19 february 2011

Prime Minister Vladimir Putin holds a meeting with Sverdlovsk Region Governor Alexander Misharin

Participants:
The two officials discussed the region’s socio-economic development, including the state of its major industrial enterprises and single-industry towns. Speaking about the large-scale investment programme that also includes the Uralmashzavod facility, the prime minister pointed out the need to protect the enterprise from the aggressive dumping policy of certain foreign companies. Mr Putin and Mr Misharin also talked about ways to make the region’s industrial facilities more environmentally friendly.

Transcript of the beginning of the meeting:

Vladimir Putin: Mr Misharin, I recently met with the head of Uralvagonzavod and a representative of the Ministry of Industry and Trade to discuss the company's prospects for this year. But Uralvagonzavod is only one of your region's major enterprises playing a significant role in Russia's economy. How do you evaluate their current state? Let's begin with your region's key issue – the state of industry and major industrial companies.

Alexander Misharin: Mr Putin, I believe that 2010 was a year of recovery from the crisis. And that is what indeed happened. Our gross regional product grew by almost 10% and industrial production rose by 16.9%. Our enterprises managed to increase their revenues by 34%. Our gross regional product exceeded 1 trillion roubles for the first time. Another important trend is that the high added value industry is growing at an increasing rate. The output of vehicles more than doubled in 2010. We've grown by more than 14% compared to the crisis year of 2008. This suggests that Uralvagonzavod has recovered from the crisis. It currently has record-high production volumes. Even in Soviet times, this company was manufacturing fewer railway cars and now it is also manufacturing locomotives. We commissioned a new locomotive during your latest visit.

The Uralmashzavod plant plays a significant role, too. Some two years ago – or two and a half years– Uralmashzavod was not manufacturing drilling rigs. But last year it made 8 rigs, this year it is expected to build 16 and it will reach an output of 50 rigs. The plant's investment programme currently exceeds 3 billion roubles. The plant's performance has almost doubled every year. It is doing very well.

Vladimir Putin: We will need to protect these companies from dumping policies. I'd like you to draft corresponding proposals in cooperation with the plant's upper management. I have already given the Ministry of Economic Development related instructions. Some of our partners are attempting to pursue dumping policies in our market and we need to respond.

Alexander Misharin: Yes. We are also developing another facility. You know that Nizhny Tagil is a single-industry town and the chemical sector is being developed there under the related programme for single-industry towns. In 2010 we finished drafting a project for 1 million metric tonnes of methanol and involving the investment of 13.4 billion roubles. All loan agreements have been signed and the project has been set in motion. We expect to use investment of 6.4 billion roubles this year. This will allow us to create a complete chemical industry for plastics and other related materials rather than for methanol only. This is a good project that has solid prospects.

We are launching another project in construction materials, including the production of various construction mixtures and fillers that are currently being imported in Russia. We believe that after this facility is commissioned – the inauguration is planned for the end of this year – it will meet 70% of Russia's demand in these materials.

We also saw a fairly good growth in housing construction last year. The sector grew by almost 11%. We commissioned 1.7 million square metres of housing last year, which is 11% more than in 2009 and more than in 2008. In Yekaterinburg alone we commissioned 1 million square metres of housing. These are unprecedented amounts, even compared with figures for Soviet times.

Vladimir Putin: Yes, I know that your construction sector is doing well.

Alexander Misharin: I believe it's important, too.

Vladimir Putin: Mr Misharin, there is another issue that we need to discuss. Thank God that industrial production is growing. The issue concerns the environmental impact. How do you address this issue when modernising your facilities, introducing innovations and so on?

Alexander Misharin: Indeed, the Sverdlovsk Region is currently one of the most troubled regions in terms of the environment. In this respect we have adopted an environmental programme and each facility is carrying it out. For example, the Pervouralsky Novotrubny Zavod, a large pipe plant, has recently inaugurated a state-of-the-art steel facility with a capacity of 1 million tonnes per year and a rate of waste purification at 99.7%. We also commissioned a new production line at the Sredneuralsky Copper Smelting Plant, which helped raise the rate of waste purification from 60% to 99.6%. A similar programme is being carried out at the Seversky Pipe Plant. Two large-scale projects are being implemented at the Nizhny Tagil Iron and Steel Works and the Uralmash facility. I recently visited the Uralmash plant. There is a huge difference between what the facility was a year ago and what it is now. A new line has been installed at the plant's metallurgical section, which cut emissions significantly.

Moreover, we have already signed an agreement with the wholesale power generating company Enel OGK-5 that operates the Reftinskaya district power station. The station produces 30% of the region's solid emissions. A programme has been adopted to cut the emissions in two, but it will take several years to accomplish this. Anyway, the project has been launched and is working. I would also like to mention that we will soon commission another gas-powered generation unit with a capacity of 410 MW at the Sredneuralskaya district power station. This will be a most efficient and modern generation unit, including in terms of its environmental impact. All in all, I would say that we are addressing environmental issues even though there are still many ongoing problems. First of all, more attention needs to be paid to household waste, emissions, waste water treatment and the corresponding facilities, including in Yekaterinburg. These are pressing issues, along with those in the housing and public utilities sector. We have drafted a programme for the sector through 2020 and it requires spending 220 billion roubles.

And there is another question. You have instructed me to ensure the ice rink is opened. We have done this. It is open today. We have also provided uniforms for a women's ice hockey team and they have begun training.

Vladimir Putin: The ice rink I drove by?

Alexander Misharin: Yes. You instructed me to ensure that it would be commissioned by the New Year.

Vladimir Putin: That was not an instruction. You told me that it was open, but residents of the region later told me it was not. Or rather it was open but for local officials only...

Alexander Misharin: Now it is open.

Vladimir Putin: For everyone?

Alexander Misharin: Yes, it is open for everyone since the beginning of the year.

Vladimir Putin: Great.

Alexander Misharin: I would also like to thank you for your support. This is the perinatal centre that is under construction in the town of Verkhnyaya Salda that we visited.

Vladimir Putin: The ice rink is in that town, isn't it?

Alexander Misharin: Yes. And this is Pervouralsk (showing materials) – this is site determined for housing we once discussed.

Vladimir Putin: When I learn to skate I will come to skate at your ice rink.

Alexander Misharin: Do you remember the antiviral drug I gave you? I would like to thank you again for your support. We completed the tests, and the results were good. This is this medicine's new packaging. I believe it will be on the shelves in the second half of the year. It works well, especially now, during a flu epidemic.

Vladimir Putin: Have you certified it?

Alexander Misharin: We are completing the process. We have made significant progress in that...

Vladimir Putin: Good.