The implementation of the import substitution strategy in the Russian production sector promises to become simpler and most importantly, faster. More than ten Russian regions have agreed to create the Interregional Association of Centers for Import Substitution and Cooperation of Central Russia. The new organization will help promptly restore logistics and production chains that were impacted by the sanctions. The agreement to create a new group was signed at an annual general meeting of the Russian Association of Clusters, Technology Parks and Special Economic Zones.
Each for all and all for each
The initiative to create the association belongs to the Ryazan Region government; Governor Nikolai Lyubimov was one of those who signed the agreement. The other signatories were Rafael Khusyainshin, Executive Director of the National Association of Investment and Development Agencies; Anton Podkuiko, Deputy General Director of the Agency of Technological Development, and Director of the Russian Association of Clusters, Technology Parks and Special Economic Zones Andrei Shpilenko.
As many as 12 Russian regions have supported the initiative, and their number will grow, according to participants in the signing ceremony.
The association’s key objectives will be collecting information about enterprises in the regions, their current production needs, and most importantly, building cooperation between participants of the regional markets.
“We are facing the need to deal with our common serious task to ensure the country’s economic independence, reduce the impact of sanctions and prevent Russian production facilities from halting of production due to the lack of foreign-made equipment, commodities and components,” Ryazan Region Governor Nikolai Lyubimov said.
It means that it is necessary to use every effort for a system-wide, consolidated launch of import substitution mechanisms.
“We need to work together in the regions and consolidate our efforts at the local level,” Nikolai Lyubimov said.
This will help to avoid manufacturing equipment downtime and ensure the supply of required components; this is particularly relevant today amidst the sanctions which have halted regular supply chains and discontinued shipment of goods, and this situation must be handled very promptly. To understand bottlenecks in production chains, the work is underway to develop a special register as it is easier to get a better idea of requirements for each specific production locally.
“Live communication between import substitution centers within the Association will allow us to organize work as promptly and efficiently as possible. Enterprises based in a certain region will be able to place orders at enterprises located in another one, which is the Association’s main task – namely, to promptly place such orders, and most importantly, to accumulate production volumes,” Nikolai Lyubimov emphasized.
Ready to provide support
According to Andrey Shpilenko, Director of the Russian Association of Clusters, Technology Parks and Special Economic Zones, it is good that such an initiative has been developing. Now it is important to actively utilize the Association’s resources as this will make the import substitution process as quick and efficient as possible, he noted.
So far, the core of the Association includes the regions of Russia’s Central and Volga federal districts. The signed agreement can boost interaction between other Russian regions and serve for scale-up efforts across the country, noted Rafael Khusyainshin, Executive Director of the National Association of Investment and Development Agencies.
Anton Podkuiko, Deputy General Director of the Agency of Technological Development, named import substitution as a key task of the industrial policy. At the same time, the new initiative implies not only organizational but also about financial support for participants in the import substitution efforts. For instance, a new grant program that has been launched at the Agency provides support for developers to substitute imported raw materials, materials, components, and spare parts. This is not solely about the industrial sector but also about transport and energy, as well as infrastructure projects, Podkuyko said. Plans include allocating grants worth up to RUR 100 mio for projects to develop prototypes, conduct tests, and launch production of essential components.
The infrastructure of regional technology parks, industrial parks and industrial clusters will provide an opportunity for boosting enterprise capacity as well.
And of course, investors will certainly show interest to new interregional links, increasing production volumes, and emerging supply chains, with the Association to take efforts to support their attention to domestic enterprises.
As Andrei Shpilenko noted, every Russian region is already taking certain measures aimed at import substitution and support of local enterprises – yet, projects often lack interest from investors due to small production volumes.
“Everyone needs major investment projects. I am very much hoping that we will expand cooperation within our Association and solve important tasks to boost production at enterprises, make information about them public, and provide assistance in attracting investments,” Andrei Shpilenko emphasized.
By Olga Blinova