Henkel KGaA of Germany said today it formed a Euro3.4m venture in Russia with OAO Plastik, an auto supplier there, to make adhesives and sealants for domestic and foreign carmakers in the ex-USSR.

The 50/50 venture expects sales of Euro1.0m in each of its first three years. Afterward, it plans to boost turnover 20% annually, based on forecasts car output in Russia will rise from 1.2m in 1999 to 3.0m in 2005.

The venture, which initially will employ 55 people, would make: plastisols for joint sealants and underseals that protect vehicles against moisture and stone-chipping; and polyurethane adhesives that bond the windscreen to a car's body.

Henkel, which will retain management control of the project, will contribute engineering, machinery and technical expertise. Plastik will provide buildings, infrastructure and sales support.

The venture would be based at Plastik's facilities, almost 1,000km southeast of Moscow in Syzran, an industrial and mining centre with a port on the Volga River. It is near Togliatti, home to AO AvtoVAZ, the biggest carmaker in Eastern Europe and producer of Lada vehicles.

Plastik, which employed 6,500 people and reported sales of Euro180m in 1999, makes automotive plastics such as hat racks, impact absorbers and interior door trim.

Read a feature on Russia's auto industry here.

Contact Ryan James Tutak, associate editor of just-auto.com for Eastern Europe:
E rjt@pronet.hu
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