Page 51 - bne_July 2021_20210602

bne July 2021 Eastern Europe I 51
between machines, electronics and the internet. As most of these huge changes happened in the 1990s when Russia was flat on its economic back, it simply missed out on all of it.
“After decades of neglect and weak demand for its products, the Russian machine tool industry is in a deep crisis,” says Tomas Malmlöf of the Swedish Defence Research Agency (FOI) in a recent report. “The great demand for machine tools that nevertheless exists in the Russian industry, not least within the defence industry, is now mostly covered by imports, and Russia has become the fourth-largest importer of machine tools in the world.”
That’s a big problem. While tool-making contributes only a tiny share of GDP –
in Japan, a world leader, machine tool making accounts for 1.9% of GDP – the machine tool industry provides the principal industrial equipment base for all other manufacturing industries.
Everything is affected by the quality of the tools used to make things: heavy industry, the machinery industry, the car industry, power engineering business, shipbuilding, the aircraft industry and the entire defence sector. Being entirely reliant on imported tools is not a good place to be for a country like Russia
that aspires to become autonomous in industry and defence.
Russian machine tool industry was already falling behind in the 1980s,
Russia major import products April 2021 y/y
but following the collapse of the Soviet Union in 1991, it simply disappeared. In 1990, production of metal-cutting machine tools amounted to 74,000 pieces. In the next five years, output fell to 18,000 components, according to official statistics. In 2009, this figure had shrunk to 2,000. Since then, the situation has somewhat stabilised, and in 2016 production of metal-cutting machine tools reached almost 4,400
Moscow and St Petersburg was built by Siemens, as was nearly every new gas turbine in every new power station in the country.
In a more recent high-tech example, the head of Roscosmos Dmitry Rogozin complained that while Russia has plenty of rockets, and may build its own version of the International Space Station if the rows with the
“The crisis in the Russian machine tool industry was not a crisis for the Russian machine
tool market”
components – a 16-fold decline. But just because Russia wasn't making tools any more didn't mean it wasn't using tools.
“The crisis in the Russian machine
tool industry was not a crisis for the Russian machine tool market, as
such. What happened was that the domestic machine-building industries increasingly turned to foreign machine tool providers,” says Malmlöf.
Today Russia
During the noughties Russia’s economy boomed, doubling in size, funded by
a torrent of inbound petro-dollars.
The government invested heavily in rebuilding infrastructure but things like the new high-speed rail link between
US continue, it can’t launch any
new satellites, as they are missing a high-tech chip that is only produced in the West. Although there are no official sanctions on the chip, Western manufacturers are refusing to sell it to Russia. Roscosmos has tried sourcing analogues from markets like India and Brazil, but the quality is simply not good enough.
Even in the car industry Russia is
now home to five big car companies with extensive manufacturing plants, but despite energetic programmes to force foreign carmakers to increase
the share of locally made parts to at least 60%, the car plants in Russia are still heavily dependent on imports.
Part of the problem here is the foreign manufacturers are reluctant to share their technology for fear of creating a rival, but local part-makers are not good enough to offer a viable alternative.
The dearth of the domestic production of high-quality machine tools is both
a strategic and economic threat to the country. And yet little has been done to address the problem.
Mechatronics
Russia now has a lot of catching up to do, but developing the tech will be very hard.
One example is the “five axis grinders”: special grinders that can cut and
www.bne.eu