RUSSIA, July 4 - The prime ministers of Russia and Kazakhstan delivered their speeches at the main strategic session of INNOPROM 2022 ‘Industrial Transition: The Experience of Leaders,’ and they toured the exhibition.

INNOPROM is an international industrial exhibition held annually in Yekaterinburg since 2010.

The theme of the 12th International Industrial Fair INNOPROM 2022 is Industrial Transition: from Challenges to New Opportunities. If in 2021 the main challenge was the COVID-19 epidemic and the search for new opportunities for industrial development in the realities of the coronavirus restrictions, in 2022, it is the search for new supply chains and ensuring technological sovereignty. This year’s business programme is focused on the opportunities opening up in new markets.

The partner country for the 2022 exhibition is the Republic of Kazakhstan. In total, more than 600 international companies will take part in INNOPROM, and participants from 25 countries will come with official delegations.

Excerpts from the transcript:

Mikhail Mishustin: Good afternoon, ladies and gentlemen. Mr Alikhan Smailov, colleagues, our country’s guests.

I would like to welcome everyone to Russia’s main industrial event, the 12^th International Industrial Trade Fair INNOPROM 2022.

This trade fair involves representatives of over 500 Russian and international companies, as well as business leaders from 30 countries. This is even more than last year.

We have many friends in the world. We appreciate and respect each of them. The fact that we have gathered at this event confirms once again that it is impossible to isolate Russia. We are inextricably linked with the world.

Kazakhstan is the current exhibition’s partner country. Our states maintain special relations of strategic partnership and alliance. I would like to welcome the delegation of the republic and Prime Minister Alikhan Smailov separately. I would like to thank them for sending such a large delegation to this INNOPROM event. This is yet another step towards deeper co-production arrangements and towards opening new joint production facilities. We have just finished touring the exhibition and the stands of Kazakhstan, Uzbekistan, Armenia and Belarus. Our countries find it important to enhance macroeconomic stability in Eurasia, to implement joint projects, to reduce their dependence on foreign imports and to expand cooperation in the manufacturing domestic goods. We have gained much successful experience in this field.

We have also seen innovation from enterprises in the Sverdlovsk Region, as well as the Russian Export Centre, the Rostec and Rosatom corporations, the Almaz-Antey Concern and many other companies, at the exhibition. The region is hosting the exhibition with hospitality today.

We were, on the whole, positively surprised to see so many promising projects in various spheres, including transport engineering, metallurgy, the energy sector and pharmaceutics. I would like to single out innovative solutions for developing digital production facilities. Not so long ago, we discussed the importance of this aspect at the Digital Industry of Industrial Russia conference in Nizhny Novgorod in great detail. We need this foundation for making Russian enterprises and their goods more competitive.

This year’s INNOPROM event is focused on industrial conversion. Hopefully, experts, businesspersons and representatives of state agencies will jointly draft proposals that will help Russian industry overcome the current challenges more effectively, during the upcoming discussions.

Sanction barriers and bans have drastically altered the current state of things. From now on, not a single country can guarantee imports of important foreign-made goods. So, we will have to create technological sovereignty as soon as possible.

We will have to create new principles and new approaches for continuing the industrialisation of the country and expediting the development of high-tech and science-intensive production facilities.

Ever since the first industrial revolution, all economic sectors have relied on a strong manufacturing industry to grow. However, this is no longer enough under these new circumstances. You need to have your own competencies, resources and technologies.

This is not an easy job, but Russia can deal with it.

Most importantly, we have achievements we can build on which largely allowed our industry to withstand the impact and avoid dramatic scenarios that our opponents predicted and anticipated. Yes, there’s a certain decline in certain sectors, but we have not reached a critical point in any of them. On the contrary, the growth rates in electronics, pharmaceuticals, and many other industries have increased.

The other day, we visited the Vladimir Region and toured several enterprises. They are doing quite well and enjoy high levels of localisation. They are using in-house technologies as well. The number of orders is on the rise.

Overall, Russian industry has shown its resilience and confirmed its ability to quickly adapt to new challenges. In five months, the volume of industrial production has grown by almost 3 percent, annualised.

The economy remains in the black. According to the Ministry of Economic Development, GDP grew by about 0.5 percent in January-May.

Swift supportive actions by the state were an important factor in stabilising the situation. Most importantly, the Government allocated 120 billion roubles to provide major enterprises with cheap borrowed resources.

A sum of 50 billion roubles was allocated to provide additional capital to the Industrial Development Fund. We also supported parts and component developers by launching a reverse engineering mechanism by allocating over 2 billion roubles this year towards for this.

Many effective measures have been implemented in the regulatory sphere. Thus, the temporarily issued exemptions for parallel imports allows our enterprises to quickly establish new supply chains for raw materials and parts and components that are not yet produced domestically.

We have also extended the incentive mechanism for investing in the industrial sector – SPIC 1.0 – and simplified the procedures under SPIC 2.0. Also, we postponed the deadlines for fulfilling obligations under state support, and moved the deadlines for paying the disposal fee to December for our automakers. A number of other measures have been taken as well.

At the same time, the sanctions prompted us to launch more active restructuring in key industries. We've been doing this for many years now. But now the tasks of developing our own production facilities and creating advanced competencies have become one of the state’s top priorities.

At the St Petersburg International Economic Forum, the President directed developers to expedite the development of critical and advanced technologies. This concerns all industrial sectors.

In the aircraft industry, we are doing our best to expedite the supply of Russian flagship airliners with fully domestic components and are starting to actively expand the product line. Each project has been assigned a deadline that will be strictly observed. All of them were included in the comprehensive programme for the development of the air transport industry to 2030 that was approved by the Government.

We rely on the same principles to overhaul the automotive industry. The main efforts focus on forming a local component base for domestic brands.

Russia does not see itself without a powerful ship fleet. We must have a strong shipbuilding industry. To do so, our shipyards will have to engage in deep localisation of production for all types of ships from nuclear-powered icebreakers, gas carriers, tankers and container ships to small river boats. The same goes for ship maintenance. I would like to note that we have a programme to develop our own diesel industry to equip the sea fleet and the river fleet with propulsion equipment. Once we have implemented this, we will meet our domestic needs for low- and high-speed engines.

The pandemic has highlighted how important it was to have a self-sustaining pharmaceutical industry. Now it is obvious to everyone that this is a strategic industry that can ensure the security of the country.

We have succeeded in producing vaccines and medicines. However, these successes are partly based on imported components, so we need to begin to create technological independence in biological and chemical substances, raw materials, and equipment immediately.

Low-tonnage chemistry is an essential segment here. The president has given all the necessary instructions to develop this sphere. Independent low-tonnage chemistry is needed not only for pharmaceuticals, but also for a wide range of industries from the food industry and household chemicals to mechanical engineering and building materials, including the development of radio electronics, which is the foundation for digitalising the economy, something that was discussed in detail in Nizhny Novgorod.

We have carefully approached reforms in the strategy for the development of the radio-electronic industry. I will highlight four main goals. The first is to increase production capacity in all segments. The second is to radically increase the presence in the domestic market from the current 12 percent to 70 percent by 2030. The next step is to increase domestic content in all economic sectors, step by step. And the fourth goal is to develop domestic automated design tools, an electronic component base, equipment, and materials.

The Government is now carrying out this work within the four federal projects. In total, there are over 500 initiatives. We will track all fixed points quarterly. It is important not to miss the deadlines.

At the same time, we are planning to coordinate the efforts of industry, the scientific community and the IT industry to address problems in complex software products, such as full life cycle systems, computer-aided design, and engineering analysis. Industrial competence centres are now being created to replace foreign digital products and solutions, as well as to develop Russian software.

More to be posted soon...