Rustam Ganiyev: ‘By switching to Russian analogues we don’t lose the quality’
The head of a Kazan industrial company about how Russian businesses are adapting after losing foreign suppliers
After the imposition of sanctions, it turned out that Russia has big problems with import substitution in such sectors as mechanical engineering, aviation engineering, pharmaceutics, electronics and machine tool engineering. Also, there is strong dependence on spare parts, industrial equipment, microchips, seeds and chemical components. Even the last printing pain factory in our country went bankrupt in 2020. Rustam Ganiyev, director general of Engineering, explains an in op-ed column for Realnoe Vremya how Russian businesses are surviving in this situation and finding a substitute of imported products.
Disrupted logistics, no imports
The process of adaption to the new harsh conditions still goes on. The situation remains unstable and unpredictable. The sanctions against Russia didn’t bypass Engineering too. The enterprise purchased electronics, pneumatics, electric drives, paints and varnishes to make its products. Now the logistic is disrupted and there aren’t supplies. But we found a possibility of replacing the foreign components that became unavailable for Russian and Chinese analogues.
In particular, due to the sanctions of the EU, paints and varnishes were banned from being imported from European countries. In Russia, European paints and pigments held about 50% of the market. But this doesn’t mean that something suitable cannot be picked up in the Russian market. Car paints can also work for production lines.
The situation for many equipment manufacturers isn’t critical
As for electronics, some companies have managed to create a feedstock cushion and therefore can stably provide partners with orders and save jobs at the moment.
We bought all electronics in advance too, two years beforehand. We started to buy it as soon as we understood that supplies from Europe to Russia can stop. Also, we received LAPP cables from abroad, but we also managed to replace them. An electrical control and instrumentation engineer studied all the models existing in the market and meeting our requirements, order a metre of each and did testing. This is how the optimal variant was chosen. But this cable is not only a necessity but also a convenience because fewer wires connecting are used summing cabinets with the main control board.
The situation for many equipment producers isn’t critical. There are almost all raw materials to make metals in Russia. Besides silicone, the country is independent. The price for metals is affordable for consumers.
The price for more demanded items in ferrous metallurgy in certified traders fell by more than 10% in the domestic market compared to the peaks this year, the decrease in cold-rolled sheet reached 26%. The price for traders’ iron reinforcements reduced by 11-13% compared to the peaks this March. Compared to the peak in June 2021, hot-rolled coil it did by 17%, cold-rolled sheet — by 26% compared to the same period.
We don’t see difficulties with obtaining feedstock for our production. In our factory, we use carbon steel and stainless steel. Neither are there logistic issues. We have been working with the metal supplier for many years now, and there is no sense in resigning the contract.
How to find new suppliers in Russia?
The Import Substitution Centre, by the way, helps to find new suppliers and clients for Tatarstan entrepreneurs. It is an online platform at a republican marketing agency with a list of 108,000 commodities that were earlier purchased abroad and alternatives for their substitution.
Also, a Russia database for import substitution of materials, components, spare parts and equipment is created under the aegis of the Ministry of Industry and Trade.
It is determined what else can be obtained from traditional suppliers, what will have to be purchased in circumvention, what analogues can be found in friendly countries and what Russian producers can master.
Once our team received 3 million rubles in the Fund for Entrepreneurs we spent to rent an area, purchased equipment and hired people. So Engineering completely independent company appeared in 2017.
To sum up, I would like to stress again that despite the complicated economic situation, Russian businesses have all possibilities for import substitution.
The author’s opinion does not necessarily coincide with the position of Realnoe Vremya’s editorial board.