General Manager

PROMTRACTOR JSC

CHAZ JSC

KURGANMASHZAVOD

MLODIK

Semyon Gennadievich

Cheboksary, August 2005

MISSION

PROMTRACTORSolving customers demand in completing and maintaining

wheeled and tracked machinery and technological system for common excavation, transferring bulk solids, pipeline construction and timber harvesting.

CHAZ Production and carrying out supplies of high durability

elements of undercarriage systems for assembling plants of largest producers of industrial machinery as well as forgings, steel- and iron-castings.

PROMTRACTOR AND CHAZ

Overall production territory – 1 800 000 square meters

Promtractor as well as Promtractor-Promlit and Promtractor-Servis – enterprises with almost 30-year experience of designing and manufacturing tractor machinery and spare parts for them

CHAZ (Cheboksary Aggregate Works) – more than 48 years is a supplier and high-quality elements for undercarriage systems for assembling plants of largest producers if industrial machines as well as forgings, steel and iron castings.

The main activities of enterprises are :

tractor machinery;

components for assembling lines;

spare parts for tractors and automobiles;

elements of freight cars .

TECHNOLOGIES AND EQUIPMENT - PARTNERS

MARKETING STRATEGY : EXPORTDIRECTIONS FOR 2005-2006

MarketMarketCIS Ukraine; Middle East (former SU republics)Foreign countries South-Eastern Asia; Latin America; Middle East; Africa.

ProductProduct creating specialized modifications, adapted to the requirements, demanded be local market; production and supplying sets for assembling plants; launching into production and sales the complete sets of undercarriage elements for tractor machinery.

PromotionPromotion development and implementing sales programs directed for specific markets. localization of tractor machinery in regional markets organization of maintenance and spare parts supplies

MARKETING STRATEGY: RUSSIA’S MARKETDIRECTIONS FOR 2005-2006

Market Market oil and gas industry; energy; gold-mining industry; coal and mineral-mining industry; road construction; Russian railways; timber industry municipal economy.

ProductProduct enlargement of quantity of base models and creating specialized modifications, adapted to customer’ requirements; launching into production and sales the whole set of tractor undercarriage elements.

PromotionPromotion offering to a customer of new conditions of purchasing machinery; developing service net; transferring spare parts to the consumption regions; localization of services into regional markets.

INSTRUMENTS OF PRODUCT PROMOTIONCommunication Communication regional presentation; branding; industrial exhibitions; specialized magazines; corporative magazine.

Sales stimulationSales stimulation Individual approach to a customer; leasing; Trade-In; forfeiting.

Market measuringMarket measuring Marketing research; Evaluation of customer’s satisfaction; Establishing consulting counsel with participation of leading

domestic and foreign consumers.

INNOVATIVE POLICYMAIN DIRECTIONS

using newest technologies;

equipment modernization;

increasing quality;

outsourcing.

Promtractor’sThe first deputy of General Manager

CHAZ’ deputy General Manager for sales

Nikolay AleksandrovichGROMOV

Directivity for a client- Philosophy of the activity of

the group of companies «Promtractor».

PARTNERS READY-MADE MACHINERY AND SPARE PARTS

DIRECTIVITY FOR A CLIENT

Consumer

MaintenanceSales

stimulation program

Perfecting the product

Our goal is to increase customer’s satisfactionthrough increasing quality of products and services

SALES STIMULATION PROGRAM

LeasingLEASING — the form of a long-term rental contract implying the right of leasehold redemption.

Leasing stock of orders by 01.08.05 makes 186 units of machines for total of 14 million USD.

ForfaitingFORFAITING— crediting of international operations in the form of purchasing from the exporter bills of credit, accepted by and importer. The system of deferred payments for a period of 1 to 7 years depending on the customer’s country is established.There is a working contract concluded with a company “KAZPHOSPHAT” for total of 1,6 millions US dollars.

TRADE IN

There are 4,5 thousand tractors of 15-35 tons in use in Russia with a life time of more than 5 years. The market capacity of second-hand tractors exceeds 200 millions USD.According to TRADE-IN program used equipment of the following producers is accepted : Promtractor; Caterpillar; Komatsu; Chelyabinsk Tractor Plant.

SALES STIMULATION PROGRAM

Providing working condition

of machines during life-time

Technical service and repair

of tractors

Modernizationof the material base of the service net

Move of the spare parts

to the regions

Technical Audit

Service

“Promtractorservice” jsc. has changed its ideology for aiming at technical

service and tractors repair

SERVICEModernization of the material base of the service net

Technical equipment of the service centers

Mobility of the service

increased

Engines service is organized

Technical equipment is modernized

Supply of spare parts

Three mobile service stations

«МАРТ» introduced

We got the authorizations to serve three type of engines• ЯМЗ;• CUMMINS;• IVECO.

Introduced:• Engine Diagnosis and Repair equipment ofCummins (6 sets;• «Тest» system;• Space diagnosis system – «Open coordinates».

Organized: •14 territory warehouses of CHAZ (based at Service centers);•130 Dealers net is organized in regions

Moving of the spare pars stocks in the regions

Service

CHAZ Central warehouse

Dealers’ stocks in the regions

CHAZ warehouses on the base of “Promtractor”

Service centers

Mobile warehouses of CHAZ

• Q-ty of CHAZ regional dealers is increased on 26% (130 organizations totally);•14 territory spare parts are set on the base of “PROMTRACTOR”Service Centers

Organization of technical audit

• 280 Clients’ specialists were trained to service and to operate the

machinary

•Tractor fleet optimization in «СУЭК», «Полюс», «Алроса»

companies were initiated .

SERVICE

Technical Audit Scheme

Classification of the tractors

fleet

Analysis of the technical

condition of the fleet

Planning of the requirements of the machinery

of different classes

Development of proposal for

optimization

Optimal works technologies modulation

Mining works technology study

Design of technical background

of the project fulfillment

Appointment ofterms

and conditions of the fleet optimization

ServiceTractors Technical Service And Repair

1. Realization of the Programme of the Subscribers’ service.

12 Contracts for complete service of 114 machinery units were

Concluded with the companies , and among them :• ОАО «Russian railways»;

• ЗАО «ПМК 5-Центргаз» (Gazprom);

• ООО «Бургаз» (Gazprom);

• ЗАО «Слюдянка».

According to the contracts service for 21 million rubles was made.

2. Capital and maintenance repair service was made for 22 million rubles

20

18

16

14

12

0

10

8

6

18,4

11,7

9,8

8,3

6,0

4

2

days

2001 2002 2003 2004 2005

ServiceReduction of the term of the repair of the tractor under guaranty period

Increase of the goodsconsumption

conditions

Increase of the quality stability

Decrease of the cost

of diagnostics and repair

Adoption to the territory

conditions

Operator’s work condition

improvement

Improvementof the production technology level

Designing new machinery Outsourcing

Goods Modernization

Development of the base product line

Development Of The Product Line

Low class tractors of CHETRA Brand was awarded by the

Silver medal «Year Brand/EFFIE-2003»

Today we introduce to the market the new sub-brand CHETRA-HEAVY -Line of heavy duty industrial tractors of the world class

Running Resource before the capital repair 18 thousand mth

Fault free term as per analogous international tractors .

Technical efficiency is 6-12% higher than that of the international analogue

Engine Cummins QSK 19C;

power 590 hp;

weight 68 тn.,

Transmission microprocessing control;

Noise and vibration proved cabin,

Hydraulic servo control of the attached accessories ;

Engine electronic control

Development of the Product Base Line

Development of the Product Base Line

Acceptance trial

Bulldozer CHETRA 9.01, Krasnodar Region Company «Даурия-ЮГ» (2 pcs.) – nonfailure operating time since 01.11.04 г. makes 3700 and 3800 mth

Loader CHETRA 60.01, Nerungry Company «Малые разрезы Нерюнгри»

(2 pcs.) -nonfailure operating time since 01.01.04 г. makes 6000

and 8000 mth

Bulldozer CHETRA 11 unified with CHETRA 9 :• Reduced height for 200 мм;• Hydraulic control of the attached implements• Microprocessor control of movement;• Improved toughness of the frame from applying

casted back axle

Family of the wheel machines based on CHERA 60 CHETRA 60Л – for working on timber-handling bases• CHETRA К-11 – compactor for compression of domestic waste;• CHETRA Б11 – wheel machine for fulfillment of the dozer works

Axles produced by “FON” (Poland), transmissions “DANA SPICER” (Belgium), hydraulic steering and hydraulic pumps “ZAUER DANFOSS” (Germany-Denmark) are applied in the machine construction.

EXTENDED GAMMA OF THE BASE PRODUCTS

• track groups for tractors Komatsu D375, D155, Caterpillar D9H, D10N/R, D6R, СHETRA HEAVY 4 are launched into production

• realization of the program for installing production of sets «track group-track roller» for tractor machinery of imported machinery (Caterpillar D7, D8, D10, D11, Dressta TD15, TD25).

EXTENDED VARIETY OF BASE PRODUCTS

• increasing of production capacities for manufacturing axle-box frame А100.10.009-0 and friction strips М1698.02.001/003 for railway freight cars;

the production of з-channel water-heating radiators have been started ;

• the production of design-locks have been started.

the production of sprockets and track groups for rice-harvesting equipment T-150 have been started,

• Machine complex for railways transport system and the divisions of emergency situations;

CREATING SPECIAL MACHINES

• creating of machine complex for pile driving, carrying out drilling works and anchor screwing (together with the factory of construction machines).

• specialized machine for transferring assembling lines at mineral-mining enterprises;

• specialized dozer for application in mines;

Climatic Eberschpeher heaters (Germany); neutralizer for working in mines (Kazakhmys); air scrubbing of advanced dust filtration; Convecta conditioners (Germany); variants of lacquer coating for tropical application of spare parts.

Geological variety of machines Т11.01ЯМ, Т15.01ЯМ, Т20.01ЯМ, ТМ25.01 with specific soil pressure 0.76 to 0.43 kg//square m; sprung undercarriage system for Т20.01, CHETRA HEAVY 4.

ADAPTATION TO ENVIRONMENT OF APPLICATION SITES

Ecological

Installing imported engines of Cummins and Iveco with up-to-date ecological characteristics of European standards (ЕURO 3 and ЕURO 4)

introducing a unique in capacity cross-wedged mill for

manufacturing bodies of revolution (shafts, axis) for

increasing quality of track roller shafts;

applying to production new processing centers Mazak,

Mitsubishi (Japan), used for manufacturing high-precision tool

set ;

purchasing laser complex Mazak (Japan) intended for improving

accuracy and efficiency of manufacturing sheet articles;

planned for September 2005 launching induction furnaces in

iron-cast workshop that allows to increase stability of the

structure of cast iron as well as mastering production of castings

from ductile iron;

implementing technology of vacuum-film moulding of large-

sized cast by «Genrich Vagner-Sinto» license (Germany-Japan)

that allows to improve the quality of castings

INCREASING OF TECHNOLOGICAL LEVEL OF PRODUCTION

Launched into production: cabin of the 5–th generation «Buran-styling-atelier» (Russia); cabin heaters «Ebenspeher» (Germany); conditioners Convecta (Germany); electro-hydraulic transmission control Omega (Russia); hydraulic control of ripping equipment Bosch-Reksrot» (Germany); designing solutions for improving dust-safety; microprocessor-based control over the gear-box Omega (Russia), Dana (Belgium).

IMPROVING OPERATOR’S COMFORT

COSTS OPTIMIZATION FOR DIAGNOSTICS AND REPAIRMENT

Launched into production: diagnostic center «TEST» for tractor acceptance after assembling;• diagnostic system «SKAZ», for diagnose during the operating process;• satellite system of distant diagnosing «Open Coordinates»;• centralized lubrication system «Lincoln», for reducing servicing labor costs

INCREASING OF QUALITY STABILITY

Incorporation of approaches «Statistic

process control»

RecertificationСМК ISO 9001:2000

The electronic system of acceptance of tractors «ТЭСТ»was incorporated

The audit of CHAZ JSCwas conducted by Caterpillar

representatives

Certification of the system of ecological

management ISO 14000:2000

STABILITY OF QUALITY

Realization of thedraft «total production

optimization»

Toughening of technologicaldiscipline of

production

Training and motivation

of personal

Warranty

Till july 2005 г. warranty terms enlarged:However if operating time during the first

year exceeds 3000 operating hours, Warranty is prolongated for one more

year. Without any reduction of operating time. If 1st year operating time lesser warranty makes up 24 months, but no more than

3000 operating hours.

Warranty period for spare parts such as track group and rollers for tractors Т-170, D355, D60, D9N, D155, enlarged by 400 operating hours for soils containing no more than 35 % quarts and now it is 2200 operating hours.

NEW CLIENTS