HSE presented research data on current trends in import substitution for industrial enterprises. According to the study, the level of dependence on foreign components remains quite high. The least problems with equipment are experienced by oil and gas companies, while the greatest challenges are faced by coal mining organizations and companies providing services in the mining field.
In a study conducted by the HSE at the end of 2022, more than 1,000 industrial organizations from 30 regions of the Russian Federation were interviewed. The focus was on large and medium-sized industrial enterprises operating in the manufacturing industry, mining, as well as those providing electric energy, gas and steam, air conditioning, water supply, sanitation, waste collection and disposal, and pollution elimination.
According to the data obtained for the period from 2022 to the first half of 2023, 65% of production facilities «have the potential» to produce import-substituting products (the study does not specify what exactly this means and under what conditions this potential can be realized). Among these, 25% of enterprises are operating at the maximum level of their ability to produce import-substituting products, while 27% and 13% are operating at medium and low levels, respectively.
The highest level of readiness to produce import-substituting products is demonstrated by manufacturers of medicines and materials, with 50% defining this level as high and another 33% as average. Among the leaders are also manufacturers of machinery and equipment not included in other categories (40%), manufacturers of electrical equipment (35%), rubber and plastic products (34%), motor vehicles, trailers, and semi-trailers (33%), textiles (32%), as well as computers, electronic and optical products (30%).
45% of the heads of industrial enterprises stated a high need for Russian equivalents of Western equipment, while 32% of managers mentioned an «average» need. Only 10% of respondents do not require such equipment. Extractive enterprises demonstrate the highest dependence on imported equipment, with 85% being coal mining organizations and 84% being organizations providing services in the mining sector. Manufacturing enterprises also exhibit a significant reliance on foreign equipment, with percentages as follows: textiles (61%), chemicals and chemical products (56%), food (55%), clothing (54%), and medicines and materials (50%).
According to the study, only 25% of industrial enterprises currently possess new domestic equipment that is comparable in quality to foreign counterparts. Oil and natural gas production enterprises have the least need for new Russian equipment, with a 90% share.
Among manufacturing companies, leaders in terms of availability of new domestic equipment comparable to foreign ones are companies producing chemicals and chemical products (35%), as well as vehicles and equipment (30%).
Dependence on imported equipment among industrial enterprises remains considerably high. As of the end of 2022 to the beginning of 2023, 18% of managers reported an extremely high dependence, while 47% reported a high level of dependence.
In the short term, less than 10% of companies are prepared to completely eliminate the use of imported components, whereas over 60% of companies believe they will only be able to partially reduce their reliance on foreign equipment within one to three years.
When purchasing critical foreign components, 22% of enterprises resort to parallel imports. Nevertheless, 54% of respondents find this process challenging, while 35% of companies do not encounter any difficulties.
Source: HSE
