The state puts machines in their places. Rosteh will consolidate the industry

27 May 2013

Source: Newspaper Kommersant, No. 88/П (5119)

The project of creation of the holding on the base of Russian machine tool enterprises acquires specific features. As the Kommersant has found out, Stankoprom controlled by Rosteh was headed by ex-director of the Stroytransgaz Sergey Makarov, and the appointment was approved by the Ministry of Industry. This means a compromise in the fight of concepts of machine tool industry unification and transfer of process under the control of Rosteh. The state may receive a share in the future holding, introducing its enterprises. However, whoever becomes the center of consolidation, the problems of this industry, which cannot compete with foreign products, remain.

Ex-president of Stroytransgaz, controlled by Gennady Timchenko, Sergey Makarov got a new appointment. He was put in charge of Stankoprom, the sources familiar with the situation told Kommersant. This company is owned by the United Industrial Corporation Oboronprom controlled by state corporation Rosteh (37.59% are directly kept by the Russian Federation). The appointment is fully supported by the Ministry of Industry and Trade, says one of the interlocutors of Kommersant. The ministry wants to “unite various machine tool assets to create a single state integrator for re-equipment of enterprises, by organizing production in Russia.”

The idea of ​​creating a state holding, which will deal with the development of machine tool assets, has been discussed for a long time. The government has been studying it since 2007, they decided to go back to the project in 2012 again, Denis Manturov, who has headed the Ministry of Industry and Trade in May last year, is interested in this project, said one of the interlocutors of Kommersant. Ministry of Industry and Trade, Stankin, Russian Technologies and Oboronprom have worked over at least three variants of consolidation. According to one of them, the key assets of the industry were supposed to be united on the basis of Rosteh, which has the holding RT-Stankoinstrument.

Now we are talking about a compromise scheme of consolidation of assets on the basis of Stankoprom. The final structure and mechanism of creating a new holding company are not defined yet, says the source of Kommersant familiar with the plans of the state and Rosteh. Even now, the assets structure within the state corporation is complicated, part of them belong to RT-Stankoinstrument, part – directly to Oboronprom. “The final variant will be developed with the participation of the new management,” says the interlocutor of Kommersant. Another source of Kommersant in the industry states that RT-Stankoinstrument now decides only industrial problems, mainly “serving the needs of Rosteh”, and the variant of introducing the company into Stankoprom is being discussed. They refused to comment in the state corporation.

Sergey Makarov has no experience in the machine tool industry, but he has experience in business restructuring. In 2010, he left the position of financial vice-president of Rosneft and headed Stroytransgaz. The company’s business has been rebuilt over two years: it became the largest contractor of Federal Grid Company, expanded its presence in oil and gas construction, through the creation of a joint venture with American company Argus Pipeline, and entered the construction market, consolidating stakes in large contractors MOST and ARKS. Mr. Makarov has left Stroytransgaz in August 2012 after the optimization of company’s business was finished, trolls the sources of Kommersant.

Deputy Head of the Ministry of Industry and Trade Gleb Nikitin told Kommersant that “the development of machine tool industry, linkage between the programs of modernization and the program of development of machine-tool industry within a single state holding will allow to develop the industry significantly.”

“The program of re-equipment of DIC is a unique opportunity for the revival of the machine tool industry,” said the official. The other interlocutors of the newspaper in the Ministry of Industry and Trade said that “the machine tool industry is characterized by fragmentation of players with weak investment opportunities, low profitability, lack of investment”. “Nevertheless, consolidation is possible if an obvious new leader appears,” said one of the sources of Kommersant.

Expansion of the holding is planned by joining of “live” enterprises and the creation of joint ventures with foreign companies, says one of the interlocutors of Kommersant, but he would not disclose specific information. The emphasis is planned to be made on the re-equipment program, to work actively on the debt financing market, he says, stressing that “this will be the task of the new management; in fact we are talking about creating a company from scratch.”

“The prospects for the consolidation of the machine tool industry are very controversial – the enterprises are isolated, many of them are in a difficult financial position or have lost technological potential,” believes Mikhail Pak from Aton. The analyst calls the situation for domestic enterprises on the Russian market of machine tools in general difficult – most of the major consumers are already used to working with foreign suppliers, it will be difficult for domestic producers to compete with them in quality, guarantee maintenance and in some cases – in price.

Kirill Melnikov, Egor Popov