According to the Brazilian system

Vasily Lebedev

Fifteen of the forty-three investment projects announced or launched from February to April 2013 in Russia belong to the machine-building complex. To increase investment activity in this sector has led import substitution and the elements of an active industrial policy.  

  • "Surgutneftegas" for $ 500 million built a new private airport in Yakutia to optimize the development of oil and gas field Talakansky
  • "Surgutneftegas" for $ 500 million built a new private airport in Yakutia to optimize the development of oil and gas field Talakansky

"Surgutneftegas" for $ 500 million built a new private airport in Yakutia to optimize the development of oil and gas field Talakansky

As rightly officials believe, it is the growth of investment must be based economic growth. The catch is that investment in Russia do not really grow up. They, of course, is higher than in the comparable period of the crisis in 2010, but still lower than in other periods, including seasonality. In the 14-m account the investment review, we counted 43 investment projects worth 14.9 billion dollars. 34 of them — with the possible contribution of the private $ 5.4 billion, which is much less than in obese periods (see Figure 1).

On the one hand, can not help feeling that in government circles and the expert community seems to have completely forgotten about the existence of a time-tested set of measures, always, in all countries and on all continents leads to an increase in industrial investment and the economy. This set up is called the "protectionist policy of the state." Industrial countries are in dire need of support by all possible means: cheap credit, government subsidies, undervalued currency below normal, active, direct government involvement in the economy through a sophisticated system of national standards and permits, preventing the penetration of foreign goods in the national market. And we should not confuse membership in the World Trade Organization. Listed measures used and enjoyed South Korea and China, despite the fact that they consist in the WTO since 1995 and 2001 respectively.

Debate between protectionists and free trade are long. But while no one argues that it is protectionism rather than free trade (from the English free trade — «free trade") contributes to the creation and development of the industry and individual sectors during their origin and formation. The policy of free trade also gives the results, but quite another stage — when the country’s industry or some of its industries develop so successfully that for continued growth they are needed new markets. That’s when the major developed countries are beginning to implement and enforce other countries free trade policy, which aims solely at expanding markets for its products. In general, the policy of free trade is ideal for industrialized countries and developing countries other recipe — protectionism. Over two decades of reforms Russia has lost many sectors and industries. Production tragically reduced (see "We do not produce» in "Expert» № 47 of 2012), and in order to remedy this situation, we have to forget about the free market. Russia now — one of the world’s major markets. The size of the Russian domestic market by purchasing power parity in 2011, according to the World Bank, amounted to 2.76 trillion dollars. We — the sixth largest in the world (see Figure 2). So why do we succumb to the entreaties of Western and Eastern partners to open our market, if we have already lost their machine tools, tractors, chemical fiber industry, civil shipbuilding, metallurgical engineering, and other industries that have a good market, including our territory?

Of course, do not have any illusions, and believe that their own competence and know-how will help us to build their own industry collapsed. Jingoistic patriotism to save. And it’s not the point. Here is a classic example: the British car industry. One after the other closed, bankrupt or were absorbed automotive corporations, and eventually in the United Kingdom does not have a single domestic producer. However, according to statistics, United Kingdom — one of the largest manufacturers and exporters of cars in Europe. The British car industry has not ceased to be a family. However, this was a direct consequence of protectionist measures taken by the British government. However, they also worked in Russia. Our vast market we bargained for construction in Russia of several major car assembly plants of almost all the world’s automakers with further commitments on the localization of components. As a result, thousands of new jobs, new competencies and technologies, increased investment, increased GDP. The growth in investment occurred just in engineering — in the industry with the highest value-added, quality of life, intelligence, and so on. Actually, this increase in investment activity in the engineering industry, we note in our study (see Figure 3). We have a significant number of new plants for the production of automotive components (see table).

Table:Investment projects on the territory of Russia (from 1 February to 30 April 2013)

Non-commodity investment is always more preferable for the state. And we celebrated the growth of investment activity in the manufacturing sector, in many cases due to import substitution and some elements of an active industrial policy. About the auto industry, we have already spoken. A second such notable element of industrial policy is the protection of the defense complex. Its manifestations can also be seen in our study.

However, nothing prevents us to cherish and a number of other industries, including those that we have lost. Let’s take, for example, once again turn our attention to engineering. This special attention to the industry — because engineering products is about half of Russia’s imports and provides ample opportunities for import substitution (see Figure 4).

In this connection, we give you another example. Over the last decade in Brazil virtually from scratch established its own shipbuilding industry. And it was done surprisingly simple. The state oil company Petrobras in the wake of rising oil prices of the 2000s began to actively develop the production of hydrocarbons in the Brazilian shelf. And the state is directly linked the output of Petrobras to the shelf with the development of the domestic shipbuilding industry. The government obliged the company to purchase drilling and production platforms, as well as tankers only in its own territory. With this leading Korean, Chinese and Japanese shipbuilding corporation, mostly in conjunction with the Brazilians, built more than a dozen large modern shipyards and factories for the production of accessories, including marine engines. As a result, Brazil among the five largest shipbuilding nations of the world (civil part), and now the industry employs over 60 million people (for comparison: in 1990 — only 2.5 million people).

The Brazilian example shows that even the most developed world governments are able to create the conditions for the emergence of major manufacturing industries in the territory. So you should look for the prerequisites for this and we have. Officials must move again to take decisive action if they want to run economic growth and dived into recession.

Transport

Transport and electricity constantly in the lead in our study, representing several such large capital projects that the rest of custom-made investments in other industries fade against the background of any one pipeline or power plant.
So this time in first place in terms of investment were transporters with two projects for 7.14 billion dollars (two projects related to the oil business).

The largest contribution to the treasury of the Common Country of investments — from the company "Transneft". In Siberia, the Arctic is a construction of the pipeline-purpe a length of about 500 km and transportation capacity — 45 million tons. The construction of the oil pipeline — the second phase of a large-scale project "Polar-Purpe-Samotlor", the purpose of which is to transport oil from the Yamal-Nenets Autonomous Area and northern Krasnoyarsk Territory, including Vankor on Russian oil refineries and for export. Cost of land-Arctic purpe 6.64 billion dollars (from the start of the project, the predictive value increased by 66%). In the "Transneft" explains growth investzatrat lengthening the route (from 490 to 520 km), "increasing the length of ground stations, construction of which is more expensive than laying pipes under the ground." In addition, the company produced a recalculation of costs in prices in 2014, and also took into account the assessment of compensation climatic conditions of the Arctic people engaged in construction. However, members of the "Fair Russia" in April this year has already appealed to the Court of Auditors to verify the validity of the request to increase the cost of operations. Perhaps the sum of the audit will be reviewed.

Another major transport investment project claims no one called. This project is unique in many ways: to accelerate the development of Talakansky oil and gas field located in the corner of a bear in the south-western Yakutia, the oil company "Surgutneftegaz" has built a full-fledged airport, and erected it at his own expense, including taking on the most capital-intensive area — Runway landing strip. Coast is more than three kilometers capable of taking class aircraft Tu-154, Boeing 737, Airbus A319 and A320. The project cost "Surgut" half a billion dollars, the work was completed in the shortest possible time — within one year. Airport complex has become the first in the country, built entirely at the expense of a private company. Moreover, this is the first post-Soviet Russia in the airport, built from the ground up. Special respect is the cause of non-core oil investment activity. In an interview to "Interfax" at the opening of the airport CEO "Surgut" Vladimir Bogdanov explained why his company built this place, "Of the eight and a half thousand employees," Surgut "in Eastern Siberia, only two and a half thousand — the locals. The remaining six thousand people — shift workers. They used to get from Surgut to Talakan two or three days, and it’s very exhausting people. They were first transported by plane to peace, and from helicopters on fisheries. On the day of committing eight or nine helicopter flights. With the opening of the airport has changed dramatically — delivery of the aircraft became more comfortable, faster. People do not get tired, starting to work with a completely different mood, and productivity increases. "

Electric Utilities

With a serious gap from the transport sector in the period (from 1 February to 30 April 2013) that electric power with four major projects 2.76 billion. Ongoing modernization of the industry, launched by the introduction of so-called contracts for supply of power (DP), (see "Man-made, but the non-market miracle ‘ in "Expert» № 50 in 2011). Recall PDM — a mechanism that encourages investment in the industry and enforces obligations to investors of generating capacities: generation companies are required to commission the power to set the characteristics of the due date. In this DPM suggest a guaranteed sale of all power supplied under the contracts for the past ten years, provided coverage of 70 to 95% of the capital and operating costs, as well as full compensation for the cost of grid connection to the network. To date, concluded about 30 thousand DPM. The total amount of money on them — in fact planned investment — about 3 trillion rubles. From 2011 to 2020 the volume of the planned commissioning of new generation within the Democratic Party should reach 25.2 GW thermal power plants. For comparison, now combined capacity of all types of power plants in the country are estimated at 210 GW.

In the current review of the investment were two major projects to be implemented within the framework of the PDM. In the Krasnoyarsk Territory third unit is being built Bereza power plant with capacity of 800 MW and cost about a billion euros. Investments by the German company E.On, which plans to launch the unit in 2015.

Also for 2015 is scheduled to launch their fourth power unit at Perm GRES, located in the town of Dobryanka 60 km from the city of Perm. Power generating capacity of 800 MW and a cost of $ 1 billion to build the beginning of the Russian energokorporatsiya "Inter RAO UES". Previously planned construction of a 400 MW unit, but the capacity was increased to 800 MW in connection with the transfer of the PDM with the Nizhnevartovsk GRES also controlled "Inter RAO" where previously also planned to build a block of the same capacity, to the Perm GRES. Urals is considered one of the most energy-deficient areas in Russia, so the transfer of investment here at DPM from Western Siberia is quite logical.

In Central Russia energy deficit of a different quality, and to solve them is not always necessary due to the construction of generating facilities — in some cases enough to upgrade power grid facilities. What is happening. Thus, in the district of Novgorod region Chudovsky Federal Grid Company started construction of an electrical substation "Streams" cost about $ 100 million. Its launch will ensure the reliability of power supply of industrial zones Chudovsky area, including the cement plant under construction Babinov. He is considered a priority investment project in the Novgorod region.

Engineering

Glad a lot of different projects in the engineering industry. The total amount declared and implemented programs in this segment of the economy during the period amounted to 1.43 billion dollars. This, of course, far less than the construction of pipelines, power plants or, say, iron and steel enterprises. But it is in the production of value-added engineering products to a much greater extent shaped by man, which means to bo? Lshuyu employment with a much better his skills in the total mass.

Noted in the last issue of the investment review (see "How to start a new industrialization" in "Expert» № 12 of 2013), a trend of greater modernization processes in the military-industrial complex (MIC) was confirmed by our observations at this time. Three state-owned companies from different fields of defense — Concern PVO "Almaz-Antey" holding "Schwabe" (part of the state corporation "Russian Technologies") and the company "ISS Academician MF Reshetnev" — are invested in the construction of new facilities due to increasing state defense order and provided support measures.

However, the most expensive project in the given sample in the military-industrial complex is more like a real estate development initiative. It is about the implementation of the concern PVO "Almaz-Antey" the concept of a North-Western Regional Centre (SZRTS) in St. Petersburg, worth about $ 500 million (this estimate, the plant — the military, so there is no exact data). The project is the transfer of the four Group companies located in the central part of St. Petersburg, the site of another — Obukhov — plant on the outskirts of the city to the Ring Road. Because of this concern is planning to release up to 60 hectares of land, mostly in the central part of the city, and ga
in from the sale of up to 10 billion rubles. However, so as not to detract from the merits of the initiatives concern, we note that SZRTS will be one of three new industrial complexes "Almaz-Antey" (the other two are located in Nizhny Novgorod and Kirov). All three will form the basis for the implementation of the production program of concern after 2015, when the execution of orders is expected to peak at the state armaments program.

Another investment project in the defense realized in Yekaterinburg Ural Optical and Mechanical Plant (UOMZ), which is part of the holding "Schwabe". There built a new assembly hall, focused mainly on the issue of special purpose. UOMZ — large enterprise, specializing in the design and manufacture of electro-optical systems and complexes for military purposes (in particular, produces electro-optical targeting systems for aircraft and combat helicopters) and civil engineering.

In Zheleznogorsk at JSC "Information Satellite Systems Academician MF Reshetnev" will soon begin construction of the assembly of large solar panels for navigation satellites used in the Russian national space system Global Positioning dual (GLONASS). The cost of the project — $ 20 million. Funding for the work carried out in the framework of the federal target program "Maintenance, development and use of the GLONASS system" for 2012-2020.

We should also mention the project in Ulyanovsk on-site plant "Aviastar-SP". There continues to build plant, which will produce the design of polymer composites: the panel of center, spars and integral part of the panel, detachable wing for two promising Russian Aviaproekt — MS-21 and Sukhoi Superjet New Generation (SSJ NG). In domestic aircraft are already in use composite materials: they are made of the elements of mechanization — flaps, rudders and so on. At each aircraft factory, including Ulyanovsk, has a composite shop. However, Russia has never made entirely of composite wing — his only some small elements (in the world is a similar experience, only two companies — Boeing and Airbus). The new plant will expand the possibilities of application of composites in the Russian aircraft industry. In the future, the glider MS-21 will consist of them by 30-40%.

If caused by the growth of the state defense order lifting the investment in the defense industry is just beginning, in other branches of engineering, he went on a plateau and is now accompanied by a background investments, though small in a single money supply, but quite significant in the aggregate. It is a robust process of import substitution in the automotive industry, carried out by foreign capital. In Russia there were two major clusters for the production of cars — Kaluga and St. Petersburg — each with a capacity of 500 thousand cars a year. In these clusters, there are all new investment projects for the production of various components for the automotive assembly plants.

In this review were three such projects. The St. Petersburg cluster Spanish Grupo Antolin for $ 40 million plan to manufacture glass, ceiling and door panels for factories Hyundai-Kia (St. Petersburg), Ford (Leningrad region), Renault (Moscow), Volkswagen (Kaluga). Thermal and sound insulation for vehicles Nissan, produced in St. Petersburg, will deliver it to start to build a joint venture of the French company Treves and the group of companies "Trans-engineering." A German Continental began building a factory worth 27 million dollars in Kaluga, where it will produce engine control units, water and fuel injection system. As can be seen from the examples, the localization of production of automotive components in the country is growing — after the expansion of the automotive market in Russia.

The process of import substitution became evident even in the same industry — in railway engineering. Unlike the auto industry railway engineering until recently relied on domestic technology and service. But now the foreign players in our market appeared "conductors". While this is modest attempts to adapt Western systems and innovation under Russian standards.

Here are recent examples. In Novocherkassk started the production of components for electric traction systems — induction motor drive and control systems. The company is located in the territory of the Novocherkassk Electric Locomotive Plant, owned by the Russian monopolist Transmashholding (TMH). French company Alstom (minority shareholder TMH), and I TransMashHolding invested in the project over $ 50 million.

German Knorr-Bremse in conjunction with the Federal freight company (formerly the Second Freight Company, "daughter" of Russian Railways) has started construction of a plant for the assembly of brake equipment for railway rolling stock in Tver. The cost of the project — $ 35 million.

In St. Petersburg, the Czech Skoda Transportation and the Kirov plant announced a joint venture for the production of modern subway cars, multi-section low-floor and low-floor trams in part, as well as double-decker trains.

We can assume that in the event of the implementation of the basic import substitution project — a high-speed railways in Russia (and they are already being discussed at the most serious level) — the industry’s railway industry can appear far more important projects and its attendant trail projects suppliers.

Another industry, import substitution in which the long-expected, — metallurgical engineering. Our steel industry is the sixth largest in the world in terms of production. Russia — one of the most competitive countries in the production of steel products, it means that one of the most coveted paying customers. Actually, the Italian and German suppliers of rolling mills, continuous casting machines, electric ovens and equipment for the direct reduction of iron has long been firmly established in our market, supplying its products. Now these players are ready to be here physically. Thus, the Italian Danieli — one of the world’s largest manufacturers of equipment for the steel industry, is planning the second half of 2013 to run in Dzerzhinsk plant for the production of metallurgical equipment costing more than $ 100 million. The decision to localize the Italians took the simple reason that in Russia have been set up so a lot of equipment that is engaged in service, it is more expedient to produce parts in place.

Chemical industry

In the import substitution and chemists have succeeded. Thus, in the Bashkir Salavat at a local petrochemical plant "Gazprom Salavat Petrochemical" (formerly "Salavat") plans to build a complex for the production of acrylic acid and acrylates $ 500 million. The complex will produce so-called ice-butyl acrylate and acrylic acid, which are produced based superabsorbents and dispersion, respectively, used in the production of hygiene products (e.g., diapers) as well as water-based acrylic paints and varnishes. According to the company, today dispersions and superabsorbent import of 40 and 100%, respectively. "Expert" is not just writing about the largest and most modern production of sanitary products and paints that do not have enough raw materials for production. Since 2016, when the plant is planned to start in Salavat, in this area will break.

On the way of import substitution is a group of Tatarstan and Taif, which launched at the "Nizhnekamskneftekhim" production of ABS plastics worth $ 143 million. Its capacity is 60,000 tons — as much of the Russian market for ABS plastics, where until prevail mainly suppliers from Korea. While the market is not great, but it is growing very rapidly. ABS plastics are used in the manufacture of refrigeration and home appliances, electronics, electrical, plumbing, toys, automotive (instrument panels, grille, etc.) in the packaging and furniture industries.

Production of building materials

Perhaps no indust
ry is more focused on local markets than the building materials industry. Building materials are low cost of production of one kilogram, which automatically means a higher proportion of transport costs for the transport of goods to any considerable distance to the end user. Therefore, production of building materials is usually local, work in your region, maximum — on nearby.

This applies to the cement industry. Quite conveniently located in relation to the major markets of Moscow and Nizhny Novgorod regions of the main production area of the plant "Mordovcement" can not produce more cement and reach to the distances to the regions. Therefore, the owners’ Mordovcement "decided to create a new site on the Volga River, from which could be cheaper to transport cement to every major city Volga river transport. The actual cost of a newly constructed Sengileysky cement plant in Ulyanovsk region will be more than $ 450 million, the launch of the production capacity of 1.2 million tons planned for this year.

Production of container

Another local business — the market of container. One of the players competing for leadership in the country, built in the Rostov region large glass plant worth 223 million dollars: five-year local firm "Actis" erected in Novocherkassk three stages of the enterprise for the production of bottles for alcoholic and non-alcoholic drinks, as well as jars for canning . Total power production — 1.1 billion pieces of glass per year, which could potentially provide the plant 8% of the Russian market of glass.

Figure 1 Monthly dynamics of the current private investment projects from the end of 2009

Figure 2 Russian domestic market — one of the largest in the world

Figure 3 Investment activity in the engineering industry began to grow, with the proportion of foreign-invested projects initiated began to decline

Figure 4 Imports of machinery and equipment increased to over 50 percent in the structure of imported goods in Russia. Here it is — scope for import substitution Be aware of trends, subscribe

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