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. Last Updated: 07/27/2016

Sweet Deal For JV Novotruck

Novotruck, a joint venture between Russian truck maker ZiL and the U.S. firms Caterpillar and Kenworth, has received its first big order for 110 refrigerator trucks from Mars Inc. subsidiary MasterFoods, an official from MasterFoods said. Nikka von Liemandt, director of external relations at MasterFoods in Moscow, said Tuesday that the purchase was part of her company's strategy to maximize investment in Russia and use locally manufactured equipment. Interfax reported that the trucks, estimated to be worth $2.5 million, would be equipped with U.S.-made refrigeration equipment and delivered by the end of the year. Novotruck and ZiL officials declined to comment on the agreement Wednesday. Novotruck was set up in mid-1993 as a 50/50 joint venture to produce and sell hybrid trucks, built at ZiL's factory in Moscow and fitted with Caterpillar engines. But up until the MasterFoods order, the joint venture had sold very few of its relatively expensive trucks. Von Liemandt said the trucks would be used to improve the distribution of Snickers, Mars, Bounty and Twix ice cream bars in Russia. She also said the trucks might later be used at a new MasterFoods production facility south of Moscow. MasterFoods disclosed plans earlier this year to build a major manufacturing complex in the town of Stupino to produce its popular ice cream and candy bars locally. Construction at the site is scheduled to begin this month with actual production planned to begin by the end of 1995. The Novotruck deal represents a major success for the joint venture at a time when its Russian partner is in deep financial trouble. Suffering from a general debt crisis and customers' inability to pay, ZiL sent most of its 80,000 workers on partly paid leave last month. At ZiL's first shareholders' meeting last week, small investors accused the company's directors of negligent management. Interfax quoted an official with Novotruck as saying that the ZiL shutdowns would have no effect on Novotruck production. The official said that another order for 90 trucks from a major soft drink company was coming up and total orders would be for 400 trucks this year.