Russian Government and Russian private sector companies have recognised the need for updated manufacturing equipment and has made the updating of such equipment a priority.
Thursday, 10 Jan 2013
Half of Russia’s import during January-July 2012 consisted of machine-tools, tools and
Manufacturing Technologies (machine-tools
and tools) sector in Russia
The manufacturing sector in Russia currently presents many opportunities for UK business.
Both the Russian Government and Russian private sector companies have recognised the need
for updated manufacturing equipment and has made the updating of such equipment a
priority. Machine tools, purchasing of new and the refurbishment of, are being placed at the
top of this prioritisation.
The Russian Government has set clear strategic goals to transfer from a raw material-based
economy to one based on innovation, modernisation and technological development. The
Concept of the long-term Socio-Economical Development of the Russian Federation till 2020
sets the targets for engineering sector growth – the share of the industry in the economy
should be 23% by 2020, in comparison with 14.9% in 2007
Russia entered the WTO in 2012 and trade policy is predicted to undergo some positive
ξ Accepting the principle of international review and arbitration in the event of trade
ξ Driving innovation and diversification of Russia’s economy;
ξ Embracing global standards of governance and transparency;
ξ Strengthening the banking system, the tax system and the rule of law.
Russian heavy industry is in urgent need for up-to-date manufacturing equipment.
Approximately 70% of existing capital assets are outdated. Annual market demand for new
metal-machining equipment is over 50,000 units or £620m to £920m. However, domestic
machine tool manufacturers meet less than 1% of the internal need, so the market has to rely
on the imported equipment. For example, according to the data from the main Russian
statistical agency ROSSTAT (www.gsk.ru ), half of Russia’s import during January-July 2012
consisted of machine-tools, tools and transport equipment
The Russian Government is interested in strengthening the national manufacturing base and
has allocated significant budgets to support domestic manufacturers of machine tools and
tooling. The volume of governmental investment plans till 2016 is estimated at £533 million,
ξ £271m of the Federal Government budget investment
ξ £262m of other non-state budget investments
The Russian Federal and Regional Governments strongly promote localisation and guarantee
all kinds of support and benefits to localisation of international OEMs (Original Equipment
Manufacturers) in all sectors, specifically in: - machine-tool engineering; both in building and
- power engineering; both in power generation and power distribution (grid) equipment
-automotive industry; both in the industrial car assembly and components segment
The key industry players are:
A number of large enterprises, both state and privately owned, operate in the Russian heavy
manufacturing sector supplying various industries.
Some of the key players are: Russian State Corporation Rostehnologii (development,
production and exports of high tech products by Russian member companies), Russian State
Corporation Rusnano (implementor and co-investor of RF Government's policy in the sphere
of nano-technologies), Ryazan Machine-Tool Works (turning lathes), Power Machines (power
generation equipment, turbines), Saturn (measurement and control equipment), Pumori
(tools), Arsenal (compressor stations, water treatment units, extrusion equipment, cryogenic
equipment), Uralvagonzavod (railways cars, metallurgical, mechanical assembly, mechanical-
repair and tools producer), Urals Turbine Works (equipment for power and gas industry), etc.
For UK exporters the engineering market opportunities include:
ξ manufacturing technologies, machine-tools and tooling, spare parts, and components
for manufacturing and assembly across sectors – Aerospace, Automotive,
Shipbuilding, Transport, Power Engineering - exporting and/or servicing equipment
(sale or leasing),
ξ organising a joint production/venture, etc.,
ξ refurbishment of machine tools (low opportunity because of long distance and high
transportation costs incurred, but for large size and/or unique machine-tools such
opportunity still exists)
Please see separate reports for information on opportunities in the Aerospace and Automotive
Key Russian regions for the manufacturing technologies are Moscow, St Petersburg,
Ekaterinburg, Novosibirsk, Chelyabinsk, Bashkortostan (Ufa), Tatarstan (Kazan), Krasnodar,
Tver, Ryasan, Rostov-on-Don, Perm.
Machine-Tool Refurbishment Need Survey
In early 2012 UKTI Russia carried out a market survey to study machine-tool refurbishment
need and identify specific business opportunities over the next 2-6 year period. The Study has
shown the real demand for rebuilding and refurbishment. Although the Survey was carried out
in the Sverdlovsk Region – one region in the Urals area of Russia with a high concentration of
engineering industry enterprises, it’s fair to say that situation with machine-tool refurbishment
demand is similar in other industrial centres of Russia. Detailed information on the results of
the survey can be found at the Russia Business Opportunities page.
Russian Federation national megaprojects by Corporation of Development (former The
Ural Industrial – Ural Polar project)
The Ural Industrial – Ural Polar project was initially designed to establish stable economic
links between the resource – rich North (North Urals, Yamal-Nenets and Khanty-Mansiysk)
and industrial regions of the country, taking advantage of access to international
transportation line. At present the focus of the newly created Corporation of Development is
to implement a number of large-scale investment projects along with territorial development.
Mining and extraction facilities, housing, infrastructure including roads, railroads, etc and 8
power stations will be built. Most investments will be spent on construction, purchase of the
new technologies and equipment.
Other key projects:
ξ Greenfield construction of magnesium production plant started in the Sverdlovsk
Region, which is to produce 70 thousand tons of magnesium and 90 thousand tons of
silica per year. Investment: £267 million.
ξ Nizhny Novgorod-based specialised rolled and welded rings plant plans a £31m
project to launch production of metal powders to be used in various industries,
innovation and venture. The project is scheduled to be carried out within 1.5 years
ξ Development of Chelyabinsk ore and mining factory. The investment agreement on
expansion and re-equipment of production of highly-pure quartz concentrates, used in
microelectronics, was signed in August 2011. The project investment will total £43m.
ξ Greenfield machine building plant construction in Omsk region. Investment in the
project is expected to total £25.6m. Construction is scheduled to be completed in Q1
2013. The new plant will produce heavy cranes, special installation equipment, metal
ware, as well as various goods for car building using car pressing method.
ξ Etana pure polymers plant in Kabardino-Balkaria (investment of £314mln, to
manufacture polyethylene terephtalate). A number of international partners are
involved in the project; the plant to be equipped with foreign machinery, the project
open to international suppliers.