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Russia – Germany: ‘Smart’ Factories – Increasing Productivity with Network Technology

May 29, 2017, 19:41 UTC+3
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For several decades, Germany has been an important strategic partner for Russia, number one in investment and number two in trade turnover. A new promising area of collaboration is technology of the fourth industrial revolution.

Germany accounts for 9% of Russia’s external trade. In 2016, the turnover stood at USD 41 billion, even though its rate, which had been steadily growing, halved after the mutual sanctions took effect.

  • Russia’s major exports to Germany are fuel and energy (43%), and from Germany to Russia they are machinery and equipment (33%).
  • In 2017, the trade turnover between Russia and Germany started growing again; in the first three months it rose one third year-on-year to USD 11.6 billion.

Germany is a leading investor in the Russian economy (over USD 16 billion).

  • Major German companies operating in Russia are Volkswagen (motor vehicles), Siemens (electronics and equipment), and Novartis (pharmaceuticals). Daimler (Mercedes cars) and Bionorica SE (pharmaceuticals) plan to localise their operations in Russia.
  • A survey conducted by the Russian-German Chamber of Foreign Trade and the Eastern Committee of German Economy in early 2017 showed that 63% of the German businesses working with Russian companies expect a rise in their sales in 2017, 40% of them believe they can increase the number of their employees in Russia, and about 30% plan to invest in Russian business.

The fourth industrial revolution opens new prospects for collaboration. Germany was one of the first countries in the world to extensively implement high technology in manufacturing. A complete transition to “Industry 4.0” is expected by 2030.

Russia is also beginning to develop this area. By 2035, the country plans to construct 40 “factories of the future”, i.e. production facilities where processes happen in the digital space with no human involvement or are arranged into process flows via the industrial internet.

In early 2017, the Government approved the TechNet roadmap and allocated RUB 15.6 billion for it (50% budget and 50% нextra-budget funds).

  • The first “factories of the future” will appear at the Central Scientific Research Automobile and Automotive Engines Institute (NAMI), Ulyanovsk Automobile Plant (UAZ), and Volgabus Automotive Holding. Another digital factory is to be launched for the Nevsky Shipyard and St. Petersburg Marine Design Bureau Malachite.

Against this background, Russia is keen to maintain dialogue with international partners and create maximum transparency for investors willing to build up their local operations and support high-tech manufacturing. 

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