Azovmash Invests USD 12 mln into Modernization

Azovmash, the holding for Azovzahalmash (AZGM: BUY) and Mariupol Heavy Machinery (MZVM: BUY), reported that it has invested about USD 11.9 mln (UAH 60 mln) into modernization since the beginning of the year. Inna Perepelytsya: Part of the investments were directed into upgrading casting production, which are limited in the CIS, decreasing the companies’ dependence on external casting limitations. The Azovmash companies can currently satisfy about 70-80% of their need for casting inputs, allowing them to maintain production increases in line with our forecasts for 2007. We maintain our estimates and BUY recommendations on AZGM and MZVM.