Rostec orders machine tools from Tatarstan defence plants for 6bn

The Russian machine tool manufacturer STAN has opened a window to Tatarstan signing new contracts for 2020

With the imposition of sanctions that limited access of the Defence and Industry Complex to western high-tech equipment, the Russian defence industry focused on Russian machine tools. As Realnoe Vremya learnt, Kazan enterprises that are part of the United Aircraft Corporation (UAC) and Russian Helicopters will get another lot of 28 machining centres assembled by STAN PLC at a billion rubles. However, DMG Mori from Germany that localised machine tool assembly in Zavolzhiye SEZ in Ulyanovsk was the main supplier before its arrival in Tatarstan. It is noteworthy that in this competition Tatarstan enterprises felt greater affection for the global player of machine tool production: its portfolio of orders is still bigger than that of STAN, insiders note.

STAN signs contract at 6bn rubles

The Russian machine tool manufacturer STAN managed to enter the closed Tatarstan machine tool market, which is still designed for global manufacturers of machining centres with various industrial purposes.

This year STAN PLC signed government contracts to supply high-tech equipment to upgrade Tatarstan enterprises’ production capacities for a billion rubles, Realnoe Vremya was said in the press service of RT-Capital, which holds 33,4% of shares of STAN PLC. 28 machining centres purchased within production re-equipment programmes will be launched in regional enterprises according to contractual commitments by the end of the year, the company stressed and added that Tatarstan was in the top 5 regions in production upgrade. According to the company, in the last three years, Tatarstan has already purchased equipment from STAN for 5 billion rubles. So the total portfolio of orders has reached a significant amount of 6 billion rubles.

However, the company didn’t clarify what enterprises would have their production upgraded in 2020. The secrecy of this key information is explained by the fact that enterprises of the Defence and Industry Complex, which are under European sanctions, will get the machining centres. This is why RT-Capital tries not to spread any connection with contractual commitments in general. The company just provided indirect characteristics of purchased machine tools.

“The new equipment will be used in machining, instrumental shops of enterprises, cutting and bending shops, which will allow increasing the effectiveness of production and mastering new commercial goods,” RT-Capital specialists said.

As Realnoe Vremya learnt, the Gorbunov Kazan Aviation Factory, a branch of Tupolev PJSC, which keeps implementing the enterprise’s modernisation programme because of the construction of Tu-160M strategic bomber, became the main client of the modern machining centres.

“STAN Group of Companies is one of the main partners of the Gorbunov Aviation Plant, a branch of Tupolev PJSC, which is a part of the UAC managed by Rostec GC). Within the federal targeted programme, the company must supply a considerable amount of equipment and put it into operation till the end of 2020. This will allow Tupolev to use competence to create new samples of modern aviation equipment more effectively,” our newspaper was confirmed in the press service of Tupolev PSC.

With Ulyanovsk, Samara and Voronezh

It should be noted that this year STAN PLC has managed to sign government contracts for the country’s defence complex at 1,2bn rubles. According to SPARK-Interfax, this includes four government contracts from Ulyanovsk’s Aviastar-SP at 0,5bn rubles (including to deliver 5-axis high-speed machining centre with CNC machines in the project Technical Reequipment and Reconstruction of Machining Plants for Heavy Military Vehicle Il-76MD-90A). Another three government contracts come from the Kuznetsov Design Bureau to supply, assemble, start up, commission and launch profile grinding machines to build the body of Kuznetsov PJSC’s turbines in Samara. Another government contract on supply of 3-axis CNC machine tools within the project Reconstruction and Technical Re-equipment of Production for Il-96-400M at Voronezh Aircraft Production Association.

“Enterprises of the Republic of Tatarstan have been consecutively implementing the programme of technical re-equipment of plants, investing to purchase new high-tech equipment in the last several years,” noted Director General of RT-Capital PLC Kirill Fyodorov. “They have upgraded the fleet of machine tools at STAN PLC at over 5bn rubles in the last three years. The modernisation of production capacities of big Kazan enterprises will provide stable economic development, improve technological progress and the level of innovation of the region. According to him, the region’s biggest demand is for portal machining centres of different types, highly productive precision grinding machine tools and heavy presses.”

“The launch of new modern equipment made by STAN will help introduce new technology, augment productivity, reduce costs and, most importantly, improve the machining quality of goods,” Director General of STAN PLC Denis Polevschikov stressed.

DMG Mori as global opponent of STAN

However, DMG Mori from Germany that localised machine tool assembly in Zavolzhiye SEZ in Ulyanovsk was the main supplier before Russia’s STAN came to Tatarstan. Its multifunctional CNC machine tools are installed at Radiopribor factory and Elektopribor factory from Kazan, at Kazan Helicopters. In this competition with STAN, the Tatarstan enterprises felt greater affection for the global machine tool manufacturer: its portfolio is still bigger than that of STAN PLC, representatives of the DIC said earlier.

We should add that last year one of STAN founders Sergey Nedoroslev left the company’s capital. Projects on uniting uncoordinated machine tool manufacturers of Russia were linked with his name. He participated in the consolidation of seven production sites: Stankostroyenie (Bashkortostan), Stankotekh JSC (Moscow Oblast), Ryazan Stankozavod, Donpressmash (Rostov Oblast, Azov) and others.

“Nowadays RT-Capital PLC together with STAN PLC fulfils an integrated development programme of the company aimed to transform its sales system and organisational structure in accordance with advanced international experience as well as to improve the financial performance,” RT-Capital noted.

Sanctions limit access to western technology

The mechanical engineering complex needs new equipment, Tatarstan President Rustam Minnikhanov repeatedly claimed at meetings with the management of the UAC and producers of foreign equipment.

“The mechanical engineering complex is modernised, new enterprises open, and they must be modern. We talk about the digital industry a lot, but this requires active work,” Minnikhanov urged industrialists to modernise production. “The republic needs modern machine tools and is interested in attracting our foreign partners and high-tech companies to localise their plants in our republic.”

President of Stankoinstrument Russian association Georgy Samodurov told Realnoe Vremya that it had been forbidden for the DIC to import foreign equipment if there was a Russian analogue since January 2017. It is hard to bypass these restrictions: the Military and Industrial Commission’s panel has a group that thoroughly examines upcoming purchases and gives or doesn’t give an enterprise the green light.

“The restrictive measures don’t prohibit delivery of foreign equipment to Russia. Import has always been permitted. The case is that the pre-order for foreign equipment must be checked if it has an analogue. For this purpose, we gather clients, manufacturers at a round table, find blueprints and consider technical characteristics together. If there is a Russian analogue, we insist on purchasing it in the country, if not, we permit its import. The commission is very selective about every purchase,” he said. Almost 90% of the machine tools were imported several years ago. “In our early days, Russian analogues accounted for 6-7% of the incoming orders, while today they do 32-35%. The amount of imported machine tools was $1,3bn, or 10-11,000 units of machinery, and now it has fallen to $900m, or 8-9,000 units,” Samodurov explained.

Tatarstan Association of Enterprises and Industrialists: technological set-up is changing

According to BusinessStar agency, sales of metal processing machine tools in Russia will keep increasing at the average pace of 2,1-3,8% a year through 2022. The instability of the ruble rate and maintaining restrictions on importing high-tech machine tools from Russia are the negative factors that are a barrier to significant growth of sales. The Tatarstan Association of Enterprises and Industrialists noted that only those enterprises that are a hundred per cent property of the state and built in the verticals of the state holdings UAC, Russian Helicopters, KRET buy new machine tools. As a rule, government programmes or bank credits with state guarantees are the source of financing.

“Enterprises constantly upgrade their assets, there haven’t been any bulk purchases, and there won’t be any,” says the representative of the association. “They constantly upgrade their funds, build new buildings, purchase stamping, metal machining equipment. This process takes 3-4 years. There is nothing sensational.”

According to him, the technological set-up is changing, and new equipment is purchased for this purpose. “Nobody lives without modernisation,” the newspaper’s interlocutor concluded.

By Luiza Ignatyeva