Avtokran JSC, Russia’s largest manufacturer of mobile cranes, has lost its US backer, Yul Armani and his company IBA after a disagreement. But development of Russia’s first 100t all terrain is continuing without him.

US entrepreneur Armani took a minority stake in Avtokran in 2001 to help launch its Ivanovets-branded cranes onto the world market. Armani said that by offering US guarantees he had been able to secure deals with suppliers from western Europe that might otherwise have considered a Russian customer to be a financial risk. He also claims credit for finding customers, including Terex, for slew rings produced by Avtokran. ‘IBA became the driving force behind the development of Russia’s first 100t crane and the sale of Avtokran’s slew rings to western manufacturers,’ Armani claimed.

Armani has now severed all connections with Avtokran after a disagreement in December. He said: ‘The principal of IBA’s Russian partner and I have found it necessary to part ways due to irreconcilable differences over our business relationship and how to conduct business with western companies. I have decided to move on to other projects and I will no longer be affiliated with Avtokran.’

The dispute centres on differences in Russian and American business culture and procedures. Armani explained: ‘One of the goals I set for myself at the onset of this project was to instill in the principals of my Russian partner the need to conduct business in a professional and businesslike manner and with all due attention to fiscal responsibilities, but I have fallen short of that goal and I no longer feel comfortable representing the principals of my Russian partner.’

Armani’s energy and appetite for the challenge have also been diminished since he was badly injured in a car crash in Moscow in May 2003.

Armani’s former business partner in Russia is Oleg Barinov, president of the NAMS association, which controls Avtokran. Barinov said that Avtokran would continue to develop the two projects previously led by Armani production of a 100t all terrain crane and the export of slew rings.

Barinov declined to comment on the reasons for the separation but he denied that Armani’s role was critical to the international success of Avtokran. ‘Mr Armani was a hired hand who managed several Avtokran projects that were started long before he and his company, IBA, became Avtokran’s partner,’ Barinov said. ‘Now these projects will go ahead without Armani.’

Avtokran’s first 100-tonner, the KS-8973 (described in the October 2003 issue of Cranes Today, pp18-19) is still not complete and is several months behind schedule. ‘We are finishing the assembly of the first crane and plan to certify it locally in about two months,’ NAMS vice president Andrei Glukhov said.

According to Glukhov, Avtokran reached its production target for 2003 of 1,300 truck-mounted cranes in 2003, compared to 1,258 units in 2002.

In 2004, Avtokran will focus on further increasing its output and reacting to the fast-growing demand for mobile cranes in Russia, Glukhov said. He expressed confidence that the local market could swallow up to 50% more cranes a year from Avtokran.