According to Alexei Ulyukayev, Russia’s Minister of Economic Development, this would act as a “safeguard mechanism” for the Russian economy, aimed at boosting domestic production of nonwovens and equipment for the industry. A final decision regarding the proposal will be made by Russian president Vladimir Putin.
However, according to Ulyukayev, a final decision, regarding this issue, will soon be taken by Russia’s President Vladimir Putin.
“If the government finds out that such steps correspond to the interests of national economy and in particular the domestic industry of technical textile and nonwovens, then such a decision will be taken,” Putin has said. “However we are not planning to impose a ban if this damages local industry and production.”
The President’s initiative has already been supported by some well-known Russian top officials. According to Denis Manturov, Russia’s minister of industry and trade, the imposed ban will spur a significant increase of production by domestic manufacturers. “This will allow us to increase domestic production of textile and light industry products to create new jobs and increase the volume of tax receipts to the federal budget,” he says.
At the same time, in addition to nonwovens, the government has not ruled out the possibility of banning or significantly increasing duties on raw materials, which are used in the production of nonwovens. Among these are are viscose, chemical fibers and new generations of manmade yarns, of which local volumes of production remain insignificant.
In the meantime, the government’s plans to possibly impose a ban on imports of nonwovens and machinery have already sparked critics by some well-known Russian analysts in the field of nonwovens and textile industries.
According to Valery Hartung, first deputy chairman of the Duma’s committee on industry, imposing such a ban could negatively affect local consumers. Instead, he suggested the government needs to provide additional subsidies and other benefits to domestic producers, maybe via favorable taxes, cheap loans and other supports.
Vasily Goushchin, general director of the textile enterprise cluster association of the Ivanovo region, says any sanctions should be imposed only in specific segments of the market, notably for state and defense contracts. He added that the ban would negatively affect thousands of small businesses across the country.
In the meantime, local producers also believe that state aid can be provided not only through direct subsidies and financial support but also through the development of cooperation among the producers and consumers as well as state promotion using the same model as in some European countries, particularly Germany.
They have also added that the imposition of a ban on the supplies of the industry’s equipment will have even a more severe negative impact on the industry.
In recent years, a significant number of local nonwovens producers (total number of which is currently estimated at more than 1000 enterprises) have announced plans to modernize production facilities and significantly increase their production volumes, however the imposed ban may prevent implementation of these plans.
According to analysts of the Russian Ministry of Industry and Trade, at present the level of depreciation of fixed assets in the Russian nonwovens industry is one of the highest among all segments of the national textile and technical textiles industry. In this regard, the industry is acutely in need of modernization.
This is reflected by the fact that the level of depreciation at some industry plants has reached 90% because the majority of their machines were supplied in the 1960s and 1970s.
In addition, the majority of national enterprises often use outdated processing technologies and even more outdated technologies, which date back to the early 1970s.
The current seriousness of the situation in the industry is reflected by the fact that, so far, many Russian industrial enterprises in the field of nonwovens have already suspended placement of orders for the production of machinery and equipment in Western countries due to the already imposed restrictions on its supplies to Russia and the threat of the introduction of new sanctions.
This has already resulted in the almost 40% reduction in volume orders for machines in some EU countries, particularly in Germany (which, so far, has been one of the main suppliers of equipment for the Russian nonwovens and technical textiles industries) in accordance with the results of the first half of the current year.
Wilfried Schäfer, chairman of the German Association of German Machine Tool Builders, has already confirmed this. According to him, business relations with Russia are currently based only on outstanding orders.
The same situation is currently observed in the case of imports from Italy, Japan and other countries, which, have also been among the biggest suppliers of equipment for the Russian technical textile and nonwovens industries.
In the meantime, an official representative of the Russian Ministry of Industry and Trade, (who asked not to mention his name due to fears of dismissal, similar to Sergey Belyakov, Russsia’s former deputy minister of economic development, who was recently fired after publicly criticizing decisions made by the Russian government), has already confirmed the existing problem. According to him, there is a possibility that many industry players will be forced to shift to equipment from China, despite the fact that the quality of these lines is significantly poorer the quality of Western imports and even local production.
In the meantime, the imposition of the sanctions has already resulted in the increase of prices for equipment for Russian nonwoven producers.
So far, leading Russian producers of nonwovens have already expressed their concerns regarding the current situation in the industry, which, according to them, may result in failure of implementation of many investment projects in the industry.
According to an official spokerperson in Nimpromtex, one of Russia’s largest producers of nonwovens, the sanctions have led many local nonwovens producers to fear that Western equipment suppliers will not be able to fulfill their earlier obligations and supply equipment that has already been bought and paid for because European imports could be halted at any time.
Data collected by the Russian Association of Nonwovens Producers, show that the current problems in the industry and the ongoing sanctions war between Russia and Western countries will likely result in the decline of the domestic market of nonwovens this year. Last year the market size reached 2.6 billion square meters in volume terms and there is possibility that these figures may significantly decline this year.