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20.07.2017

How fast is the Russian industry recovering after the crisis?

Below is an excerpt from a TASS interview with Denis Manturov, Minister of Industry and Trade of the Russian Federation. 

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— As of the end of this year’s first half, manufacturing output grew at rates that were higher than expected. The automotive industry growth may reach 7% by the end of 2017. Are you going to improve the annual manufacturing output forecast?

— We have not changed the forecast so far, and the estimates are the same as at the beginning of the year: some 1.5 to 2% for the entire industry over the year. Why are we so conservative? The growth leaders, like the automotive industry that you just mentioned, are not alone in showing positive progress. But there also are industries that have not recovered yet. One example is metallurgy. The primary drivers in the metallurgical industry are exports and the domestic construction market. These markets have just begun a slow recovery. Since metallurgy is a major player and makes a significant contribution to the GDP, the metallurgy indicators have a strong impact on the industrial growth in general, and on the manufacturing sector in particular. We will keep to the original forecast until we are convinced that metallurgy has recovered.

— Steelworker’s Day, a big event for the metallurgical industry, falls on this week. What is the current status of this highly important Russian industry?

— We are among the five global leaders in ferrous metals production, and rank second in aluminium output. The metallurgical industry has been substantially upgraded over the past decade, as the companies have retrofitted their facilities. Besides, we have excellent prospects in downstream metal processing growth. First and foremost, we will focus on supporting the companies that produce added value. I’m talking about aluminium. Rusal will expand the processing facilities around its core metal production sites in the Krasnoyarsk Krai, Khakassia Republic, and Volgograd Oblast. The new facilities are designed to process primary aluminium and make products for domestic consumer industries.

— What other production sites in the industry are to be expanded?

— Let me give you an example. The Kamensk-Uralsky Processing Plant near Yekaterinburg makes auto components. It is one of the most advanced aluminium parts production facilities. The company converts primary aluminium into alloys and rolled stock. A governmental committee has made a decision to develop new end-to-end production facilities. These could make, for instance, cast aluminium wheel rims. Now we import most such wheels from China. As a result, we are now considering a licensing procedure for cast aluminium wheel import, since they often fail to meet the safety standards. Studies have shown that the wheel quality is insufficient to ensure safety, because the aluminium content is too low. Such wheels just burst at the most unsuitable moments, which is a road safety issue. We are interested in making aluminium wheels in Russia. There are significant advances in 3D printing, and the technology requires a wide range of powders. We will develop aluminium powder production facilities that will be adjacent to the leading large-scale aluminium smelters. There are many other examples of such processing facilities being built around a primary metal production site, and we are going to support this.

 — Many discussions at Innoprom concerned “smart manufacturing” and digital economy. The Presidential Council for Strategic Development and Priority Projects has recently reviewed a digital economy development programme. What is the programme’s significance for the industry?

— For me, emphasizing the need for modern components is precisely what the digital economy development programme does. That is why the Ministry of Industry and Trade has contributed a lot to the programme’s development. I briefed President Putin on the programme during the Modernization Council activities. As we understand it, a digital economy development model cannot be properly implemented without the manufacturing segment.

Interviewers: Gleb Bryansky and Yunia Polyakova, TASS
Photo credits: Valery Sharifulin, TASS
Source: Press service, Ministry of Industry and Trade

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