Petersburg, despite the crisis, stays an industrial city - the share of revenues from the industrial sector in the city budget revenues is almost 40%. Analysts believe that the future of the city is connected with the development of innovative industrial sector.
Denis Kozhin
In St. Petersburg, there are more than 740 large and medium-sized industrial companies involved in virtually all types of industrial work. The industrial sector is still the main source of replenishment of the city budget. The contribution of industry to the formation of a profitable part of budgets of all levels, compared with other sectors of the economy of the city is the largest - 38.8% (according to 2015 results). In the past year, according to the "KIT Finance Broker" company, consolidated budget of the Russian Federation was refilled with 284.9 billion rubles due to the industrial sector of St. Petersburg.
Elena Ulyanova, chairman of the St. Petersburg Committee on Economic Policy and Strategic Planning said that on the whole the industry of St. Petersburg represents all industries, belonging to the group of high-tech and medium-tech (high-level) activities: chemical industry, production of machinery and equipment, manufacture of electrical equipment, electronic and optical equipment, manufacture of transport equipment.
An indicator of the St. Petersburg industrial sector health is the index of industrial production, which this year for the period from January to March amounted to 101.8% in annual terms.
Dmitry Krutov, the Director for development of "Trust" holding, notes that the single food industry in January - March 2016 showed an increase of 20.6%. To a large extent, such performance is a consequence of the import substitution program. "Most companies needed time lag for the reorganization and strengthening of production according to the new economic realities and the needs of consumers, however, the success of the food sector is directly dependent on foreign policy: the period of sanctions and restrictions on imports of certain products, the national currency and other factors", - believes Mr. Krutov.
However, the food field has a share of not more than 10% in the overall structure of the Petersburg industrial complex. The main burden has traditionally accounted for the machinery production - about 25%.
The Chairman of the St. Petersburg Committee for Industrial Policy and innovations Maxim Meyksin says: "Petersburg is one of the leading manufacturers of engineering products among other regions of Russia, providing 10.8% of the total volume of engineering products in the country at the end of 2015".
According to him, to date, the first positive results in the machine tool industry have already appeared. Despite the fact that the domestic machine tool industry has suffered greatly over the past decade, the city was able to largely preserve the unique scientific-technical school of design and the technological and industrial potential. "For example, a tool industry cluster was created and operates since 2012 in St. Petersburg. The cluster combined virtually all North-West machine-tool equipment manufacturers to achieve a common goal – provision of the life cycle “R & D - manufacture production - serial production", as well as active participation in the creation of the modern market innovative, high-tech equipment and technology services for the leading sectors of the economy and industry of Russia ", - said Maxim Meyksin.
However, the decreasing trend remains dominant in mechanical engineering, largely due to the downturn in the car manufacturing market. Thus, in St. Petersburg it was reduced immediately by 14% by the end 2015. "However, one can speak about the formation of a pent-up demand for this sphere, which is directly connected with the stabilization of the economic situation in the country and the growth of incomes of the population. But against the background of mass consumer refusal to buy new vehicles auto components and spare parts manufacturing increased by more than 20%”, Mr. Krutov notices a positive trend.
“Petersburg tractor plant”, which has concluded a number of major contracts for the export of tractors "Kirovets" in Europe, in particular France and the Czech Republic, also contributed to the support of the sector.
"Among the most promising for St. Petersburg branches production of medical devices and pharmaceuticals can be distinguished. The growth of the sector is contributed to by the state order volumes increase and focus on drug analogues and generic drugs produced in Russia. Moreover, the appearance of a pharmaceutical cluster in St. Petersburg and its quite active development indicate a high potential of the sector in the future ", - Mr. Krutov believes.
According to "KIT Finance Broker", the share of the pharmaceutical industry of St. Petersburg is about 6.2% in the national figures, including a number of unique drugs and substances. According to the St. Petersburg Committee on Industrial Policy and Innovation, more than 18 investment projects with the participation of Russian and foreign pharmaceutical companies worth more than 37 billion rubles originated within the pharmaceutical and medical industry cluster in the period from 2010 to 2014.
However, Dmitry Dergachev, president of the pharmaceutical company "RIA Panda," is somewhat skeptical: "In St. Petersburg, the pharmaceutical industry today that started on a merry note, in spite of the declared preferences, stagnates. I find the preferences for this domestic industry sphere miserable, not giving impetus to its development in the existing competitive environment and the almost total dependence on imported in everything - in engineering, process equipment and substances! ROI in pharmaceutical manufacturing is for a long time not seven habitual years, but entire fourteen ones. "Registration hell", attention of tax authorities to a large (more than 2 billion rubles a year) business, entailing endless inspections of companies, and many other factors suggest that the new large-scale projects in the pharmaceutical industry of St. Petersburg will not come soon "- the manufacturer laments.
Traditionally, defense sector enterprises take a significant share in St. Petersburg. Basic "specification" of St. Petersburg enterprises is the production of radar, navigation equipment, equipment for telecommunication. The major share is provided by JSC "Concern VKO "Almaz - Antey".
Dmitry Dergachev considers the shipbuilding sector to be the most promising - both for military and civil orders. "In fact, the announced course for the restoration of the fishing fleet, the projects in the Arctic Ocean, requiring an update of the icebreaker fleet - all this can provide St. Petersburg with orders for a long time, - said the expert - The arms industry is another traditional sphere for the city, which is leading in terms of development in today's geopolitical environment. There is a huge potential of small private enterprises, which generally is not yet unlocked".
Anna Ustinova, a leading analyst of "KIT Finance Broker", believes that in the medium term, the main drivers of growth of the industrial sector will be the companies producing engineering products, food products, metal products and fabricated metal products.
"With regard to the dynamic and promising sectors in St. Petersburg, here we denote the following areas: innovation sector development, as well as the development of agriculture and food," - she said.
Clusters are created for the development of innovation, in particular "Cluster of medical, pharmaceutical industry" and "Cluster of information technology, electronics, instrumentation, communications, and information and telecommunications development".
"The city established innovation support infrastructure at different stages of the life cycle."St. Petersburg Technopark", "Ingria" business incubator are one of key elements of IT-cluster, partially receiving funding from the city budget, and partially from private investors" - Ms. Ustinova said.
Ilya Shuravin, Rusland SP managing partner, believes that urban industrialists should focus on high-precision technologies, various types of communications, shipbuilding, intensively developing dual-use technology.
"Unfortunately, without the integration of urban programs into the federal industrial strategy these projects is almost unreal", - the expert said.
"The city did not develop electronics industry, is being the building protected from vibration built in the Soviet times is still a "skeleton" in the territory of the former leader of the electronics industry "Svetlana"; I think there are no prospects here, the situation is very similar to pharmaceutical substances – in Russia it is unprofitable to manufacture chips either, private business will not do it, and the state plans on this subject are unknown", Dmitry Dergachev doubts.
Maxim Fedorchenko, Deputy General Director of "Liman-trade", also believes that "lagging" industries may include high-tech production, in particular, the telecommunications industry. "But this is a historically constituted problem with brain drain: many bright minds have gone abroad in hard times, thus creating human spaces at the enterprises. They are recovered for decades, even though the state is now doing everything possible to create all the conditions for the normal work of young professionals, workers in knowledge-intensive industries in the country".
Dmitry Fomin, analyst at Conomy, speculates: "The Future of St. Petersburg industry in the medium term is quite ambiguous. Shipbuilding is obviously the most protected industry - St. Petersburg experimental design bureaus and plants account for 70% of R & D and 40% of manufacturing in the country, and this industry will be support by state orders, the attraction of investments to modernize production, active involvement of the local factories for the production of components in the production cycle, as well as large-scale personnel reorganization”.
Also, according to the analyst, the actively developing branch of medical technology and pharmaceuticals has excellent prospects - St. Petersburg pharmaceutical cluster is recognized as a priority and is the largest in terms of investments and dynamically developing cluster in this direction in Russia. It already includes more than 150 companies, of which about a hundred are production ones. This segment will be supported by the practice of international cooperation and technology transfer, as well as the benefits derived by the residency of many representatives of the industry in the SEZ "St. Petersburg", also represented by companies of IT-industry, precision instrument and innovative enterprises of electric power industry”, Mr. Fomin said.
By the time of final economy escaping from the recession the automotive sector has all the chances of growth in the future - consumer demand will come back with the growth of real incomes in due times, which could provide an impetus for new investments.Also, taking into account the lessons of the last year and a half, there is hope for the development and diversification of the food industry - because of too narrow a focus, even with regard to the import substitution policy, the industry was not able get positive results in 2015, whereas the growth of the food industry in the region amounted to more than 6% .
"When it comes to pessimistic forecasts, metallurgy and instrumentation may be in an awkward position in the short term: businesses suffer from excessive growth in electricity tariffs, which in conditions of low demand for the products makes the risk to put many of them on the brink of survival. However, among them the production, supported by the state in will be a slightly more advantageous position: it’s defense field and agricultural engineering", - Mr. Fomin said.
The experts are is even more pessimistic. "Already several days I hear in "Business-FM" that the country's oligarchic-power clans are "forcing off" more or less big business, which previously, under normal energy prices, few people are interested in. This is the harsh reality, with which our holding has been living for more than a year, fighting from one, then from another attack in almost "permanent raider seizure", we develop business in St. Petersburg like during war, under the slogans of support for domestic producers. Therefore, whether the appetite of the reach this world would spread to the hairdressers and bakeries, or stop at the plants and small factories is the main question to be answered in order to predict which sectors will appear, and which will disappear", said Dmitry Dergachev from "RIA Panda. "
However, there are more positive representatives of manufacturers. Blazej Bernard Reiss, CEO of TPV, said: "All the sectors have high potential due to the concentration of highly qualified staff, excellent logistics base, the availability of energy resources, but once again I want to repeat my thesis: the economy of St. Petersburg, as well as the Russian economy, is necessary to be developed on a principle of backbone industries rather than individual companies. The development of one sector cannot take place in isolation from the other ones. For example, in our factory the appearance of the new TV model on the conveyor entails employment of the enterprises for the production of packaging, plastic molding, as well as transportation companies".
"We can say with confidence that the existing industrial capacity and development of new production facilities will allow the industry of St. Petersburg to maintain a leading role in the economy of the city in the medium term. In my opinion, engineering, food industry, metallurgy and metalworking, pharmaceuticals and electronics will stay the key sectors of the industry", Mr. Meyksin says.
"Saint-Petersburg Government pays special attention to the support and development of the industries that have received the status of priority: the pharmaceutical industry, engine and machine tools manufacturing, electrical equipment manufacturing (electronics and optics), shipbuilding, production of vehicles. Plans for supporting the industries are developed, enterprises receive targeted aid. At the same time to maintain a diversified economic structure, most of the measures to bolster the economy, currently existing in St. Petersburg, apply to almost all main types of economic activity. Since January 1, 2015 "package" of tax incentives was extended (the ones established, depending on the number of employees and wages), terms required for certain administrative procedures have been reduced", - Ms. Ulyanova said.
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