500 billion rubles for the machine tool industry for defense industry complex will be transferred through Rosteh

25 July 2013

Source: Newspaper Vedomosti

Stankoprom OJSC subordinated to Rosteh monopolizes the Russian machine tool industry. At a meeting with Prime Minister Dmitry Medvedev on the development of domestic machine tool industry, it was suggested to make Stankoprom “prime integrator of the industry, which will gain the status of sole supplier of machinery for the enterprises of the defense industry complex”. The newspaper Kommersant writes about this with reference to the participants of the meeting. According to one of them, the chairman of the government supported the idea in principle.

It is supposed to consolidate all machine tool assets of Rosteh on the base of Stankoprom, including the assets that are the part of the sub-holding RT-Stankoinstrument. Enterprises of the latter are likely to be transferred directly to Stankoprom, but their contribution to the charter capital is possible, the scheme is being worked out. After completion of the consolidation of the assets of Rosteh Stankoprom considers the possibility of a joint venture with foreign manufacturers and purchase of domestic enterprises, says the conversation partner of the publication. Ex-president of Stroytransgaz Sergey Makarov, who is also the CEO of RT-Stankoinstrument, and has been the head of Stankoprom since May.

According to the sources of Kommersant, Stankoprom expects to gain the major amount of funds under the Federal Target Program “Development of domestic machine tool industry for 2011-2016” for research and development and investments”, according to which the total amount of financing is 26.5 billion rubles, half of this – at the expense of the federal budget. As a result, the holding shall be the main producer of machine tools in Russia. According to the head of the Ministry of Industry and Trade Denis Manturov, their implementation will happen due to consolidated government orders, primarily under the Federal Program “Development of DIC until 2020”. Earlier the Deputy Prime Minister Dmitry Rogozin said that this program contemplates the allocation of up to 3 trillion rubles only for the modernization of equipment at the enterprises of defense industry complex, as well as for the development of new technologies.

According to Mr. Medvedev, now the situation in the industry is “not brilliant”: it brings only 0.3% of the GDP compared to 1% of the leaders – Germany, Japan and China. Almost 90% of the Russian market is occupied by foreign manufacturers, and most machines are synchronized with the “global network”. As a result, “we depend on decisions made in other countries”, and “at any time this spigot can be shut off” – the prime minister worried.

However, Russia does not intend to refuse to import, and this will be controlled by the same Stankoprom. It has to form a single order for foreign machinery and hold tenders, and then the equipment will be distributed according to the request of defense enterprises, says one of the interlocutors of Kommersant. According to him, Stankoprom expects supplies of large shipments, but not single pieces”, because “it only makes economic sense and can provide access to technologies”. Stankoprom will participate in civil tenders on a par with the other participants.

It is not evident how to separate defense orders from civil orders in such state holdings as United Shipbuilding Corporation, United Aircraft Corporation and Uralvagonzavod. According to one of the variants, the equipment of enterprises producing defense products, for example Uralvagonzavod, will get into the system of a single supplier. Machines, which are used only for civilian products, will not get into this nomenclature.

Relevant ministries can be instructed to prepare proposals on “the centralization of supplies” of machines for DIC, as well as to give their consent to work through Stankoprom until mid-October. It is supposed to form the order already after October 20, and to complete the inventory of domestic machine tool companies and to assess their capacities to fulfill this order by the end of the year.

Sources of Kommersant estimate the volume of orders of defense enterprises until 2020, including imports, at 500 billion rubles. According to Manturov, the portfolio of orders for Russian production can reach 150-200 billion rubles, which will ensure the industry’s growth by 30–35% per year. According to him, 80% of the total volume of machine tool orders will be accounted for by the defense enterprises in the next seven years.