Inter RAO Group General Electric

S. Yastrebov, governor of Yaroslavl Region: “Regional industry gets good prospects in conditions of import substitution”

05.12.2014

At the time of general stagnation of the Russian economy, Yaroslavl region shows growth in various sectors, and this indicator is higher than the average for Russia. In particular, following the results after nine months of 2014 the region retains growing investment into the core capital (104.8 %), and enjoys good prospects in conditions of the import substitution policy. Governor of Yaroslavl Region Sergey Yastrebov told the Interfax news agency about the reorganization of the economic development model of the region in the light of import substitution of production facilities and technologies.

“Sergey Nikolaevich, import substitution is especially topical in today's realities. The region has now an opportunity to improve the situation with the development of certain production sectors. What are these sectors, and which of them are the priority ones?”

“Indeed, today import substitution issues become the most topical. Unfortunately, now the economy of Russia in whole and of Yaroslavl region highly depends on the supplies of imported equipment and products. In many industrial sectors in Russia import ratio is estimated at above 80 %.

Following the results of analysis done in June 2014 by the Ministry of Industry and Trade of Russia, the following sectors are found to be the most promising from the point of view of import substitution:

- Machine tool industry (the import ratio is over 90 % according to different estimates).

- Light industry (70 – 90 %);

- Electronic industry (80 – 90 %);

- Pharmaceutical, medical industry (70 – 80 %).

We realize that import substitution in these and other sectors can be possible only with appropriate production capacities and competitive enterprises, which can offer high-quality products at the market prices.

In the structure of goods import to Yaroslavl region from far-abroad countries, our region mostly depends on the supplies of engineering products – 59 % of the total import. Equipment and spare parts constitute 64 %, the main importers of which are Germany (24 %), Italy (13 %), China (12 %), Japan (8 %), and such analogues are not produced in Russia.

Our manufacturers of paints and varnishes receive raw materials (titanium dioxide, pigments, resins, solvents) from Ukraine, USA, and EU countries. Limited import to Russia can result in the reduced production volumes and narrowing of the color palette of paints and varnishes.

Now we are monitoring the situation. We assess the enterprises themselves, production risks, and choose alternative Russian suppliers and those from the Customs Union countries and the East Asia. We consider the possibility to set up production of alternative products for import analogues by means of upgrade and construction of new production facilities.”

“As far as I know, some enterprises in Yaroslavl region are already restructuring their work.”

“Yes, in particular, NPO Saturn is already chosen as the main contractor for the creation of domestic gas turbine plants for ships with focus on full import substitution.

Today the enterprise is building an assembling and testing facility for offshore gas turbines, which will allow testing any units for all types of naval and civil vessels. Three engines of different power were designed during the formation of offshore gas turbine construction base. By 2017, NPO Saturn will master a full production cycle of an offshore gas turbine engine and creation of assembly units on its basis.

Here are some other examples:

- Russkie Kraski reconstructs their workshop to organize production of polyester and epoxy resins;

- Plant of Powder Materials LLC is going to build a plant for making powder-type paints with the output up to 15,000 tons per year;

- Association “Yaroslavl Paints” is planning to build a workshop of alkyd binders for decorative paints and varnishes with the output of 8,000 tons per year.

- Yaroslavl Carriage Repair Plant "Remputmash" considers the possibility to master production of hopper carriages for technical carbon, chilled coke and peat transportation. These products are still manufactured only at the Ukrainian enterprise Dneprovagonmash.

- Hydromechanization Plant is currently ready to manufacture different types of dredgers and soil pumps, which are similar to those manufactured in foreign countries, such as USA, Sweden, Holland, Italy, Japan, Germany, and Ukraine.

The enterprises of the region are ready to purchase similar raw materials, components and equipment (if any) from local manufacturers, but these products shall meet requirements of modern global standards. That is why our common goal is to form favorable conditions for the development and competitiveness enhancement of the industrial economy sector in Yaroslavl region.”

“Can we consider appearance of new production facilities in Yaroslavl region from the viewpoint of solving import substitution tasks?”

“Definitely. This year, Russian Gas Turbines LLC started production. It is a joint venture of General Electric, INTER RAO UES, and Rostec (United Engine Corporation Management Company OJSC). Investment amount into construction was approximately 3.4 billion rubles. Production volumes of the plant will allow satisfying the growing demand in Russia for high-efficient mid-size power units for the heating and power cogeneration projects. Besides, a new plant will give 150 work places to people living in Rybinsk.

Last year, UEC – Gas Turbines (Saturn – Gas Turbines OJSC located in Rybinsk is a parent company of the corporation) started mastering the compressor manufacture for gas compressor units as an alternative for Ukrainian equipment.

At the end of November, the enterprise launched a unique test bench for the factory tests of power and gas compressor units. The new test bench will reduce considerably the transition time from test sample to serial production and ensure the operation of manufactured equipment at a completely new level. Now the time of power units assembly, startup and adjustment will reduce at least 4 times.

With the introduction of this equipment, the enterprise can get a considerable order for the supply of gas turbine units for power generation facilities construction in the Crimea.

Among the projects to be implemented soon, I cannot help mentioning Design Office “Lutch”, which creates the first workshop in Russia for the serial production of assembly units with unpiloted short-range aircrafts. The project is implemented in cooperation with Rybinsk Instrument Engineering Plant. The first production site is to be commissioned in 2015.

In fact, the import substitution policy provides for good prospects for many enterprises in Yaroslavl. Therefore, we should catch new opportunities and engage all Yaroslavl enterprises. There are some positive examples already. For instance, the ship-building yard “Vympel” started the project on construction of a new marine hydrofoil passenger vessel Kometa 120M to carry passengers in the coastal offshore zone. The situation at Rostov Optical and Mechanical Plant producing telescopic sights has improved significantly. Yaroslavl radio plant that supplies components for GLONASS is developing actively.

Opening of a new plant in Yaroslavl by Teva (Israel) also fits well the general strategy of pharmaceutical industry development, according to which the share of domestic medicines in the total consumption shall grow from 20 to 50 % by 2020. Investment in new production has made 1.5 billion rubles, and 200 work places are to be created. At the first stage, the plant is going to produce 1 billion tablets per year.

Production development requires comprehensive approach. It is impossible to launch production without workers. That is why we pay special attention to training of our employees for new production facilities.

On December 1, the newest educational center has been opened in Yaroslavl in cooperation with Takeda, on the basis of the chemical and technology lyceum. Thanks to its establishment, our growing pharmaceutical cluster will be fully supplied with professional and qualified staff. Besides, construction of the center of transfer technologies and the medicine certification center is almost finished. As a result of implementing these projects, the pharmaceutical industry of Yaroslavl region will become self-sustaining and will comprise production of medicines, personnel training, process developments and certification.

The import substitution strategy leans on the production development as a whole, on the quality improvement of manufactured goods, technologies applicable at the enterprises, and on development of innovations. Yaroslavl region is among the regions with the most developed industry, and we see many important and perspective tasks for ourselves in the field of import substitution and technology upgrade.”

Source:  Interfax