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13 May, 2008 12:13

Putin the PM appeals to shipbuilders

During his first working visit to St. Petersburg as Prime Minister Vladimir Putin has visited the city’s federal shipyard. While there, he called on the country to improve its competitiveness in ahipbuilding , as well as providing maritime services.

In his first week on the job Prime Minister Putin is taking up where President Putin left off.

In his last State of the Nation address Putin set out a goal. The goal is to win a decent niche on the global shipbuilding market.

Now in his new capacity Putin is overseeing the implementation of this objective – a task no less challenging than the rescue of a sinking ship.

At the moment he is in his hometown to chair a shipbuilding industry conference and inspect the construction of a new ice tanker at the local shipyard.

Commercial shipbuilding in Russia is barely afloat at the moment. Local producers have been losing out not only on international markets, but also domestically. About 80% of Russian orders go to foreign firms. It's little wonder the industry has been sending out an SOS to the government for more than a decade.

“Shipbuilding is to become an engine for growth of the Russian economy's high-tech sector and can generate innovation and spark a serious demand for cutting-edge scientific discoveries. Also, we must not forget about the crucial role that shipbuilding plays in defence. At the moment we are concentrating major financial and administrative resources in this area,” said Putin.

Last November the United Shipbuilding Company was created in order to consolidate the existing shipyards and shipbuilding companies in Russia, of which there are about 40 around the country.

The government has chosen the strategy of identifying some niche markets where domestic shipbuilders might have a competitive advantage. One of them would appear to be in the production of ice-class tankers. Vladimir Putin has been inspecting one of them at St. Petersburg’s Admiralty shipyards.

Putin mentioned the fact that shipbuilding in Russia requires 3-5 times more labour input and at least twice as much time as abroad.

“At the moment, ships are built abroad faster, are better and sometimes cheaper. Russian-based customers prefer to build ships in other countries and our money goes there. Our shipbuilders are losing out in quite a few substantial areas – specifically in terms of labour productivity, production organisation and the rate of innovation,” he said.

Visiting the Admiralty Shipyard

However the Admiralty Shipyard, which Putin visited on Tuesday, has already emerged from dire straits. One of the most successful Russian shipyards, the company has been producing specialised craft such as ice-class oil tankers. Capable of operating in ice-bound waters, these vessels are seeing a surge in demand as Russia and other countries are turning to the Arctic shelf for hydrocarbons.

Less than a week after becoming Prime Minister, Putin is still settling into his new role. His speeches have grown longer and are more loaded with economic terms, while his assessment of Russia's economic realities seems to be even more critical.