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16 Sep, 2010 08:15

Reborn ceramics factory underlines SME investment potential

The rejuvenation of a Moscow region ceramics factory has provided a role model of the benefits of investment and the vastly increased productivity which follows.

Just five years ago another rundown post-soviet factory, 50 million euro in investment has transformed Pavlovsky Ceramics into a role model of state of the art small manufacturing efficiency.

Managing director, Vladimir Savelyev, says Just 12 workers keep control over the production lines, while everything else is done by machines – bringing the total workforce down from more than 700 to just over 100 – and bringing about productivity which has transformed the plants future.

“When the factory work became economically unprofitable the management decided to restructure the plant. We are now five times more efficient”

But Pavlovsky Ceramics is the exception rather than the rule, with smaller and medium sized manufacturing businesses often facing investment shortages, and a range of other issues when considering modernisation.

Russian lawmakers and businessmen are trying to work together to address these issues to promote more efficiency and modernisation.

Russian lawmakers together with businessmen try to create necessary conditions so there will be more modern and efficient business projects. Sergey Guriev, Rector of the Higher School of Economics, says that it is in the smaller private sector that modernisation and productivity can bring about the biggest transformation, which is why companies like Pavlovsky Ceramics are so important.

“Only private business can really modernize Russian economy. The state can only create conditions, like taxes and interest rates, protect the cost of property rise and pave the way for easy investing, but the real move is expected from the private sector.”

The need to create a healthy investment climate, which could flow into diversifying and modernising industry, has been the subject has been the subject of countless exhortations and numerous policy papers. Russia’s economy needs more plants, factories, and businesses which can so obviously demonstrate the advantages – with Pavlovsky Ceramics a role model for a more dynamic Russian private sector.