Deputy Prime Minister — Head of the Ministry of Industry and Trade — about what challenges the Russian industry still has to face after 2022The Russian industry barely had time to recover after the pandemic, as new obstacles arose in front of it:
related to sanctions pressure and violation of logistics, as well as the tasks set by the conduct of a special military operation. Denis Manturov, Deputy Prime Minister and Head of the Ministry of Industry and Trade of the Russian Federation, in an interview with TASS, spoke about state support measures in industry, how international partnership will develop in the new conditions and what is planned to be produced at car factories after the departure of foreign companies, as well as what products may be produced under the Aurus brand in the future. In addition, he reported on the production of which aircraft units it was possible to establish in the country and how many Tu-214 aircraft with the PS-90A engine are planned to be produced annually by [/b] 2026.
[b]— Denis Valentinovich, on the eve of the New Year it is customary to sum up the results. What, in your opinion, was this year for the Russian industry? — The past year has been very eventful for the Russian industry and in many ways indicative: despite all the difficulties, it demonstrates good results and sustainability.
The correction of the industrial production index in the manufacturing industry by the end of the year is expected to be no more than 3%. We have recorded a positive index in industries focused on domestic demand: the production of medicines and materials for medical purposes, computer equipment, electronic and optical products, finished metal products, paper. In terms of packaging, the issue with the production of all necessary nomenclature was resolved. Work is underway on projects that are strategically important for the country: neon production has been launched on the basis of Bauman Moscow State Technical University, the icebreaker Yakutia has been launched, the state flag has been raised on its twin brother Ural, the electronic engineering program has been launched, despite enormous pressure, the implementation of previously launched projects in the aircraft industry continues. You know that the automotive industry has suffered more than other industries, but by the end of the year we see that the situation as a whole is beginning to stabilize.
Large-scale tasks for the industry were set by its own and partial mobilization. And here the enterprises manage to cope with the increased needs of the main customer, rebuild and increase production, expand the staff.
New territories have become another area of increased attention for us this year. We have built direct interaction with the subjects, established contacts with the largest industrial partners who help to resume the work of local enterprises. The process of synchronizing the legislative base of the new regions with the federal one has been launched, which will give them the opportunity to use all support measures. Taking into account the need for comprehensive restoration of territories, it is necessary to prepare an individual program of socio-economic development for each subject.
— What measures of state support allowed us to stay afloat?— The industry managed to solve the tasks set due to the safety margin formed in previous years, as well as operational anti-crisis measures.
As part of these measures, more than 800 system-forming organizations received preferential revolving loans totaling more than 1 trillion rubles. Another 700 enterprises across the country benefited from grant support through regional Industrial Development Funds (FRF). In addition, the Federal Industrial Development Fund has financed 200 projects worth 87 billion rubles since the beginning of 2022. And another 119 projects totaling loans of 113.8 billion rubles have been approved by the FRP expert council and are in the process of preparing contractual documentation. Work continued on the provision of a Single regional subsidy — this year the volume of its financing amounted to 3.7 billion rubles, which is significantly more than the amount that was provided to the regions in 2021. As for the development of industrial infrastructure, the number of industrial parks and technoparks in the regions is growing. By the end of the year, we expect that the total number will be about 420 parks.
Financial support from the state turned out to be extremely effective and in demand, and the consequences of sanctions that unfriendly countries were counting on were clearly overestimated. Enterprises were able to save jobs, pay salaries to employees, form stocks, reconfigure cooperative ties and logistics.
— The disruption of logistics chains this year caused the need to reorient both export and import supplies. Which countries have we managed to strengthen cooperation with?— In international cooperation, we are increasingly focusing on our main partners from among foreign countries — the EAEU and CIS, SCO, BRICS, the Arab world, Asian, African and Latin American countries.
I would like to note that these regions account for more than half of the world's population, as well as critical resources and technological competencies. At the same time, the main emphasis, of course, is on the development and launch of domestic products, primarily for critical nomenclature.
— You called the automotive industry one of the most affected sectors. Since March, most foreign automakers have left the Russian market. And already in November, we revived the production of Moskvich, not hiding that foreign colleagues are taking part in the project. Are there any fears that instead of developing domestic, we will find ourselves dependent on new suppliers?— Initially adopting the strategy for the development of the automotive industry back in 2007, we proceeded from common sense and optimal economic conditions.
All these years, we have been systematically increasing the level of localization. And for the main brands, manufacturers have really brought it to a high level. But the problem turned out to be something else: the foreign owners themselves simply left and wanted to take all their competencies and developments with them. At the same time, component manufacturers, including foreign ones, remained in Russia — those who have already localized. But, since the brand itself left, at some point they had nothing to produce.
Today we are forming a different design: enterprises and factories should have Russian owners who work in cooperation with foreign suppliers from friendly countries. That is, competencies and technologies will be developed in Russia, and technological independence will be more stable. For example, Moskvich: the company belongs to Moscow, management is given to Kamaz, which, in turn, has already attracted a foreign partner. That is, the main stakeholder should be Russian.
— Some enterprises of the departed foreign brands have already begun to be mastered by Russian manufacturers. And what will happen to the Toyota plant in St. Petersburg, which, according to the latest data, has begun to undergo a conservation process?— The decision on the future fate of the Toyota plant is "at the exit".
After the production stop, the plant in St. Petersburg underwent the conservation procedure. And now the Ministry of Industry and Trade, together with the St. Petersburg government, is working on possible options for further development and targeted use of the production site. Most likely, it will be the release of cars. As for which ones, no decision has been made yet.
— Are they leaving with a buyback option?— I think it's unlikely.
— It is planned that by the end of the year Moskvich will produce 600 cars, 200 of which will be powered by an electric motor. There is very little time left, have electric cars started to come off the assembly line?— The previously announced plans have not changed — by the end of the year 600 cars, including 400 cars with an internal combustion engine and 200 electric vehicles, will come off the assembly line of the Moskvich plant.
There are no cardinal changes.
— In the Soviet years, our cars were actively exported, this also applied to Moskvich. Are there any promising foreign markets for this and our other cars today? And what volumes can we talk about?— As our own market becomes saturated, and this is the key task now, the prospects for export sales will be worked out.
This approach is now generally relevant not only for Moskvich, but also for other automakers. At the same time, the EAEU and CIS countries remain traditionally significant markets for the Russian automotive industry. The plans of Avtovaz, for example, include about 20 thousand cars for export in 2023. In parallel, the company is considering the possibility of entering the markets of new countries on the African continent.
— You said that by the end of the year it will become clear what will happen to the plant of another foreign manufacturer — Mercedes in Esipovo. Is the deal completed?— The transaction on the transfer of assets of Mercedes-Benz to the Avtodom dealer is being prepared for consideration by the government commission for the control of foreign investment.
Mercedes is in the process. I hope that they, together with the Russian investor, will find a solution in the near future after all. And there is a high probability that there will be an automobile production. Avtodom, in turn, will already attract industrial partners, because they are not manufacturers after all, they know how to sell and service.
— Let's talk about another segment. Not so long ago — at the end of September, the presentation of the new Aurus Komendant crossover took place. How localized is this car and how much is planned to be released in 2023?— Great car.
About 70% of the suppliers of components for the brand's machines are Russian. All the main components — the power plant, transmission, interior solutions — are created in Russia. Moreover, the developments that have been created and are being created are already being integrated into various segments of the automotive industry, as well as into other industries. In particular, its engine was adapted for use in small aircraft.
— And besides aviation, in which areas will we be able to meet the Aurus brand?— In fact, there are a lot of companies that want to get the right to use the Aurus umbrella brand on their products.
For example, the manufacturer "Russian Climate" expressed such a desire. They want to produce climate technology under the Aurus brand. We have agreed this to them, and they will pay royalties to the state represented by FSUE NAMI for using the Aurus brand. There are a lot of such examples. There are ideas related to business aviation and clothing of the corresponding brand, in terms of shipbuilding - for yachts.
— Earlier it was reported that Aurus, together with its Emirati shareholder Tawazun, are developing the company's dealer network in the UAE, and also that the assembly of the brand's cars in the Arab Emirates is being discussed. Are these ideas still valid?— Yes, they retain this intention.
I think that next year will be organizational, and most likely, assembly in the UAE will begin in 2024, simultaneously with the appearance of a dealership.
— The government has decided to increase the recycling fee for special equipment in 2023. Is the indexation of the collection for passenger cars expected next year?— We are closely monitoring market changes, including the dynamics of imports.
Appropriate decisions will be made depending on the current situation.
— There is very little left until the end of the year. With what figures on the production and sales of cars will we complete it?— Production volumes will exceed the mark of 600 thousand cars.
The volume of sales of new cars is expected to be around 800 thousand units.
— The sanctions have not least affected the aviation industry. Foreign experts predicted disassembled planes for Russia. Have we managed to avoid an acute shortage of spare parts for aircraft?— The issue of maintaining the airworthiness of SSJ-100 aircraft has become the most urgent in the current conditions — the fleet of Russian airlines is about 150 cars, and the load on it has increased this year.
We managed not only to avoid an acute shortage of spare parts, but even to increase the flight performance and maintain the regularity of departures at the level of 98%. This is a good indicator in the "regular situation", and even more so in the current extraordinary conditions.
First of all, it was possible to solve the issue with the units subject to the greatest wear — tires and brakes. To date, their production has been established in Russia. In addition, 35 foreign components have been repaired, primarily those that most often require replacement. Supplies of materials and products of general use — aviation oils, special fluids, lubricants, fasteners and so on have also been established.
As for the larger aircraft systems, the main emphasis is placed on the program of the imported SSJ-NEW — many systems with the Russified version of the aircraft will also fit the SSJ-100, their installation will not require any changes to the design.
— Quite recently, the preparation of the first MS-21 airliner for pilot operation experiment was started. When will the second and third planes join the preparation? When is it planned to start the experiment itself?— Flights with the participation of Rossiya Airlines have already begun.
The first passengers were Santa Claus, Snow Maiden and the governor of the Nizhny Novgorod region Gleb Sergeevich Nikitin. The second and third planes should join the flights within the next year.
— Earlier, you announced a rather ambitious goal, taking into account the termination of the supply of foreign spare parts, to transfer more than a thousand aircraft to Russian airlines by 2030. How many planes are planned to be produced next year?— At the end of March, at a meeting with the President of Russia, the contours of the civil aviation development program were defined, taking into account the current situation, and the main parameters were fixed.
By 2030, it is expected to deliver about 1,000 aircraft. Of these, the United Aircraft Corporation (UAC) accounts for about half — about 500 pieces, including 270 pieces — MS-21-310, 142 pieces — SSJ-NEW, 70 pieces — Il-114-300, 70 pieces — Tu-214 and 12 pieces — Il-96.
The next 2023 will, in fact, be a transitional period from the introduction of unprecedented sanctions and the withdrawal of foreign manufacturers of equipment from our country to a new model of development and therefore in many ways decisive. This also applies to the supply of aircraft mass—produced in Russia with a large number of imported components - they will be completed next year. The new aircraft will arrive fully import-substituted, with Russian systems and units. The next year will be required in order to complete the creation of Russian units, engines, to form a completely Russian look of the aircraft line and launch them into a series.
In particular, the production plan for 2023 provides for the delivery of two ready-made SSJ-NEW aircraft, but first we need to pass tests and certification. The launch of a full-fledged series is envisaged by the program in 2024. According to MS-21, next year is also the period of completion of import substitution, preparation for the launch of the series from 2024.
— Which airlines will receive the first Tu-214 aircraft with the PS-90A engine and in what volume?— The Tu-214, along with the import-substituted Superjet and MS-21, will be included in the line of passenger aircraft that will ensure the sustainable functioning of Russia's transport infrastructure in the future.
The possibility of further increasing the series is being worked out. We had a different configuration of production volumes — from 10 to 50 cars per year. I will propose to reach 20 cars a year by 2026. More — it will be very expensive and will provoke an imbalance with the MS-21 project.
The first new Tu-214 is planned to be delivered next year. In parallel, the UAC, of course, will continue to fulfill its obligations to special customers and government agencies, and commercial supplies will be added to them. In particular, the Tatarstan air carrier — "YUVT Aero plans to purchase four cars. Under the terms of the framework agreement with Aeroflot, it is planned to deliver about 40 aircraft by 2030. There is quite a high interest in this car from a number of airlines. Specific terms and delivery dates are currently being discussed.
At the same time, the Kazan Aircraft Factory launched the process of expanding production taking into account the planned volumes: updating the machine park, purchasing new equipment, increasing the capacity of the final assembly line, retrofitting the flight test station.
— Returning to the topic of international cooperation, what is happening now with the joint project of Russia and China to create a long-haul wide-body airliner CR929?— I think we will hold regular negotiations in the first quarter of next year, we will reach clear prospects and deadlines.
But our Chinese colleagues currently have applications for participation in this project from various manufacturers of components from third countries. We do not consider such a format for ourselves, taking into account the current situation and all the risks that we understand very well. Therefore, in order not to encounter them, we may decide for ourselves to switch from a partner within the framework of this project to the status of a supplier of aggregates, components.
— Almost any production involves metallurgy, which also had a hard time in the outgoing year. How did the growth of the ruble exchange rate and the closure of export markets affect the market this year?— Russian metallurgists have reoriented the supply of steel products to the domestic market and new export directions after restrictions on the import of Russian steel products from the EU — in my opinion, this transformation has been quite successful in the current conditions.
So, despite the panicked forecasts of foreign experts about a 24% decline in production, by the end of ten months of this year, we record a decrease in steel smelting by only 6.5%. At the same time, there is an increase in production in certain market segments — in particular, the production of steel pipes increased by 17.3% compared to the same period last year. The reorientation of supplies to the domestic market is facilitated by the gradual recovery of demand in the construction sector and car building, as well as the implementation of Gazprom's projects to lay new trunk pipelines in the direction of the Asia-Pacific region. The level of utilization of domestic capacities on average is now about 85%.
— In November, the Ministry of Industry and Trade noted that non-primary non-energy exports from Russia decreased by 16-18% against the background of sanctions, but no further decline was expected. How is the situation by the end of the year?— Due to the rapid adaptation of the state policy in the field of international cooperation and exports, it was possible to practically keep the bar for 2021 in terms of the volume of non-oil products in value terms.
The main task of 2022 was to dampen the decline in the NOE and form the basis for the transition to a recovery in export volumes in the medium term. Of course, one of the key roles in this process is played by a wide range of support tools within the framework of the national project "International Cooperation and Export", which is implemented by the Ministry of Industry and Trade of Russia jointly with JSC REC.
Thus, support mechanisms were quickly adjusted in terms of speeding up and simplifying the receipt of support by exporters for the implementation of export projects, as well as freeing companies from responsibility for not achieving the results of providing subsidies for projects previously planned for 2022-2023, and flexible budget management.
— Parallel imports have become one of the ways to ensure the supply of goods necessary for the industry. Let's talk about individual items in this list. Industry experts claim that the mechanism for cars, especially budget cars, has not worked because of legal obstacles. Is it so?— The main obstacle in the operation of the parallel import mechanism in relation to budget cars is logistics costs, which lead to a significant increase in the cost of cars.
The percentage of these costs is not so noticeable in the situation with premium brands, but it is noticeable just for budget models. The Russian automobile market is already saturated with alternative offers of domestic brands and brands from friendly countries, so the purchase of cars of their model range turns out to be more profitable for the end buyer than buying a "sanctioned" budget car imported by parallel import — in fact, it loses its meaning. There are no legal obstacles to the operation of the parallel import mechanism in relation to cars at the moment.
— Do you plan to make serious adjustments to the work of the mechanism next year?— Practice has shown that parallel imports work in a targeted manner — precisely for those brands that have left the Russian market or stopped production in
Of Russia. That is, this mechanism is not aimed at infringing the rights of bona fide companies that continue to fulfill contractual obligations.
At the same time, the most important indicator of the effectiveness of the mechanism of parallel import of products is the availability of all necessary goods for our citizens, as well as for industrial enterprises. All the products familiar to Russians are present in the assortment on store shelves, and domestic enterprises continue to work. Therefore, at the moment I believe that the mechanism itself does not require serious adjustments.
— Some large chains, such as Inditex, have already sold Russian assets. IKEA reported that it expects to complete the sale of factories in Russia in early 2023. Has a buyer been found?— Today, IKEA representatives continue negotiations with potential buyers of enterprises.
The owner and potential buyers agreed to ensure the integrity of the entire sale process, including the decision not to disclose the composition of possible buyers. At the same time, IKEA aims to come to an agreement in principle with the buyer or buyers by the end of this year. In addition, I would like to emphasize that, as in all such cases, it will be necessary to obtain the consent of the legal commission for monitoring the implementation of foreign investments in the Russian Federation and the decision of the Federal Antimonopoly Service (FAS).
— In conclusion, in your opinion, how long will it take to fully restore the Russian industry? — At the moment, there are two scenarios for the projected growth of industrial production — in both scenarios, the level of 2021 will be restored in 2024.
At the same time, the baseline scenario assumes an increase in industrial production by 2030 compared to 2021 of about 33%, and the conservative scenario is 25%.
