Transcript of the beginning of the meeting:
Dmitry Medvedev: Mr Shantsev, we have held a successful event. It is always a pleasure to open or create something and press the button. But this button represents the work of thousands of employees over the last few years, not to mention the condition the plant was in just five years ago. We were just talking about this.
Valery Shantsev: Especially during the crisis.
Dmitry Medvedev: It was very hard during the crisis. I hope this new model – in fact, a flexible new model line – will bring money to GAZ Group and, by extension, additional revenues to the budget, as well as jobs and salaries for employees. The development of new production lines is a good thing. They create high-tech jobs. This is what we are talking about and trying to achieve. This shouldn’t be the only example. Considering the industrial potential of Nizhny Novgorod and the Nizhny Novgorod Region, you should do this in other places. What could you say about this?
Valery Shantsev: The GAZ plant is the most important example of modernisation and technical re-equipment. The introduction of new lines of light, medium and heavy-duty commercial lorries along with cars – this is what the plant was missing. At one time the plant produced only 30,000 Volga cars, so Gazelle, a light commercial vehicle, had to bear all overheads and GAZ sustained losses all the time. This year GAZ has produced a profit and owes profit tax for the first time. So first, this is what the budget gains.
Dmitry Medvedev: I’m pleased to hear that.
Valery Shantsev: Second, the plant has created new jobs with high labour productivity.
Suffice it to say that we now have about 25,000 employees and will hire 2,500 more by late 2013. GAZ focuses greatly on staff development and quality issues. They have a workforce training centre named Next-Generation Workers. They go through a full cycle of training.
Dmitry Medvedev: Someone described this programme today. It’s a good one.
Valery Shantsev: They have simulators of all production and manufacturing processes. In addition, they have created a corporate university for 90 specialties for engineers and workers.
Dmitry Medvedev: What I said at the beginning of the meeting is important: they have retained their set of skills and professions. As a matter of fact, Gazelle Next was designed by Russian engineers. This is not a foreign car, and it is quite competitive in terms of technical specifications.
Valery Shantsev: They have incorporated international experience and took into account Russian specifics.
Dmitry Medvedev: I saw it, and the engineers told me that it was designed the way all modern cars are designed now using digital modelling and 3D design. Moreover, manufacturing capacities were created for this model as well. That’s the right thing to do.
Valery Shantsev: We have implemented over a dozen investment projects of this kind over the last five or six years. This year we will commission a PVC plant with a market capitalisation of 56 billion roubles...
Dmitry Medvedev: I know, they told me.
Valery Shantsev: 330,000 tonnes of PVC will be used to manufacture...
Dmitry Medvedev: Who are the partners?
Valery Shantsev: Sibur and Solvay, a Belgian company.
Dmitry Medvedev: When are you going to commission it?
Valery Shantsev: In December 2013. The startup and commissioning work is underway. It is going to be a major production facility with a casting-rolling plant at Vyksa Steel Works and a deep catalytic oil cracking facility at our refinery in Kstovo, for a price tag of $1.2-$1.4 billion.
Dmitry Medvedev: Major projects, indeed. Most importantly, they will create new jobs.
Valery Shantsev: They will instantly increase our revenue by 50-60 billion roubles.
We finished last year with the industrial production index at 7%. Now, in the first quarter of 2013, we are already at 6%. We have come close to 1 trillion roubles in total sales, and GDP grew by 3.6 times during my governorship.
All indicators add up, but our most important goal is per capita income. In 2005, we lagged behind the Russian national average by 25%. Now, this difference shrank to only 6.5%, meaning that we are making rapid progress. This indicator has been improving throughout Russia, mind you. We will resolve the issue in a matter of two years at most.
Dmitry Medvedev: The Nizhny Novgorod Region has enormous growth potential.
Valery Shantsev: Life expectancy increased by six years. The birth rate is up as well. We are still experiencing a decline in population, but it’s 4 times less than in 2005. A year or two from now, and we will start growing, which is still a problem for mid-European Russian regions.
Dmitry Medvedev: Yes, it’s still a problem. The fact that you are building new production facilities is important for the overall growth of the industry in the region, the contribution to gross regional product and the government’s revenue base, as well as for the people who get modern jobs and decent pay.
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