. City and regional police could not be reached for comment. It is probably no coincidence that the missing equipment was built by Russian producers: Without the tracking devices typically installed on Western machines, they are the easiest to steal. Western manufacturers also produce advanced keys with electronic identification chips in them that keep them from being reproduced.

"Russian and Chinese equipment is more prone to being stolen," Droogleever said.

— July 15, 2008