19.05.2022
On May 17, the Aluminium Association held a webinar titled 'Export Potential of the Russian Aluminium Industry in New Conditions'. The event was attended by experts from the Russian Export Centre, the Industry Development Fund, the EAEU Business Council, the Russian Union of Industrialists and Entrepreneurs and the Aluminium Association.
The webinar's participants discussed a wide range of issues currently faced by the Russian aluminium industry: maintaining export potential in the face of closed access to traditional markets, providing production processes with imported raw materials and components, attracting trade and project financing and refocusing export activities to new markets and suppliers.
The webinar was moderated by Elena Asanova, Head of the Direction for Coordination and Interaction with the Market of the Aluminium Association. She emphasised that the Russian aluminium industry is deeply integrated into global production chains, so the challenges faced by the industry today were unprecedented.
Artem Asatur, Co-Chair of the Aluminium Association, recalled that by the end of last year, the aluminium industry had recovered from the pandemic, and there was a growth in the market for consumption of aluminium products by Russian companies. Now the situation has changed dramatically, and although it is too early to assess the consequences of the pressure experienced the aluminium industry, there is a general downward trend in the demand for aluminium products from the Russian economy's key sectors. According to the results of surveys of the Association's members, sales are expected to reduce by an average of 15% in the next 3 months. Companies are experiencing difficulties with logistics and receiving payments from their customers. Companies integrated into global supply and production chains found themselves in the most difficult situation. Annually, Russia exported significant amounts of aluminium products worth about USD 1 billion. At the same time, as Artem Asatur notes, most of it was transferred to the EU, so the most sensitive blow to aluminium companies was the boycott of Russian cargoes by international sea carriers. In addition, since July of this year, the EU has introduced a complete ban on imports of Russian flat-rolled products, which accounted for more than 50% of exports or about 50 thousand tonnes of export volumes of Russian producers per year. The Aluminium Association considers the decision of the Eurasian Commission to temporarily zero out import duties on aluminium products to be poor. Import liberalisation will be targeted and take into account the actual situation in the market: today, the internal capacities are sufficient to meet the needs of consumers in Russia and the EAEU, including in aluminium flat-rolled products.
JSC REC's experts provided detailed information on the government's measures to support exports. The Russian Export Centre (REC) focuses on supporting exporters of Russian companies, helping to find new sales markets and providing subsidiary, financial and insurance support for exports. In 2021, REC started 16 support programmes for a total of RUB 37 billion, 5 new programmes to support industrial exports, including certification of industrial products, R&D, homologation, after-sales service and a new model of exhibition compensation. In 2022, the total amount of support doubled compared to 2021, making RUB 72 billion. According to Nikita Kondakov, Head of Cooperation with Development Institutions and Export Support for the Metallurgical Industry, more than 18,000 exporters used REC's services in 2021. In addition to the traditional credit guarantee support for business, new products are offered to support critical imports, which include the search for alternative suppliers (arrangement of negotiations and supply chains), preferential financing of imports of critical products, insurance non-repayments under import contracts and non-repayment risk insurance.
Also, Egor Voronkov, Senior Examiner on Subsidies Administration, and Lyudmila Ermolova, Senior Manager for Short-Term Credit Insurance of JSC EXIAR (part of the REC's structure), spoke about subsidiary and insurance measures to support exporters.
Ivan Belozerov, Head of Projects of the Investment Projects Expert Examination Department of the Industrial Development Fund, presented information on relevant measures to support industrial production facilities. The most universal support programmes that may be of interest to the Aluminium Association's members include the Development Projects programme. It is designed for projects aimed at import substitution and the introduction of the best available technology (the amount of loan varies from RUB 50 to 500 million for a period of maximum 5 years). The Components programme is designed for projects aimed at organising and/or upgrading the component production (the first loan is for investment and is maximum RUB 1 billion; the second loan is for production scaling and is maximum RUB 500 million). Other popular programmes include Priority Projects, Labour Productivity Improvement and Component and Resource Base Building.
Sergey Mikhnevich, Director of the Centre for Multilateral Cooperation of the Russian Union of Industrialists and Entrepreneurs, Executive Secretary of the EAEU Business Council, introduced the participants to the information about the activities within the EAEU, mechanisms for business cooperation development and opportunities for supporting the business interests on a global stage. The Russian Union of Industrialists and Entrepreneurs (RSPP) is actively running at various venues, including the EAEU Business Council, the Business 20 and others. The international activities of the Russian Union of Industrialists and Entrepreneurs (RSPP) are aimed at providing the full participation of Russia in the world economy, facilitating the entry of national companies into international markets, increasing product exports, integrating value chains and participating in the international regulation development.
The speeches and the topics proposed for discussion aroused great interest among the webinar's participants. The proposed support measures are highly demanded by the aluminium industry's companies engaged in international economic activities. The speakers' reports with detailed information about support programmes and contacts are available through the link.