OREANDA-NEWS. July 09, 2015. Good afternoon ladies and gentlemen, friends and colleagues.

I’m glad to visit Yekaterinburg once again to attend our INNOPROM Industrial Trade Fair. This is the sixth trade fair of its kind and a key event in Russian industry. This year everything has been prepared properly. Visitors have an opportunity to see the latest products, take part in the business programme, hear from experts, workers and business leaders, and discuss organisational, technological and personnel trends shaping the future of the real economy.

This year the forum has acquired a partner for the first time – the People’s Republic of China. Russian industrial companies maintain broad cooperation with their Chinese colleagues in a diverse range of areas – machine building, metallurgy, and, of course, the energy industry, the oil-and-gas sector, and light industry. I’m confident that following the industrial exhibition, these contacts will be further developed, all the more so since our Chinese friends have sent a large delegation to the event.

It is obvious to many analysts today that leadership in today’s world is impossible without a solid industrial base, without modern factories and plants, and without advanced engineering, design and research centres. Importantly, the new industrialisation drive is closely linked with the need to enhance production efficiency. This issue has been chosen as the main item for discussion at our plenary meeting.

I don’t want to get ahead of the discussion. I’ll simply say that this is a multi-faceted issue that includes in-depth automation of production and the use of engineering software and elements of the industrial internet. Naturally, it provides for reducing manual labour to the minimum, and the introduction of modern quality systems, principles of efficient production and all kinds of other advanced methods.

Today experts are actively developing entirely new substances and materials, as well as machines and equipment that are shaping the image of the industry of the future. These new developments are making it possible to reduce the burden on the environment and drastically reduce energy consumption. Markets are also undergoing changes as well as relations between contractors, producers and consumers. All of them are involved in this process to a different extent, and leadership will belong to the country that can integrate all these elements in the most efficient way, thereby considerably consolidating its competitive positions.

I’d like to say a few words about Russia’s approach to the development of its industrial potential. It is common knowledge that this country is not having an easy time. This situation is the result of both objective difficulties and subjective trends, with a number of states regrettably creating artificial barriers and making it more difficult for our business to access financial markets, modern technology and equipment. We are particularly grateful to our partners that have not changed their plans, continue to invest in current and new projects and are ready to contribute not only money to them but also their knowledge, technology and expertise. This shows that there is still a unifying agenda that will shape the future.

For its part, Russia has not changed its goals. I’d like to make a few points. First, I’d like to draw your attention to the need for Russia to have a modern diversified economy that can compete on world industrial markets. We are actively promoting integration in the Eurasian Economic Union (EAEU) that was recently joined by Armenia and Kyrgyzstan and are working to form a free trade areas with our potential partners (recently we signed the first free trade area agreement with the Socialist Republic of Vietnam). We are ready to cooperate with all interested states on a mutually beneficial basis. Incidentally, the EAEU has already received over 40 proposals on cooperation from other states. 

Second. We aim to make the entire national industry regulation system more flexible and efficient, and strongly motivate the investors to modernise existing facilities, to build new plants, and to create new production lines. The regulatory framework has improved considerably since the last INNOPROM trade fair. I would like to say a few words about this. The law on industrial policy, which outlines state support elements, such as subsidies, tax incentives, technology parks and regulations, took effect on 1 July. I would also like to draw the attention of my colleagues in the Government to the fact that all the regulations that are required in order for us to be able to implement this law must be prepared in time. The Ministry of Industry and Trade has for the first time ever been accorded the authority to implement this law.

A special investment contract is one of the innovations introduced by this law. The investor commits to create and modernise the production process, whereas the state guarantees the stability of the business environment for up to 10 years. The Industrial Development Fund is another new institution. In late 2014, it received the first funds in the amount of 20 billion roubles from the federal budget. These funds will be used to provide industrial enterprises with soft loans for import substitution projects and to introduce the best production practices. Additionally, before 1 September, Rosstandart (Federal Agency for Technical Regulation and Metrology) will also prepare for public review 10 primary guides covering such production processes. They will outline the latest technological processes, technical means and methods in certain spheres. Their use will improve the efficiency of production and the environmental and economic performance of enterprises.

Import substitution is the third most important area for us today. As a matter of fact, it is best to refer to this not as import substitution in conventional sense. What we need to do is create our own products that are competitive not only in Russia, but also internationally. These programmes have been approved in 20 civilian industry areas, with over 2,000 projects. I once said that replacing all imported items is impossible, and we are not seeking to do so anyway. However, in all areas that are crucial to us, where we are critically dependent on imports, we will, of course, develop our own production capacity. These include the machine-tool industry, the heavy engineering industry, oil and gas equipment (especially so, because several companies from this industry are under sanctions), the chemical and the pharmaceutical industries, as well as the manufacture of medical equipment. We will do so in an intelligent manner: we will not simply shut down imports just because we manufacture certain things at home. Instead, we will take balanced decisions and remain open to cooperation with those partners who are interested in promoting their business in Russia.

Fourth. We need to introduce the latest formats of relations between customers and industrial producers, and to encourage horizontal ties. For example, major holding companies today are increasingly interacting with rapidly growing  small- and medium-sized companies. They can form such technical consortiums, which will include industrial investors, small- and medium-sized enterprises, as well as research and academic institutions.

Finally, we must start thinking now about future markets that may emerge on fundamentally new terms, say, 20 years from now. This is the goal of our national technology initiative. A special group has been created at the Presidium of the Council for Economic Modernisation and Innovative Development, which will review the first "roadmaps" under the technology initiative.

Also, of great importance is not just a policy of incentives, although, of course, it is important. It is also essential for any business to talk about their success stories. Last year, during INNOPROM, we presented the Industry national prize for the first time. We plan to hold this ceremony today again.