President of Russia Dmitry Medvedev: Colleagues,
We are meeting today at the site of one of our core companies in the shipbuilding field, the Northern Machine-Building Enterprise (Sevmash).
Our discussions of developments in shipbuilding in recent years have made us fully aware of both its problems and its prospects. It is clear that the way this industry develops, including Sevmash, will determine the success with which we face one of our country’s key challenges, that of creating a fighting core within the Russian Navy by 2020.
We certainly have the conditions necessary to do so. Of course by this I mean the scientific and design potential which is really considerable even though it has of late fallen into some neglect. We do have well structured shipbuilding and ship-repair industries. And most importantly we have the desire to deal with this issue today.
Of course we cannot ignore the consequences of the processes which unfolded in the 1990s. At the same time we clearly see the challenges of today.
The products of the industry, the ships that will be built must of course meet the highest standards in this area. They must be equipped with the most sophisticated weapons, they must be competitive and, most importantly, they must be equal or superior to their foreign counterparts. There’s nothing particularly new about these requirements. In the USSR they were met quite successfully, which is why those days we had one of the world’s most advanced and efficient navies. Our goal today is to regain naval leadership.
What are our problems today? What difficulties do we need to resolve? Despite the fact that we are able to build modern vessels, we have a problem with their mass production, and this problem should be addressed even in times of crisis.
Certainly, we can not any longer tolerate the situation when works of building some ships commenced as far back as in the 1980s but are still far from completion, especially while no other ships are being built at all.
Our task today is to discuss how we can make sure that modern efficient ships can be produced en masse. This will give us the opportunity to realise the full potential of the facilities we already have, and as we saw today the potential of Sevmash, for example, is huge. The production unit that we visited is absolutely unique, the only one of its kind in the world.
That said, not all of the production capacity is currently being used as it should be. The situation in the industry must be reversed in order to retain its core staff, to maintain its research and manufacturing capacities, which I think is just as important. But of course the main thing is to concentrate our efforts today on introducing modern competitive technologies which are in demand in international markets.
No doubt, this is also the key to innovative development of our country. This meeting is taking place in Arkhangelsk Region. Our next meeting today will address issues of energy efficiency, and in fact energy efficiency is crucial for the shipbuilding industry, it is a key element for its development.
Generally speaking, the current situation requires that we modify our work. We need to learn how to organise production in the modern sense, in the same way that it is organised all over the world. We need to finally learn how to manage production costs. Only then will our products be competitive. Otherwise, no matter how unique our ships are and no matter how experienced our personnel is, we will not be able to sell these ships in Russia or abroad, unless cost efficiency is fully ensured. This is our most important challenge.
Sevmash now has the production potential to meet that challenge. I had a detailed discussion on the subject with the company CEO [Nikolai Kalistratov] today. Of course, additional investment is required to procure new opportunities which will help the company remain a key business targeting both Russian and international customers.
Today Sevmash is engaged in performing a major investment contract for the renovation and modernization of the air-capable cruiser Admiral Gorshkov commissioned by the Indian Navy. This is the first such contract we have had and that is why there are many problems to be resolved while progressing with it.
This contract is unique in its scope and its complexity, as well as in the sorts of reconstruction it involves. In effect we are making a full-fledged aircraft carrier out of a ship that was planned for construction in the late 1980s. It is imperative that we accelerate completion of the works.
I had talks on this subject with our Indian partners and I am aware of some contentious issues. All of these disputes should be resolved, the basic parameters of the contract scope should be ultimately negotiated, and works under the contract should be completed – after all, it is a matter of national prestige. Successful performance of this contract is also crucial for the future of Sevmash.
Once again I would repeat that this is a unique, complex project. But it must be completed within the timeframe that has been specified, and according to the basic parameters which will be negotiated.
Generally, this is a major contract for Sevmash and for our entire shipbuilding industry. It is also a key component of our international cooperation. Today Russia and India are strategic partners in military cooperation therefore we all must in every way contribute to its successful development.
I think we should discuss this topic today along with some other issues.