ENERGY
The Russian energy sector is currently facing serious challenges. First of all, it is the need of rapid expansion of generating facilities capacity, adaptation and implementation of advanced technological and management solutions in the industry.
There is a high percentage of steam turbine CHP plant usage, which loses gas turbine and combined cycle power plants in cost, energy efficiency, terms of commissioning and economic competitiveness, and the lack of alternative energy sources development and alternative ways of its usage.
A shortage of qualified staff and inefficient organization of work is observed in the industry. All these restrain the development of the Russian energy sector.
Executed state plan of the power economy development involves upgrading of the existing facilities to a considerable extent and affects capacity expanding to a lesser extent.
In the tender procurement system cheaper equipment and projects are preferred as a rule, which greatly complicates the work of the foreign companies on the Russian market and forces them to invest in the opening of assembly plants components in Russia, which significantly reduces logistics costs and delivery times.
AGRICULTURE
In the context of the global economic crisis, Russian agriculture can become a very attractive industry due to the fact that the demand for its products is constantly maintained and is on a high level. The industry receives subsidies from the federal budget, uses preferential taxation, the mechanisms for leasing of agricultural machinery are implemented, and every season grain interventions which regulate prices are carried out. However, there is a tendency for volume of livestock and poultry, dairy products reduction, etc. It is expected that the market will be declined by more than 5% annually.
Current expenses for food of the population accounts for about one half of the cost in the budget of an average family.
It is expected that in the nearest future the concept of cattle-breeding complex development, which will be oriented to the establishment of organizations specialized in breeding of cows and subsequent production of livestock products will be the most successful.
WTO accession could significantly displace the Russian producers, particularly in the livestock industry and flour milling segment, when it will be difficult to compete with European producers in case of significant reduction in the tariff duties.
CONSTRUCTION
The level of construction industry development is a very accurate health indicator of the any economy.
The largest share of the total area in Russia is taken by housing construction; the share of low-rise buildings is significantly increased. Large-scale construction of low-rise buildings has become possible due to modern materials and technology, which allow building reliable and long-lasting home for the Russian climatic conditions.
In the low-rise construction the monolithic brick technology is used regularly. Load-bearing structures differ from monolithic reinforced concrete, and the external walls laid out from a brick or other piece materials. At the same time, in the individual building traditional material - wood (glued nosing strip and rounded log) is still popular).
Since the beginning of the century several trends in the construction industry were identified, in particular, for the housing sector - the private investment domination, increasing interest in the individual and low-rise housing, and a clear stratification of housing in quality and price, from economy to premium.
New trends in terms of roofing materials also affected the roof materials. Slate and tin lost their former positions, they were replaced by such long-term materials as mild shingles or metal tile made of aluminum or steel with polymer coating.
The economic crisis has had a significant impact on the pace of construction and the level of investment in the industry; however the figures of private and commercial construction show a gradual increase in this segment in recent years.
CHEMICALS
The level of the chemical complex development has an effect on the level of other industries development, as almost all of them are the chemical products consumers.
Chemical production is typical for many regions in Russia. The largest chemical clusters are located in the Republic of Tatarstan and Bashkortostan, Altai, Perm and Krasnoyarsk regions, Tula, Tyumen, Yaroslavl, Nizhny Novgorod, Volgograd, Samara, Kemerovo and Irkutsk regions. Chemical production played a major role in the development of these areas.
The state plan «Strategy of development of chemical industry for the period up to 2015» identifies two main ways of increasing the efficiency of the industry:
- production base modernization
- improving the competitiveness and innovative capacity of the industry
The economic crisis caused reduction of demand in almost all the range of chemical industry products. There was an urgent need in measures implementation both for short-term support and long-term development of the industry. To keep a minimum level of profitability the plants had to to reduce the volume of production, reduce their staff, and turn to the financial institutions and federal bodies of the executive branch for support to refinance the loans or co-finance the projects that have already been launched.
Those of Russian enterprises of the chemical industry which lost their usual marketing outlets suffer difficulties now. In some cases, the situation can be changed by increasing demand from the government side or from the natural monopolies and state corporations only.
Along with the demand and financial strength regulation, the most important anti-crisis policy direction-is the retention of the strategic development targets of the domestic industry, particularly, passing ahead the development of the chemical industry with a high added value. The real economy staffing is no less important.
One of the trends of the global financial crisis on the market of chemical products has become a struggle for the consumer by dumping policy. In this regard, the question of domestic producers’ support and market protection from low-quality products has become particularly acute in Russia.
ENGINEERING
Production growth in the engineering industry is gradually increasing recent years, making up more than 10% annually. However, the industrial manufacture growth is heterogeneous and fragmented.
Taking the factor of low technical base into consideration, it was mainly supported by state investments in infrastructure, agricultural subsidies and budget stimulation of consumer demand for cars. However, an expected production growth in civil aviation has not happened, and the decline in civil shipbuilding production has continued.
The analysis of the industry productivity allows us to allocate only a few types of machinery industry, the production of which has already been recovered from the shock crisis collapse - such as automotive, agricultural machinery, power equipment, railway equipment, etc. However, in many cases, this recovery has been a result of a serious state assistance.
Consumer demand for many products in Russia during the crisis was decreased less than investment, and was recovered faster. It is evidenced by the production of consumer electronics which has already exceeded the rates of 2008. In addition, a demand was considerably supported by consumer lending.
FMCG
Recently, Russian consumers increased their spending on consumer goods, which led to more than 10% increase in sales in cash and 5% increase in volume. Increase in expenditures of key product categories, such as dairy products and groceries has become the main reason for the sales growth.
Market trends allow to predict the growth of market capacity and the volume of sales, however a significant increase competition is predicted, which will require additional efforts of producers to maintain the planned growth.
Low products availability at the stores located in regions and an increasing purchasing power requires substantial investments in the distribution of FMCG producers in these regions.
Despite the fact that the Russian consumer has restored the level of the essential food consumption very quickly, he is increases the expenses for additional categories such as confectionery, snacks and premium personal care much more carefully.
HEALTHCARE
Since the year of 2005 the state has paid its attention for healthcare. In the period from 2007 to 2011, the total volume of government expenditures on healthcare has been increased twice, including the national «Zdorovje» («Health») project expense.
Expenditures of the consolidated budget for health care and physical culture in 2012 make up 949,6 billion rubles., that is almost two times higher than in 2006.
Problems solving of the staff in rural areas are planned, where the lack of young professionals is observed. A special program for medical graduates, who agrees to work at a rural hospital, grants one million rubles.
For the last six years Healthcare segment has become a major customer of construction: it covers both small outpatients' clinic and federal medical centers.
In 2012, the Russian government has increased healthcare expenditures for all the sources, including federal and regional funding, as well as the budget of the Federal Compulsory Medical Insurance Fund (CMI). The funds will be primarily used in free medical care, salary increase, regular supply of consumables and food. Expenditures reduction by 5-10% annually is planned for the near future.
Research Brief
Twitter
LinkedIn
Facebook