Latest overview of market potential for the engineering sector in Russia.
Sector briefing Engineering Opportunities in Russia Why Russia? Russian Government realises that development of the competitive engineering sector is a core factor for modernisation of the Russian industry. State programmes and projects are launched to support the sector. The sector is in high need for up-to-date manufacturing equipment. 70% of the existing capital assets are outdated. Annual market demand for new metal-machining equipment is over 50,000 units or $1 to $1.5 billion. However, the Russian machine tool manufacturers meet less than 1% of the Find general information on the Russian market internal need. Current domestic manufacture of conditions on UKTI?s website. The Doing new machine tools is lagging behind the Business Guide for Russia gives an overview of market demand and cannot ensure a Russia's economy, business culture, potential qualitative and quantitative break-through. opportunities and an introduction to other Production of new generation high efficiency relevant issues. and precision machine tools is not sufficed either. 'Annual market demand for new So, the market has to rely on the imported metal-machining equipment is equipment. This is true for other engineering over 50,000 units or $1 to $1.5 sub-sectors. For example, Russian billion. However, the Russian manufacturers of power engineering equipment machine tool manufacturers meet meet 30% of the internal demand. By 2015, less than 1% of the internal the Russian railway equipment market will be need.' in short of over 200,000 units of rolling stock. UK Trade & Investment Sector Briefing: Engineering Opportunities in Russia 1 1. Modernisation of the existing equipment Opportunities and facilities through their refurbishment or replacement Currently there is no overall RF Government's 2. Setting up a machine tool refurbishment policy to develop the entire manufacturing centre industry. The State provided targeted support 3. Setting up a machine tool production centre to specific sectors, for example, to Aerospace of excellence or Automotive. In addition, every industrial region of Russia designs and implements The Programme cost is £1.2 million for the programmes and projects to support period of 2009?2015 through internal funds development of the local engineering sector. and borrowings. The programme will be seeking foreign expertise, technologies and RF Government is keen to integrate industries localised production and/or refurbishment by encouraging industrial asset 'consolidation' into foreign companies large industrial corporations or holdings. Russian State Corporation Programmes, projects, corporations and ROSTECHNOLOGII (Russian Technologies holdings look for new state-of-the-art (www.rostechnologii.ru) manufacturing equipment and technologies in order to improve their production base. The purpose of the Corporation is to ensure The process opens up opportunities for UK development, production and exports of high suppliers of manufacturing equipment and tech products by Russian member companies. technologies. The Corporation's role includes: assistance in development and production of high-tech The following are some projects, programmes products, promotion into internal and external and major industrial corporations and holdings markets, winning of defence-related and other offering opportunities for UK suppliers: State orders, attraction of DFI, marketing, R&D and other functions. RF National Mega-Project 'THE INDUSTRIAL URALS - THE POLAR URALS' The Corporation includes 439 member until 2020 (www.cupp.ru) companies operating on the territory of RF and producing 23% of Russian industrial and The Mega-Project is designed to develop new defence products. The Corporation may take mineral and raw material base for Russian part in decision-making through participating in industry on the territory of Arctic and Pre- members? share capital or under a specific Arctic Urals, including the North Urals, Yamal- agreement or otherwise. Rostechnologii have Nenets and Khanty-Mansiysk Districts. offices in a series of foreign countries of Corporation ?Industrial Urals - The Polar Urals? Europe, South America, Africa and Asia. There was set up to manage the Mega-Project. is no office in the UK. Investment capacity is about £12 billion. Russian State Corporation ROSNANO Mining and extraction facilities, housing, (www.rusnano.com) infrastructure including roads, railroads, etc and 8 power stations will be built. Most The Corporation was set up in 2007 in order to investments will be spent on purchase of the implement RF Government's policy in the new technologies and equipment. sphere of nano-technologies including development of innovation infrastructure and implementation of projects designed to develop Sverdlovsk Regional Government's nano technologies and nano industry. Programme to Develop Machine-Tool Refurbishment and Manufacturing Centre The Corporation acts as a co-investor in nano- in Ekaterinburg (www.midural.ru) technology projects having a significant economic and social potential. Early-stage Implementation period: 2009?2015. funding of such projects will enable to minimise risks of their stakeholders - private investors. The Programme will be implemented in 3 Rosnano takes part in creation of nano- stages: technology infrastructure, for example, business incubators, centres for shared use of facilities, early investment foundations etc. spent to modernise the existing capacities, $15 Rosnano identifies investment priorities on the million for R&D of new products and $10 basis of long-term development forecasts and million for implementation of an automated engages the leading Russian and foreign control system. experts. GAZ GROUP PLC (www.gazgroup.ru) The Corporation has received £2.6 billion from RF Government for its activities. Gaz Group is the largest automotive holding of Russia. The Holding was set up in 2005 and Russian State Corporation currently includes Gaz Plc and 18 more ROSOBORONEXPORT (www.roe.ru; automotive companies of Russia. The major www.rosoboronexport.ru) shareholder of Gaz Plc is machine-building holding Russian Machines Plc. The Holding ROSOBORONEXPORT is the State Intermediary manufactures commercial vehicles, trucks, for exports and imports of military products. cars, buses and excavators. HQ is in Moscow. Their role includes procurement for Russian defence industry. Purchasing is carried out through Trade and Purchasing Company GAZ Ltd ROSOBORONEXPORT takes part in various arms exhibitions in Russia and abroad and may UNITED AIRCRAFT CORPORATION (UAC) be accessed therein. (www.uacrussia.ru) UAC was set up in 2006. It includes 18 Russian TRANSMASHHOLDING LTD companies operating in the aviation sector, (www.tmholding.ru) including Sukhoi, Irkut and Tupolev, a leasing centre and National Aviation Centre. Major UAC TransmashHolding is the largest Russian civil aerospace programmes include the 95- manufacturer of heavy-duty transport seat Superjet 100 and the single-aisle MS-21 machines and the world leader of railway regional jet. The UAC Development Strategy machinery in terms of units produced. The for the period up to 2025 includes investment Company is the major supplier of rolling stock in new technology and equipment. To be to Russian Railways Plc. The Company was set included in the list of UAC list of suppliers, the up in 2002. The Holding includes 13 member potential supplier should complete a companies and employs 57 thousand questionnaire". employees. Member companies make locomotives, engines, diesel generator sets, If you have any questions on the opportunities steel, conveyors, wagons, etc. above, please contact the UKTI team in Russia (see UKTI Contacts). Business opportunities Purchasing for the Holding is carried out aimed specifically at UK companies are added centrally through RusTransComplect Ltd. daily to UKTI?s website. These leads are sourced by our staff overseas in British POWER MACHINES LTD (www.power- Embassies, High Commissions and Consulates, m.ru) across all sectors and in over 100 markets. Power Machines is the leading Russian You can be alerted to business opportunities on manufacturer and supplier of best technical a regular basis by registering on the UKTI solutions for power engineering industry. website. Find out more on UKTI?s business The Holding was set up in 2000 and includes at opportunities service on the UKTI website least 6 member companies manufacturing steam, hydro and gas turbines, turbine blades, NOTE: See separate reports on Automotive, generators, low voltage control equipment, etc Rail, Aerospace, etc prepared by Russian and R&D Institute. Advanced Engineering Team In 2010, Power Machines Plc plan to double their investment programme to $150 million from $70 million in 2009. Of that amount, $100 million will be invested in construction of new facilities, $15 million to $20 million will be UK Trade & Investment Sector Briefing: Engineering Opportunities in Russia 3 Major Events and Activities Events: UKTI Activities: METALLOOBRABOTKA 2010, Moscow Outward Manufacturing Technologies ?ExpoCentre? (www.metobr-expo.ru) Mission to Samara, Russia Contact: Galina Movchan, UKTI Russia Contact: Galina Movchan, UKTI Russia Email: firstname.lastname@example.org Email: email@example.com Time: 24 to 28 May 2010 Time: October 2010 TECHNOLOGIES IN ENGINEERING 2010, INTERNATIONAL FORUM, Zhukovsky, Moscow Venue: Exhibition Centre Rossiya (www.forumtvm.ru) Time: 30 June - 4 July MASHEX-2010, Moscow ?Crocus Expo?, (www.mashex.ru) Time: 26-29 October 2010 MASHCOMP-2010, Moscow ?Crocus Expo? (www.ridjey.ru) Time: 26-29 October 2010 STANKOSTROYENIYE 2010 (STANKOEXPO-2010), Moscow 'Crocus-Expo' (www.exponet.ru) Time: 5-8 October 2010 Industrial Forum 'Russian Industrialist', St-Petersburg Exhibition Complex LENEXPO (www.exponet.ru) Time: 28 September to 01 October 2010 BLECH RUSSIA 2011, St-Petersburg, Exhibition Complex LENEXPO (www.blechrussia.com) Time: 15-17 March 2011 Find full details of all events in this country and sector on the UKTI website. New export events are added daily to the site and you can register to be alerted to them on a daily, weekly or monthly basis UKTI?s Tradeshow Access Programme (TAP) provides grant support for eligible Small & Medium Sized Enterprises (SME's) to attend trade shows overseas. Find out more about UKTI support for attendance at overseas events UK Trade & Investment Sector Briefing: Engineering Opportunities in Russia 4 UKTI Contacts UKTI Russia, Engineering Team: OLGA MAKARCHUK Team Leader British Consulate General, St-Petersburg: Tel: 007 (812) 320 3200/23 Email: firstname.lastname@example.org www.ukti.gov.uk GALINA MOVCHAN Senior Trade & Investment Adviser British Consulate General, Ekaterinburg Tel: 007 (343) 379 4931; 253 5622 Email: email@example.com www.ukti.gov.uk ALEXANDER PETROV Senior Trade and Investment Adviser British Consulate General, St-Petersburg Tel: 007 (812) 320 3228 Email: firstname.lastname@example.org www.ukti.gov.uk ANASTASIA BADINA Trade & Investment Adviser British Embassy, Moscow Tel: 007 (495) 956 7389 Email: email@example.com www.ukti.gov.uk SVETLANA BONDARKO Trade & Investment Adviser British Embassy, Moscow Tel: 007 (495) 956 7452 Email: firstname.lastname@example.org www.ukti.gov.uk UK Trade & Investment Sector Briefing: Engineering Opportunities in Russia 5 Next Steps - How UKTI Can Help British companies wishing to develop their business in the Russian market are advised to undertake as much market research and planning as possible in the UK. UKTI?s team in Russia with its wide local knowledge and experience can provide a range of services to British-based companies wishing to grow their business in global markets. This can include: ? Provision of market information ? Validated lists of agents/distributors ? Key market players or potential customers in the Chinese market ? Establishment of interest of such contacts in working with you ? Arranging appointments ? Organise seminars or other events for you to meet contacts and promote your company in the Chinese market This work is available via our Overseas Market Introduction Service (OMIS) - a chargeable service which assists British-based companies wishing to enter or expand their business in overseas markets. To find out more about commissioning this work, or accessing other UKTI services and specialist advice, please visit the UKTI website to find contact details for your local UKTI office. Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published 2010 by UK Trade & Investment. Crown Copyright © UK Trade & Investment Sector Briefing: Engineering Opportunities in Russia 6