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.
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
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 comparasion with 14.9% in 2007
Russia entered the WTO in 2012 and trade policy is predicted to undergo some positive changes:
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Approximately 70% of existing capital assets are outdated.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, which
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
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
Latest export opportunities in the Advanced Engineering sector
Latest export opportunities in Russia
Getting into the market
Please refer to Guide to Doing Business in Russia, available from UKTI website, Russia
Please note, once you identify a local trading partner in order to maintain the business
relationship effectively you will be expected to:
ξ Provide sufficient and clear information (preferably in Russian) about your company, the
products and services offered; the price lists;
ξ Reference of successful operation in Russia or CIS (if available);
ξ Obtain your products/services conformity to the Russian State standards GOST;
ξ In case your local partner does not provide equipment servicing, be ready to set up a
Technical Service Centre or agree with an existent one Offer technical support/staff
training (preferably, if the cost is included in further equipment purchase contract) to
identify the investment need tailored to the type of products.
ξ Visit the market for face-to-face meetings (always with the interpreter) in order to have
successful business in Russia
ξ When working with state companies/governmental bodies be ready to participate in
tenders in Russian and respond within 2 weeks.
More about doing business in Russia
Market intelligence is critical when doing business overseas, and UKTI can provide bespoke
market research and support during overseas visits through our chargeable Overseas Market
Introduction Service (OMIS).
To commission research or for general advice about the market, get in touch with our specialists
in country - or contact your local international trade team.
ξ Svetlana Bystritskaya, Trade & Investment Adviser, British Consulate General in
Direct Tel: +7 343 253 5608 E-mail: Svetlana.Bystritskaya@fconet.fco.gov.uk
ξ Olga Makarchuk Team Leader, British Consulate General in St.Petersburg
Direct Tel: +7 812 320 3223 Email: email@example.com
Contact your local international trade team
UKTI runs a range of events for exporters, including seminars in the UK, trade missions to
overseas markets and support for attendance at overseas trade shows.
Latest events in the Advanced Engineering sector
When: 27-31 May 2013
When: 15-18 October 2013
More about OMIS and other UKTI services for exporters