‘We are just waiting for the signature of the Ministry of Finance’: mechanical engineers expect subsidies to return
Tatarstan’s Mechanical Engineering Cluster came close to plummeting after cancellation of the Ministry of Industry and Trade’s subsidisation programme though it received only 75 million rubles
As Realnoe Vremya found out, Tatarstan’s Mechanical Engineering Cluster uniting 165 members lost significant budget support together with other players. Due to the pandemic, Russia’s Ministry of Industry and Trade suspended a subsidisation programme of up to 50% of the costs at all stages of the production life cycle for the first time in five years, but now work is done to resume it, said head of Tatarstan Investment Development Agency and Chairwoman of the cluster’s Supervisory Board Taliya Minullina on 18 February. However, the members of the cluster received 75 million rubles of subsidies, including zero-rate loans to pay salaries and are waiting for the programme to be re-launched this year.
Russia’s Ministry of Industry and Trade to resume the programme in March
Tatarstan Investment Development Agency hosted the annual general meeting of members of Tatarstan’s Mechanical Engineering Cluster and a meeting of its Supervisory Board. Head of Tatarstan Investment Development Agency and Chairwoman of the cluster’s Supervisory Board Taliya Minullina chaired the meeting.
First of all, they evaluated consequences of the pandemic. Since last spring, the Russian Ministry of Industry and Trade has suspended the programme according to the decree No. 41, Minullina said. The case is the document On Adoption of Rules of Subsidies to Members of Industrial Clusters from the Federal Budget to Compensate for Part of Costs on Joint Projects on Industrial Production of the Cluster for Import Substitution. The money of subsidies can be spent to pay for equipment rent, interest in loans taken out to purchase equipment, software, major construction and so on, the sum is 70% of the amount of such expenses.
The Ministry of Industry and Trade of Russia helped clusters for long encouraging the cooperation between manufacturers and construction contractors. Those who complied with requirements could receive serious financial aid. 24 clusters that went through a selection process were to receive 5,9 billion rubles of federal subsidies until 2021. The Tatarstan Mechanical Engineering Cluster was one of them. But it didn’t receive the money.
However, the possibility of resuming the programme is discussed now, Ms Minullina made the members happy. “We are just waiting for the last signature of the Russian Ministry of Finance,” added the cluster’s Board member Oleg Korobchenko (Korib TH). According to the cluster’s Board Chairman Sergey Mayorov, it will resume in March.
Escape to PSEDA
However, 2020 wasn’t a destructive year for all cluster members. “The automotive engineering industry grew, especially some of its members,” the head of TIDA said. “The production of construction materials showed positive dynamics. But equipment manufacturing for the oil and gas complex plummeted. However, cluster members started to join Priority Social and Economic Development Areas. Kamkhimmash obtained a ticket to the tax haven. Module, Promtekhkomplekt companies are planning to get the enviable status as PSEDA residents.
The production of generators was launched in Mendeleyevsk, though the solemn opening ceremony is scheduled for 26 February. The Yelabuga accumulator plant of KORIB runs quite well, moreover, 45 accumulator assembly points across Tatarstan are going to open in the future. A licence for hazardous waste was obtained last year.
Zias Machinery Volga Region LLC plans to launch the second stage in the second quarter. KORA Universal, a cluster member, showed 50% growth in 2020. Beton-Kama will expand its production in the second quarter in Nizhnekamsk.
Kaluga support is better than Tatar
Head of the cluster’s Committee for Environmental Projects and Director General of Bonus-Kama company from Kaluga Mikhail Makarov complained about difficulties in cooperation with large enterprises. He opened a tyre recycling plant in Mendeleyevsk but delivers feedstock from Ulyanovsk:
“If we have positive emotions of the business with KVART, but KAMA TYRES scheduled a product test for late May. We were told to produce it, and they would try to test the product in late May and say something at the end of the year.”
But he was very surprised at the fact that the support measures Kaluga Oblast has Tatarstan doesn’t: “We receive 50% of the subsidies for purchased industrial equipment or 70% of compensation for rent. I successfully take advantage of it, buy machine tools and get 50% compensation, but no more than 5 million rubles. But Tatarstan doesn’t have such a measure, while we would like to!”
Head of the cluster’s Committee for Relations Development in Construction and Director of Zias Machinery Volga Region Nikolay Bulgakov noted that the price rally for steel severely affected them: “A lot of projects became unprofitable. International projects were frozen too.”
International Cluster Forum is ahead
Chairman of the Board of the cluster Sergey Mayorov reported on the performance. According to him, the number of members increased by five to 165 members. Cluster members are present in 18 Russian regions and two countries — German and Turkey. There were carried out 9 business missions in Bashkortostan, Leningrad Oblast, Kirov and Saratov Oblasts, they participated in 27 exhibitions and forums. But the Supplier Day was cancelled due to COVID-19 restrictions. So the cluster signed 374 agreements with 67 regions and 23 countries of the world.
“We are waiting for the support to resume,” Mayorov claimed. “Joint support for next cooperation projects is envisaged, up to 300 million rubles of subsidies, but no more than 30% of the value. It isn’t yet late to submit applications — the programme hasn’t so far been announced.”
In conclusion, Chairwoman of Tatarstan’s Mechanical Engineering Cluster Taliya Minullina said about the preparation for a forum.
“We got the right to host the international cluster forum in Tatarstan. It was due to be last year but will take place this autumn,” she claimed.
In this respect, the head of TIDA urged all 13 clusters of the region to take the event seriously. “This applies to all clusters that were created in the republic. We have Innokam, a Research & Development, mechanical engineering, IT cluster, and some others. <…> We will develop and present them at the conference,” Minullina noted.