Russian Prime Minister Vladimir Putin chaired a conference on the development of the shipbuilding industry
Russian Prime Minister Vladimir Putin visited the Admiralty Shipyard (Admiralteiskiye Verfi) in St Petersburg and chaired a conference on the development of the shipbuilding industry.
Vladimir Putin's introductory remarks at a conference on the development of the shipbuilding industry:
Good afternoon.
Today, our meeting is dedicated to the development of the national shipbuilding industry.
Together with the aviation sector, the shipbuilding industry must become a major growth point in the country's hi-tech sector, generating innovative technology and creating demand for cutting edge inventions. Nor must we forget the shipbuilding industry's role in accomplishing defensive objectives.
The North-Western Federal District accounts for 75% of the Russian shipbuilding industry's huge production potential. We are now accumulating sizeable financial and administrative resources in this sphere.
Our May 13 visit to Admiralteiskiye Verfi has convinced us that Russia, which can independently build warships of any class, also has unique potential for building ice-resistant ships and platforms for the Arctic and the Antarctic. Admiralteiskiye Verfi is probably the oldest Russian shipyard. Its general director has told us that the company was founded 304 years ago, and that Peter the Great was its first CEO. There are many encouraging things to review here. I particularly want to note the shipyard's high performance. The current contract and all other contracts are being fulfilled on schedule.
Over the past 10 years, Russian shipyards have built only 6% of the vessels needed by Russian ship-owners. The Government is aware of these statistics. Most contracts go to foreign shipbuilders. The choice of contractors depends on a number of factors. Most importantly, foreign shipyards work faster and produce better and less costly vessels.
The Russian shipbuilding industry lags behind in terms of labour productivity and production organisation. It is also slow to introduce innovations.
The national shipbuilding industry's labour costs exceed those of our foreign counterparts by 200-400%. I am not talking particularly about Admiralteiskiye Verfi. It takes 100-150% more time to build comparable ships in Russia. The cost of the final product increases several-fold as a result. It takes over a million man-hours to build a tanker displacing 40,000-50,000 metric tons in Russia, while the labour input is less than 400,000 man-hours in Japan or South Korea.
Consequently, Russian production facilities often stand idle, losing profits and skilled workers and missing chances to overhaul their equipment and R&D divisions.
We need a comprehensive strategy to achieve a breakthrough and to facilitate the industry's development. This is the way to make it more competitive and to ensure profound technological modernisation.
I want to say that it would be impossible to effectively implement national defence programmes or to develop the continental shelf or to catch more fish unless we achieve this goal.
In this regard, I want to draw your attention to several high-priority items.
First. We must continue to set up integrated production facilities inside the shipbuilding industry. As you know, it was decided to establish the United Shipbuilding Corporation (USBC) in March 2007. Next year, the Government must convert all of its state unitary enterprises into shareholding companies. The USBC's administration and those of its western, northern and Far Eastern shipbuilding and repair centres have not yet been completely established. I want to find out the reasons behind these delays. Please note that all USBC organisational issues must be settled by April 1, 2009 to conform to our previous agreement.
Second. We must choose promising spheres in the shipbuilding industry and start developing a new generation of sea-going ships along with other innovative technology. In this context, we must focus on vital defence-related projects and projects that can pay dividends in the foreseeable future. The creation of an entire range of sea-going vessels and equipment for developing hydrocarbon resources on the continental shelf and transporting them are a high priority. The list includes floating platforms, ice-breaking tankers, gas carriers and ice-breakers. We have seen one such vessel today. The world annually produces $80 billion to$100 billion worth of hydrocarbons on the continental shelf. Nor should we forget about the construction of floating power plants for Arctic territories and other remote regions, as well as a new-generation fishing vessels. A federal target programme, "The Development of Civilian Sea-Going Vessels", due to be implemented in 2009, will play a special role. Naturally, we must guarantee a timely and top-quality fulfilment of all national defence programmes and commitments in the sphere of military-technical cooperation.
We must actively pursue modern financial tools, primarily the leasing of Russian-made river-going and sea-going vessels. Clients must be able to acquire new ships on more favourable conditions. I hope that our funding programme is currently being implemented, and that this process will continue without interruption. One more thing. The industry must be integrated into the global shipbuilding network more actively because it will prove impossible to sustain its development otherwise. This implies cooperation with foreign partners in technological, R&D and production, as well as in our marketing efforts.
We must achieve the ambitious goal of expanding the national shipbuilding industry because Russia is a major sea power. This specific programme hinges on objective market surveys, stipulating the frugal and efficient allotment of state resources.
