NCFD expects industrial upswing

Today sanctions against Russia and countersanctions cause concern not only among European agricultural producers, but also industrial entrepreneurs. Norwegian businessmen who have businesses in Russia have found new business opportunities in Russia. The vice president of Statoil ASA for Foreign and Corporative Contacts says that his company continues cooperation with Russian partners, “developing necessary procedures and supporting a dialogue with the authorities to avoid breaking sanctions.” There is a positive attitude to Russia among Norwegian businessmen; however, experts are not sure that it will lead to implementation of certain projects. Moreover, a necessity in foreign industrial goods may soon become irrelevant for Russia.

Recently Russian Premier Dmitry Medvedev stated that he would personally head the commission for import substitution which will have subgroups for civic and defense industries. The North Caucasus is going to play a big role in the process of import substitution, where about 30 invest projects in the industrial sphere are going to be implemented. According to Medvedev, the list of complex investment projects which are financed by the Ministry for Industry and Trade Development includes five projects in the North Caucasus Federal District; the volume of their financing is more than 6 billion rubles. The Premier believes that the situation in the industrial sector of the District is better than in Russian average: “For five months, the volume of industrial production increased by 0.7% – it is not much, but still it is growth.”

The Minister for Industry and Trade, Denis Manturov, says that the NCFD priority projects are those in the sphere of metallurgy, the instrumental sector, mechanical engineering, radio electronics, the medical industry, and pharmaceuticals. This concerns development of the Tyrnyauz wolfram-molybdenum field in Kabardino-Balkaria. The project will provide production at three enterprises of the district, which are included in the united producing network. By the way, today 98% of metal-cutting instruments are imported by Russia.

 

According to the head of Kabardino-Balkaria, Yuri Kokov, the republic counts not only on the Tyrnyauz plant, but also on the diamond plant and Sevkavroentgen which is working in the sphere of medical industry. “Production of x-ray equipment has already been organized. One of the additional projects, which has been developed together with corresponding ministries, is organization of the remotely operated holder-table ‘Kosmos’,” Kokov said.

Another direction of the North Caucasus import substitution is production of equipment for the oil-and-gas complex. Terekalmaz, Kavkazkabel will deal with it, as Rosneft, Gazprom, and Rosseti are interested in buying this equipment.

Regarding the radio-electronic industry, construction of a plant for production of energy saving lightning equipment has been started in Ingushetia with support from Roselektronika. The project is supported by the federal budget. The general volume of the support is 1.272 billion rubles. Moreover, the plant will produce not only lighters, but also a technological paste which is being imported today.

As for pharmaceuticals, experts speak about Biokom in Stavropol and Exon scientific and the producing concern, which produced 40 new brand units of vital medicines by the end of the last year. Moreover, the acting head of North Ossetia, Tamerlan Aguzarov, says that “OOO Topaz-2 will substitute imported injection syringes, medical utensils and vials. Structures of the Bank for Development and Foreign Economic Affairs consider the projects as the most promising. The leading enterprise of the republic in the electronic industry is Baspik Vladikavkaz Technological Center, which exports products to many countries of the world. Within the framework of import substitution, the innovative enterprise is using a unique technology of fiber-optic elements.”

The key direction for development of the light industry in the NCFD regions is establishing a domestic raw-material base in wool and leather.

In Karachay-Cherkessia, the Kvest-A Company deals with import substitution as well. It is building a factory for processing of wool and production of yarn. As the same time, refined wool grease (lanolin) will be a demanded raw material for perfumery, pharmaceuticals and chemistry. Next year the factory will produce 2 thousand tons of yarn and 90 tons of lanolin.

Thanks to support from the federal budget (586 million rubles), the construction of a garment factory is being provided in Ingushetia. It will produce school uniforms, children’s clothes, and items for medical services.

The head of Ingushetia, Yunus-bek Yevkurov, says that “the garment factory will provide some necessities in the regions of the North Caucasus Federal District. Moreover, furniture factories are being constructed, including private ones. Today they already provide necessities in school items, desks, and other furniture. Ingushetia has launched a plant for production of polymeric tubes, which receives orders from Gazprom, Rosneft, Krasnodar Territory, the Rostov Region, and so on. In September, we will open a bus producing plant together with a Korean company.”

Nergiz Dagestan, a project of textile production, is going to be developed in 2017 together with Turkish partners. The republic's authorities are building an industrial park to prepare necessary infrastructure.

The head of Dagestan, Ramazan Abdulatipov, says: “The republic takes first place in construction materials, according to some information. At the same time, many construction materials are imported, rather than exported to the market, including the North Caucasus market. Today there is an opportunity to implement such projects. We have built a big plant with the help of the Bank for Development and Foreign Economic Affairs and Suleiman Kerimov; but sand for our glass producing plant is delivered from the far end of our country, even though we have big sand resources on the spot. We only need a plant for processing sand. We should complete the technological chain.”

Speaking about the processing industry, Abdulatipov notes that “there is no need in construction of plants in every region; we should build major plants of regional importance. The level of integration in the industrial sphere is very low in the region. In 1985 I defended my dissertation, and I remember that I had the following figures: the North Caucasus covered its internal necessities by 75% due to internal reserves. I think today it is only about 10-15%, as there is no integration inside the region. We should pay attention to this. In general, there are a lot of orders to us, especially in the military industrial complex. I think we will have upswing in industrial development, if there is capital substitution.”

Meanwhile, there is a question of training professionals in industry in the North Caucasus. The NCFD has already chosen some universities which will train people, according to the engineering program.