Cramo and Ramirent form Russia/Ukraine joint venture

Cramo and Ramirent are to create a joint venture for their Russian and Ukrainian businesses. The two companies said a single, strong entity with greater resources would help them exploit the opportunities of the fast growing market.

There will be speculation that the 50/50 joint venture could be the start of a wider cooperation between the companies, but that was dismissed by a spokesman for Cramo, who told IRN that it it was a "one-off" deal.

The two companies, which are major competitors in the Nordic region and eastern Europe, said they had complementary depot networks in Russia and the Ukraine, no great overlap in customers, and also a good mix of products. Cramo is stronger in modular space and small tools while Ramirent has a bigger presence in larger equipment.

The new company will have a new brand identity and will be managed by an internal candidate who has yet to be announced. However, Anton Artemiev, a former senior executive at Carlsberg group in Russia, will be chairman of the board.

The combined operations will comprise Cramo’s €19 million revenue Russian activities (excluding Kaliningrad) and Ramirent’s €33 million Russian and Ukrainian operations. The JV will have 22 locations, revenues of €52 million and 400 employees.

To reach an equal ownership in the joint venture, Cramo, because of the smaller size of its business in Russia, will pay Ramirent €9.2 million in cash.

“The Russian and Ukrainian markets offer significant growth potential for equipment rental and through the joint venture we have a strong foundation to invest for accelerated growth”, said Magnus Rosén, president and CEO of Ramirent Plc.

“Combining our efforts, we will be able to present a compelling value proposition for both new and current customers, to further develop the rental industry as a whole in these markets”.

Vesa Koivula, president and CEO of Cramo, said; “For a few years it has been evident that Russia and Ukraine are in the early phase of developing a modern rental industry. The construction market is huge and the momentum is significant. Taking the lead in the rental industry offers interesting opportunities, but also big challenges.

“The combined resources of our already successful businesses give us a clear head start and a unique platform for a long-term commitment in Europe’s most interesting region”.