OREANDA-NEWS. June 26, 2015. Nikita Ponomarev, Partner at Roland Berger, presented expert evaluation of import substitution opportunities in engineered product components referring to a model of a major Russian company.

The discussion was supported by spokesmen of national and regional governments as well as representatives of Russian and foreign businesses.

One of the study insights is that the Russian engineered product industry has been heavily dependent on imports. Over the past 8 years, import dependence has skyrocketed (2x to 8x) in some EP streams, especially in high-tech engineering like production of electrical products and electronic equipment. Thus, while the share of imports has risen to 83% in the cost price of radio/TV electronics, import dependence in production of electrical products increased 3?4 times to 20?24%.

On the one hand, the growing import dependence of the Russian engineered product sector could mean that the country has been integrating into the global supply chain, namely that Russia has capabilities to assemble more high-tech products made of imported components. However, another interpretation can be that our companies are no longer competitive forcing manufacturers to resort to foreign suppliers.

The Roland Berger study revealed the critical challenges that production of engineered product components faces in the context of import substitution: