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Far why customers opt for the construction of ships Kaliningrad shipyard - EastRussia | Interview

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Not a state-supported single

Why Far Eastern customers choose Kaliningrad shipyards for shipbuilding

In 2016, the Rybolovets collective farm named after Lenin (Petropavlovsk-Kamchatsky) signed a contract with the Baltic Shipyard Yantar (Kaliningrad) for the construction of three trawler-seiners, one of which was recently launched. In 2017, the Kaliningrad shipbuilder signed another contract - with PJSC "Preobrazhenskaya trawl fleet base" (Vladivostok) for the construction of a large freezing fishing trawler. Cooperation of this kind, which the Russian shipbuilding industry has not seen for twenty years, was made possible largely thanks to the introduction of state support measures for shipbuilding - first of all, "quotas under the keel." At the same time, another factor that is of no less significance for the revival of Russian shipbuilding is the work of management of shipbuilding enterprises themselves to reduce costs. The general director of JSC "Baltic Shipyard" Yantar "Eduard Efimov in an interview with EastRussia told why the customers in the Far East preferred Kaliningrad shipyards to South Korean, what is the competitiveness of domestic shipyards in the world market and how can it be increased.

Not a state-supported single
Photo: the press-service of JSC "Baltic Shipyard" Yantar "
- There is an opinion that it is more profitable for enterprises of the Far East to build and repair ships in South Korea and China. Nevertheless, OOO Rybolovetsky Kolkhoz named after Lenin in Petropavlovsk-Kamchatsky and PJSC Preobrazhenskaya Trawl Fleet Base in Vladivostok preferred to build vessels in Kaliningrad at the Yantar shipyard. What is the reason for this choice?

- Indeed, this opinion exists, and it can not be called wrong. On the South Korean and Chinese lines, where our partners are repairing their ships, they could also order a new fleet. But they began to work with us, which is due to a number of reasons. The first of them is the measures taken by our state in order that fishing companies order ships on Russian routes, first of all, they are about "keel quotas".

EastRussia help. "Quotas under the keel" - measures of state support to stimulate the renewal of the production fleet were included in the number of amendments to the Law "On Fisheries and the Conservation of Aquatic Biological Resources" adopted in June 2017. They provide for certain preferences in the allocation of quotas for the harvest of marine bioresources for those who own the new fishing vessels built on the territory of Russia. In particular, the increase in the period for assigning quotas to users from 10 to 15 years, as well as the allocation of an order of 20% of quotas on the obligation of fishermen to build new fishing vessels at Russian shipyards, and to create fish processing facilities.

At the same time, we signed a contract with the Lenin Fishermen Kolkhoz in January 2016, when the issue of allocating "keel quotas" was still vividly discussed, but was not finally resolved. Having expressed the desire to build ships at Russian shipyards, regardless of whether quotas are allocated or not, our future customer in the search for a contractor visited several enterprises in St. Petersburg, Severodvinsk, Kaliningrad and the Republic of Tatarstan.

I think the choice of the fishing collective farm was largely due to the approach we proposed, our concept of implementing this contract. It consisted in not only building ships, but also performing all other works within the project, starting with participation in the development of technical documentation, choosing a design organization, etc.

Also, the choice of the customer was influenced by the competitive advantages of the Yantar shipyard in front of other shipbuilding plants in Russia related to its geographical location. Our company is located in the ice-free part of the Baltic Sea, therefore we have the opportunity to conduct trials of ships all year round, which, other things being equal, shortens the terms of their construction. The second customer, the Transfiguration Base of the trawling fleet, in addition to the above reasons, decided to work with us, based on the positive experience of cooperation with the Fisherman's collective farm.

- To what extent do you think domestic shipbuilders are competitive in the world and domestic markets today?

- On the one hand, the competitiveness of our shipyards is constantly increasing. The level of technical capabilities of the factories is growing, primarily due to their modernization, which is carried out, among other things, at the expense of federal targeted programs (FTP). There is a new experience in building ships, not only for the military, but also for civilian customers.

On the other hand, we are still losing global competition to foreign shipyards. This is largely due to more significant costs for production, which in turn due to the harsh climate, as well as a large proportion of military orders. Thus, in the case of manufacturing products for military purposes, it becomes necessary to maintain a whole complex of units that install and test special ship systems, which are usually not on a civilian ship. Shipyards located in Croatia, Spain and other southern countries, usually do not build special vessels, and do not spend money on heating the shops, which allows them to produce ships with much lower costs. In addition, in some countries - the leaders of world shipbuilding, for example, in Spain, the construction of ships even for a civil customer is partially subsidized by the state.

In other words, there are objective reasons that influence pricing in the production of ships. Today our plant is approaching an understanding of how to properly form a price for a civil customer so that it can be competitive both in the world and in the domestic markets. First of all, it is necessary to reduce costs - to seek and find different ways for this. The following year, before the Yantar Shipyard, we set the task: to implement a set of measures to reduce overhead costs, which ultimately should reduce the final price of the product for both the military and civilian customers.

- Is it possible to say that state support is fundamental for increasing the competitiveness of Russian shipbuilders?



- Yes and no. Undoubtedly, state support is necessary, especially at the start of any business. For example, the Ministry of Industry and Trade of the Russian Federation, through measures of support and certain privileges for manufacturers, has literally restarted the domestic auto industry - we see that now largely thanks to this, the production of high-quality cars has begun at affordable prices.

The same state does and with respect to the construction of the fishing fleet: by launching the mechanism for the allocation of "quotas under the keel," it prompted fishing companies to order ships on Russian ships.

But these key measures of state support would be ineffective without the work of enterprises themselves to reduce overheads and costs in general. Proof of this - again, our contract concluded with the fishing collective farm before the adoption of the RF Government's resolution on the introduction of "quotas under the keel." But, in turn, without the allocation of these quotas, our second customer from the Far East - PJSC "Preobrazhenskaya base trawling fleet", most likely, would not have come to us. Therefore, in my opinion, the support of the state and the desire of management of shipbuilding enterprises to optimize costs are now equally important for the development of the industry.

- What forms of state support, except for "quotas under the keel," currently enjoys the Yantar PSZ, are they enough? What else do you think the state should do to revive and successfully develop the Russian shipbuilding industry?

- Since 2011, the mechanism for implementing the Federal Target Program for the Modernization of Shipbuilding Enterprises has been launched. Now we are completing the first stage of the technical re-equipment and reconstruction of our enterprise, which is being implemented, in particular, at the expense of the FTP. Thanks to this program, we were able to modernize the machine-building and pipe-bending production of the plant, began the reconstruction of the outbuildings embankments. Soon we will pass to the second stage of modernization, within the framework of which the construction of a new workshop for hull production is planned - an important step towards the creation of a compact shipyard.

Undoubtedly, without FTP, it would be much more difficult for our enterprise to enter a new technological level. But with reference to our region, where the economy is concentrated on a relatively small territory and operates on the principle "if there is work for some, it appears in others", the mechanism of state support would be expediently supplemented with development programs of the coastal shipbuilding complex that would take into account the interests of fishermen and shipbuilders. Using these measures, we could receive from the local budget new orders from local fishing companies. In my opinion, just now there has come a favorable period for the transition to the regional level of shipbuilding support, within the framework of the relevant programs of the government of the Kaliningrad region.

- To what extent are the shipbuilding capacities of the Kaliningrad Region currently loaded? Will they allow quantitatively and qualitatively to start accepting mass orders from the enterprises of the Far East in case of such necessity?

- If we talk about the shipbuilding of our region, then all of it is mainly concentrated on the areas of the Yantar PSZ. Today, according to our technological capabilities and personnel, the load is of the order of 80-90%, and this level will continue for at least three years. If we talk about ship repair enterprises, then by their technological capabilities they are now loaded almost 100%.

Of course, with such a load, it's not necessary to talk about the possibility of multiplying the output multiple times overnight. The implementation of a large-scale shipbuilding program, including for customers of the Far East, is possible only if new capacities are built and modernization is carried out.

While for us it is irrelevant, but if the number of orders will grow steadily, we are ready to consider the possibility of investing in expanding production and building new shipyards.

- Tell us about the results of the 2017 year and the plans for the development of the Yantar PSZ in the medium term.

- I would say 2017 is a turning point for the plant. Despite the fact that the volume of work we have fallen somewhat due to the "failure" to load at the beginning of the year, we have created a good reserve for the future development of our enterprise. In 2017, we signed new contracts with civilian customers and execute them on time. Also, under the state defense order, we continue to build and bring out for battle ships for the Russian Navy. And the main result of the year in this direction, of course, was the transfer to the fleet of the third patrol ship of the project 11356 "Admiral Makarov", where 27 December was solemnly raised Andreevsky flag.