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Returning to Civilian Production

Nikita Pichugin

In early July, Murmansk-based nuclear-powered icebreaker “Lenin” hosted an offsite meeting of the State Duma Commission on Legal Support of Development of Defense Industry Organizations. The event was co-sponsored by the Expert Council for Development of Shipbuilding Industry and Marine Equipment, headed by the USC’s President Alexey Rakhmanov, and Committee for Power and Oil-and-Gas Engineering and New Production Technologies of the Russian Engineering Union

Before the event, the guests of the Kola Peninsula paid tribute to those who died defending the Polar Regions during the Great Patriotic War and laid flowers to the monument to the Soviet soldier located on Zeleny Mys hill.

The offsite meeting focused on the discussion of approaches to carrying out the tasks set by the President of Russia in the sphere of diversification of the defense industry as one of the key prerequisites for the development of the country’s economy. The head of state set the task to increase the share of civilian products manufactured by defense enterprises to 30% by 2025 and 50% by 2030. One of the areas of diversification is the shipyards’ shift to the maintenance of civilian vessels and subsequent construction of small- and medium-size vessels.

Opening the meeting, Vladimir Gutenev, Chairman of the State Duma Commission, President of the League of Assistance to Defense Enterprises and First Vice-President of the Russian Engineering Union said: “Military-technical cooperation and arms export are unlikely to intensify amidst current sanctions. Therefore, diversification is becoming one of the most important tools for us.” The Duma member called the Polar capital to be the best place to host such discussions, due to its glorious military history and an important role it plays in the development of the Northern Sea Route. Vladimir Gutenev also disclosed that the lawmakers were drawing up a policy to restrict navigation of foreign-made vessels in the Russian economic zone along the Northern Sea Route. The move is expected to give a serious impetus to the development of domestic shipbuilding. He assured that the Murmansk Region would get a comprehensive support, including that of the State Duma, while tackling the issues under discussion.

Andrey Buzinov, USC’s Vice President for Logistics and Supply Management, in his statement presented the main approaches to the marine equipment supplier management and outlined the difficulties faced by the Corporation in this field. “The policy toward Navy’s transformation, large-scale projects in the Arctic, that are being discussed today, and overall revival of demand in civil shipbuilding – the combination of those factors has naturally led to a surge in shipbuilding. But as it turned out the industry was not prepared to address these issues,” – Buzinov noted.

According to the USC’s Vice President, key areas of unified supplier interaction policy should focus on improving procurement activities, introducing prequalification of bidders, developing supplier audit system, stimulating localization processes and establishing joint ventures with foreign partners. To demonstrate the efficiency of one of these measures, Andrey Buzinov referred to the results of introduction of centralized procurement approach in USC implemented in the form of joint procurement commissions. “Such joint activities save 5-6 billion rubles per year to be subsequently allocated either to the budget or to the improvement of our factories,” the USC’s Vice-President said.

Activities of joint procurement commission save 5-6 billion rubles per year

Approval of amendments to the Russian Government Resolution No. 719 on Marine Engineering Products marked a successful culmination of joint work of the Ministry of Industry and Trade and the main market players and is expected to stimulate localization processes. At the same time, we continue to observe certain legal conflicts caused by the component supply duties exceeding those for off-the-shelf equipment. Here and in a number of other areas we are in a need of better legal framework, stressed Buzinov.

The meeting was also addressed by Dmitry Filippov, Minister for Development of Industry and Entrepreneurship of the Murmansk Region, Mustafa Kashka, Director General of Rosatomflot, Andrei Nikipelov, Director General of Atomenergomash, Pavel Filippov, Acting Director General of the Krylov State Research Center, and Roman Parshin, Director General of Rosflotservice.

An extended meeting of the regional council of the Murmansk branch of the Russian Engineering Union (hereinafter referred to as Soyuzmash) occurred on the same day. Evgeny Zudin, the council’s Chairman, Director General of the 10th Shipyard, distinguished bearer of the Labor Red Banner Order, highlighted the progress made and prospects for its future activities. Currently, the organization has more than 670 members. Alexey Rakhmanov, USC’s President, supervises the work of the branch within Soyuzmash. Last autumn the branch celebrated its first ten-year anniversary.

“Soyuzmash provides both an opportunity to pool the efforts of all factories operating within the same region and a good platform for cooperation with the authorities to resolve our pressing problems,” said Evgeny Zudin. – “We are ready to take aboard everyone who wants to unite efforts to develop high-tech industry in the Kola Peninsula.” Acting Director of the State Authority and Public Organization Relations Department, USC Nikita Pichugin in his speech backed the Chairman of Soyuzmash’s Murmansk regional branch, having assured that the USC, for its part, was ready to assist the branch in implementing the projects of socio-economic development of the Murmansk Region.

Members of the State Duma accompanied by the United Shipbuilding Corporation’s officials also visited the 35 Shipyard, branch of the Shiprepairing Center “Zvyozdochka” to get an insight into the projects of upgrading of the factory’s ship repair capabilities. When visiting Atomflot’s facilities the meeting attendees inspected the nuclear-powered icebreaker “Vaigach” and got aboard the floating power unit “Akademik Lomonosov”, officially handed over to the customer by the shipbuilders of the Baltic Shipyard the day before the meeting took place.

Returning to Civilian Production
Returning to Civilian Production
Returning to Civilian Production
Returning to Civilian Production