Interview with President of JSC "United Shipbuilding Corporation" Alexei Rakhmanov
The newspaper "Vedomosti" in its issue of May 10, 2016 published an uninteresting interview with the president of JSC "United Shipbuilding Corporation" Alexei Rakhmanov. Our blog brings her some shortened version of this interview, in the version posted on the website edition.
- What are the indicators of USC in 2015?
- According to preliminary calculations, the revenue will be summed at the level of 304 billion rubles. (+ 8% in 2014), net profit - more than 20 billion rubles. (Increased by about two times). At the same time, our order backlog estimated amount of about 1 trillion rubles., A significant proportion of it provides a long-term program of military shipbuilding. But we certainly see and quite a large volume of orders, which can perform for our oil and gas, fishing and shipping companies. Target for 2016 - about 400 billion rubles. Revenue and 14 billion rubles. Net profit.
- 1 trillion rubles. - A list for how long?
- This is the amount of the order, to which we can expect in the medium term - up to 2024-2025 years. It is clear that this figure can not be taken into account emerging new projects, the real figure may be higher. And if we extrapolate our revenues for the years 2014-2015. a 10-year period, it will exceed 3 trillion rubles. In this regard, our key objective - increasing the proportion of the portfolio of orders of civil and military-technical cooperation (MTC, arms exports).
- What is their share in the proceeds of USC?
- The share of civilian shipbuilding this year - 10%, and the task in 2025 to bring it to 25%. Share in BTC - 15%, the remaining 75% - is the fulfillment of the state defense order.
- What are the main objectives you set for yourself now, after fifteen years of leadership USC?
- I see the USC mission is to strengthen the country's defense: high-quality and timely implementation of the state defense order and at the same time do everything to support the production, economic and infrastructure development of the civil shipbuilding. We, as a responsible manufacturer committed to providing the demand of both Russian and foreign customers for high-tech ships and vessels. And as a responsible employer we pay serious attention to the training and retraining of personnel - in order to raise the level of knowledge and skills in the entire shipbuilding industry.
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- Non-competitiveness of the car industry in the USSR was able to integrate into the world market, not least due to the fact that with your participation were created understandable and attractive to investors, the rules of the game. How big is the role of industry officials?
- When I was engaged in the automotive industry, we felt that in order to be globally competitive in certain sectors, we need to have a volume of not less than 3 million products. This can be done, if you combine a number of assets. This option was not supported because of the difference of shareholders' interests [of automobile enterprises]. So we went for option "B" - "Localization" - and that is implemented today. Maximum development of the state that is interesting: the tax base, new capacities. And a system of state selective aid to those who can reach the level of, at least a little close to the global automotive industry.
- What do you think you can manage to pull shipbuilding, as once the auto industry?
- If you want to laugh God, tell him about your plans. It will be possible or not depends not only on me but on my team, on the situation in the country on the world stage. There are a lot of factors, and I would not make plans.
I am ready to engage in the development of the industry as much as the country's leadership sees fit.
Everyone has an error, a lot has not yet been done, but we are trying to build an effective structure, not to lie, to fulfill its obligations, to appreciate their employees. As much as it may sound pompous.
I would like to build a system with resistance to complex industry-climate, which in a few years we are trying to catch up on everything that has been done 20-25 years.
You open, it happens, and you read the article, "the USC repair submarine 12 years." It seems to be true, but let's ask: how USC was financed last 10 years? And it turns out that a more or less adequate money allocated only last 3-4 years. In this sense, I am grateful to the Government and the Ministry of Defence that appeared rhythmic funding.
The main customer
- While USC remains primarily a military equipment manufacturer. Are you satisfied in conjunction with the customer difficulty as the Ministry of Defence?
- I would never complain about your customer, whether it is the Ministry of Defense, commercial company or travel agency in Finland. The customer has the right to demand, is entitled to their opinion. But it must not be forgotten that in shipbuilding products manufacturing cycle, taking into account the design takes up to 6-7 years. During this time, changing laws, managers, economic situation. Often without adjustments do not, for objective reasons, and here we are arguing with the customer. But I am sure that in each case we find a solution, because everyone is trying to do what is best for the country.
And we, and the Defense Ministry are interested in clear and transparent rules of the game. If you want from me the finished product on time, it is possible when I get the right to discipline their suppliers for missed deadlines. And for those who do not have direct contracts with USC, I can not do it. And if we agree on the procedure for passing ships, it is possible to speak about the performance or non-compliance with its obligations USC only if passed by the order and the amount of work remain unchanged until the end of the contract.
- How well do you do for a military order?
- Margin of military orders on any of the projects does not exceed 6%.
- The adopted amendments to the Federal Law № 275 of the state defense order, tighten the procedure of payments between the customer and can not reduce the margin even further?
- We are absolutely clear why they are taken. Obviously, bringing order to the budget funds needed. Nevertheless, in spite of the stated objectives, the law does not create incentives to reduce costs. Moreover, we almost lose the Treasury function. Except, perhaps, the administration of payments.
Elementary loans to cover cash shortages become a problem, and the interest on the loan fall in net profit, which is already enough to swear.
Particularly acute in the realities of the Federal Law № 275-date is a question the use of the Ministry of Defense standard for penalties. In the current realities of their size becomes comparable with revenues of enterprises. And then what? Bankruptcy? I do not think that this state approach.
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There is a saying: hard to swim against the tide, especially with their hands tied. This is exactly the situation. To achieve high economic efficiency in terms of more regulation, to put it mildly, difficult. We talk about our problems, and I'm glad that we hear in the Ministry of Defense. Hope, discussed the changes in the federal law will help solve most of our problems.
- The annual report of USC said that Russia in the period 2009-2014. He ranked second in the number set by the world market submarines, corvettes and frigates. Whether these positions?
- As long as we produce the quietest diesel-electric submarine in the world ( "Warszawianka" Project 636), we will be buyers. Until we produce the armed corvettes and frigates, we are interested in foreign customers.
- What else is our best ships of foreign analogues, but what they lose?
- We still produce submarines and surface ships cheaper than foreign ones. In this regard, the Russian production is of great interest. We learned how to build war machines for the efficient allocation of arms, we have very good relations with the suppliers of the corresponding systems.
At the same time we are sometimes criticized, that we build the ships, which serve well, but not to live, while the majority of foreign competitors in building ships, in which people live with all the comfort. I do not take this remark as a reproach, but as praise. Our ships do not always look glamorous, but it is good to perform combat missions.
With regard to export activities, we are pleased that the adopted amendments to the legislation to allow management companies integrated structures qualify for the right of foreign trade activities in the field of military products. We hope that from 1 July 2016 USC will have the right to conduct independent foreign economic activity. In this case, we are together with "Rosoboronexport" will be able to more effectively prove that the Russian weapons is the best in the world.
- Why do you do if there is a "Rosoboronexport"?
- The fact that colleagues concentrate on the direction of the "main attack" - the supply of finished products, and in any case it will be the responsibility of "Rosoboronexport". But there is a smaller deal, which is effective for us, but not so interesting for him: the same spare parts, servicing, modernization. We know this topic a little deeper and be able to master it, it seems to us, faster and more efficiently.
- In 2014, Russia became the world leader in the export of warships in displacement due to supply the Indian Navy aircraft carrier "Vikramaditya" (former "Admiral Gorshkov"). Anticipated more such orders?
- I do not want to reveal military secrets. I can only say that we have quite a large backlog of orders. Backlog at the MTC Corporation and a half decades.
- But the first place in 2015, Russia lost?
- Such calculations - none of our business. I think more correct to ask the Federal Service for military-technical cooperation.
- There is a program of construction of medium and large amphibious ships due to the large depreciation of the existing ones?
- Of course. On the "Yantar" plant being built such ships, and one of them is scheduled for delivery in the near future.
- What is the need for them is the Ministry of Defence?
- I think you'd better answer to the Defense Ministry, if not deem this information to a military secret.
- Are there any plans in the foreseeable future if it overhaul of the aircraft carrier "Admiral Kuznetsov", and a long stretch without him?
- Again, I will give an answer similar to the previous one.
- What is the fate of the second triple frigates of Project 11356, the construction of which the Kaliningrad factory "Amber" was suspended due to non-delivery of Ukrainian gas turbine power plants?
- We continue to work within the framework of the state defense order. But it is also considered fundamental possibility of the completion of the second triple frigates of Project 11356 for the benefit of the Indian Navy. The engines for these vehicles are fully paid to the Ukrainian side, manufactured, and at the moment they are in their factory. In the case of the adoption of the Indian side the decision to purchase these frigates we know how to solve the problem.
- Is there a program of import substitution in engine?
- The program has also actively implemented. As I said, there are several players who, with the assistance Minpromtorga design and preparing to start production of the major ship systems: diesel generator sets, gas turbine units, main propulsion systems. Test samples and prototypes have already made, we hope to begin mass production until 2018. In this case, the USC will be their main customer.
- Who will produce the engines?
- Work on the turbine engines of the Russian manufacture is conducted in Rybinsk on "Saturn", we expect to receive their engines from 2018 for gas turbine gearboxes will be made of the St. Petersburg factory "Star". Also work on import substitution, but the ship's diesel engines is to Kolomna near Moscow plant. We are working on localization and production of diesel engines imported brands.
In civilian sector
- Why Russian shipbuilders account for such a tiny proportion of Russian orders for civilian equipment -. 4% in 2009-2014, according to the USC report for 2015?
- Domestic shipbuilders are building as much as they bought domestic shipowners. The reasons are not the biggest demand - cost and cautious attitude towards the quality of products. Devaluation of the ruble made that part of the works and services that provide the Russian shipyards, quite competitive on the world market. However, the cost of components in the global division of labor remained the same, and the same for shipyards in Germany, Korea or Russia. For example, only 5% of the price of the trawler up design work and only 15% - the cost of the actual construction. At the same time, the lion's share - the price of imports (50%) and national (20%) of materials and equipment. These figures show that the price of 2/3 is laid on the table in the designer, who chooses the equipment. And he chooses it in accordance with the terms of reference of the customer.
We strive to rectify the situation by going from design organizations. But keep in mind that long breaks in their work, have occurred in the past decades have led to the destruction of continuity. This affects including in the implementation of design solutions speed.
- How will you increase the share of civil orders in the portfolio? And it is important, if the state defense order for decades to ensure you download the shipyards?
- If you look at the USC only as a military shipbuilding company, then you can forget about the future. This is including the fact that the financing of the state defense order rush subsides by 2020 Evolve, we can only consortium producing and military and civilian equipment. All major innovation, all the technological breakthroughs, all modern shipbuilding enterprises management practices come to us through the citizen, through communication with suppliers, designers, and so on. D. The import substitution program also applies mostly to the citizen and it enables us to find solutions that can be easily adapted for naval shipbuilding. Any narrowing of the horizon of our communication, including with competitors, leads to stagnation in the industry.
USC plans to put a fleet of about 20 warships and vessels in 2016
Now, about the strategy of increasing the share of civil orders. We work to reduce costs in order to offer customers more attractive prices. Now combine the shipyard in clusters in the North-West region are implementing the concept of a distributed shipyard: spend modernization of enterprises, not as separate production units, as well as the platforms group, each of which has its own specialty. On some we develop metal Cutting, production buildings and sections, others forming this production into larger units and then - in the finished products. Thus, we reduce investment costs, concentrate efforts at the points of competence and collecting finished Court where efficient from the standpoint of tax and customs legislation.
In December 2015 the USC has signed an agreement with the free economic zone "Lotus" in the Astrakhan region. It allows the production of the necessary buildings and sections us not to pay customs duties and VAT.
The corporation established control for each type of commercial shipbuilding. Sometimes they offer a rather unusual form of cooperation. For example, one oil and gas company, we are working on the scheme, the cost of the open (when the customer sees what margin we earn, see the whole structure of our costs, can be compared with world prices). In this way we show that is absolutely open, working at a fixed margin, which we agree from the outset.
- And what is the margin?
- In civil orders, we are working for a net margin of about 10-15%. This, on the one hand, not particularly large, on the other - allow development finance program. We see the construction of passenger ships one of the promising areas of activity, along with the creation of fishing and icebreaking fleet. In this position there is reason: the fact that the deterioration of the domestic courts in the present moment more than 70%, and the average age of the equipment for a long time exceeded the specified operating time. It is typical for the river and for the fishing fleet, as well as for river cruise ships.
Thus, updating the civil fleet vessels bound. And USC has the manufacturing resources in order to increase the pace of manufacturing: the necessary power is on SMZ, the Amur shipyard in the group KNRG (a group of "Caspian Energy" Astrakhan - "Vedomosti."), At the Khabarovsk plant, Nizhny Novgorod plant "Red Sormovo ". And, of course, a lot of potential in the USC shipbuilding cluster in the North West, the real rate of growth in the region Shipbuilding - 10-15% per year.
This topic may add that we expect to create a captive leasing company, which will be one of the tools for financing transactions ( "Goznak-leasing"). We plan that one of the leasing companies under the jurisdiction of Industry and Trade will be transferred in the next few months USC. Its capital is now about 10 billion rubles., And we will gradually increase the volume of orders. The law on the budget for 2016 is expected contribution to the charter capital of the USC in the amount of 4 billion rubles. These funds will be spent on the development of the leasing of passenger ships. The problem - for 10 years to build a leasing company with a portfolio of orders at the level of 300 billion rubles. We will start to build equipment that neither in Russia, nor in the Soviet Union was built about 50 years.
- The leasing company is the sales tool or another and should earn?
- Of course, the main thing for us is to create an additional market our products. But there is no point in creating an unprofitable business.
- USC's not all civil projects can be implemented?
- We are not ready to build ships with a displacement of over 100 000 tons - there on the trigger power limit for lifting mechanisms. But the implementation of the program of technical re-equipment will be able to produce a displacement of up to 250 000 tons. Another question is whether it will demand? In answer it, in my opinion, can only state by running long-term planning mechanism. And I also appeal to pay attention to such an effective tool as input-output balance, for which in Soviet times was responsible Gosplan, and now Rosstat and the Ministry of Economic Development.
- Which segments of civil shipbuilding the most promising for USC?
- At the moment, we have built about 45 units of sea and river equipment, including transport, research, rescue and auxiliary vessels. 17 icebreakers and ice ships of different classes, including a series of 60-megawatt nuclear icebreakers Project USC 22220. obviously the largest producer of ice-breakers in the world.
We also have the relevant competencies for the construction of high-tech specialized vessels for offshore operations. This is the segment where we are valued, and where Russia needs to stake out their place and continue to actively compete in the global market.
We know how and we are able to build drilling platforms and all kinds of marine equipment for oil and gas offshore. Plus there is a certain experience in the construction of fishing vessels, vessels of mixed profile "river - sea".
Grown to dividends
- What is the investment program at USC 2015-2017 gg. and what will the investment?
- Total in 2015 the USC Company implemented more than 80 investment projects of capital construction, reconstruction and technical re-equipment of production facilities, including 60 - in the framework of the federal program. The total amount spent on investment projects amounted to more than 11.8 billion rubles., Of which more than 6.6 billion rubles. - The federal budget.
In 2016, the amount of which is formed of the budget funds, credit money, as well as equity, it was to be about 37 billion rubles. However, the situation is changing in connection with the optimization of the budget.
We believe that the investment will create a modern shipbuilding industry for the construction of civil and military vessels, marine equipment (including ice-resistant), and warships; to carry out the replacement of worn out equipment in the modern; develop and build new engineering services and networks; repair and build objects of capital construction. The main issue now with optimized performance of our investment program.
- What percentage of in 2015 were loaded USC power and how this figure may be in 2016?
- The average rate will be uninformative. It is better to talk about specifics. So, in the factories of the Northwest Cluster, including our shipyard in Helsinki, current loading approaches 100%. But the Far Eastern companies, by contrast, underutilized. In 2016, we expect to normalize the situation on them by redirecting incoming orders and greater inclusion in cooperation.
- Is it important to USC because of its defense tasks to be profitable?
- Of course! Like any business structure. During 2014 the USC for the first time in the history of dividends paid - about 500 million rubles. (USC Board of Directors has not yet considered the question of the payment of dividends for 2015 and also appointed the date of the Annual Meeting of Shareholders -. "Vedomosti"). We plan to continue to do that, to be efficient and profitable, if only because that the profit will be one of the main sources of funding for our development.