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Putin sets task of ensuring stable development of metallurgy

July 16, 2012, 22:57 UTC+3

Putin noted that over the past 10 years Russian metallurgical companies have invested more than one trillion roubles in the modernisation of their enterprises

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MAGNITOGORSK, July 16 (Itar-Tass) —— President Vladimir Putin has set the task of ensuring stable development of ferrous metallurgy which is one of the main sectors in the Russian economy.

“It is showing good results”, Putin said at a meeting on the development of the industry, held in Magnitogorsk on Monday, July 16.

“The metallurgical industry remains one of the cornerstones in the Russian economy and incorporates more than 1,300 enterprises that employ thousands of people, mainly highly skilled ones,” he said.

However despite “good results, you should not stop”, the president said and admitted that the “situation in the international metal markets is quite volatile”.

“After the dramatic decline in 2008 and 2009 demand for metal has restored but remains unstable and prices for many products are far from pre-crisis levels,” he said.

Putin recalled that the state had supported the metallurgical industry during the crisis, including by providing state guarantees. “Today our goal is to ensure stable development of the industry,” he added.

According to Putin, metal products “should be needed in the domestic market” and urged manufacturers and consumers to “build a long-term partnership and make contracts with clear pricing formulas”.

“Such predictability will allow enterprises to build long-term development strategies and invest more in their technical and technological upgrading,” the head of state said.

“Growing investment activity in the industry has become an important sign of the last several years,” he said.

Putin noted that over the past 10 years Russian metallurgical companies have invested more than one trillion roubles in the modernisation of their enterprises.

However now the investment peak has been passed and investment in modernisation will keep declining, the chairman of the Board of Directors of Novolipetsk Steel, Vladimir Lisin, said.

Putin instructed the government to work out a solution to the problem.

“There is no need for hasty decisions that can exacerbate the situation in regions”, the president cautioned.

Owing to investments the wear and tear of fixed assets has decreased from 53 percent in 2002 to 40 percent in 2011. “Thirteen percent is a very serious result,” Putin said.

“I doubt that any of the neighbouring countries with a developed metallurgical industry has such an investment boom,” he added.

Investment projects sustain demand in consuming industries such as automobile industry, fuel and energy sector, ship- and aircraft-building, and construction.

“Over the last five years, about 190 billion roubles have been invested in the production of strips and large-diameter pipes alone, about 76 billion roubles in projects aimed at improving the quality of rolled sheets, 61 billion roubles in the improvement of railway wheels and wheel bands, and the production of longer lengths of rails, about 88 billion roubles in supporting demand in rolled products in amounts needed by the construction industry,” Putin said.

“Our ferrous metallurgy should acquire a new look and should introduce new technologies more actively, including energy and resource saving ones, and make products of advanced processing,” he said.

It is also necessary “to modernise enterprises in accordance with environmental standards and get rid of polluting facilities”.

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