Insight into Russian Industrial Policy Via Roundtable Discussion on Industrial Development with Putin

Vladimir Putin met with the heads of Russian enterprises in the Kremlin manufacturing industry.

It’s a long read but very informative. Contextually, it must be recalled that Russia was almost totally deindustrialized by the Neoliberal Rape it suffered during the 1990s, which was also compounded by a severe lack of capital investment in virtually all areas of USSR’s economy during the previous twenty years, 1970-1990. So, when Putin took over in 2000, Russia had suffered 30 years of capital starvation. In many respects, todays USA resembles the Russia of 1995 in terms of deindustrializtion. As you read, you’ll begin to understand the role of the Russian state and its regions in the revitalization of Russia industry and how over the last 23 years all were joined together in a team by Putin and his associates to rejuvenate Russia. Could something similar be done within the Outlaw US Empire that’s run by the oligarchy on Wall Street? The only way it would be feasible is for that oligarchy to be ousted and the government to be infused with people having a social-capitalist mindset. Over 40 years worth of law and policies would need to be trashed, the entire financial system would need to be revamped, the Fed eliminated, and a very different development ethos implemented. More discussion on that problem would lead to a very different article. Besides Putin and Deputy Prime Minister Denis Manturov, ten business executives were invited to the discussion from a very wide selection of industrial areas. Only one is a subsidiary (albeit a JSC) of a State Owned Enterprise, although several businesses have hundred plus year histories, while a few are quite new. The transcript translation reads rather well. And so it begins:

Meeting on industrial development issues

Vladimir Putin: Good afternoon, dear colleagues!

We planned with Denis Valentinovich [Manturov], will meet today to discuss current issues, but I asked you to expand the circle of participants so that we can talk directly with those who work" on the ground "– well, if not quite "on the ground", then in any case closer than we are with him [d.Manturov] and than the big bosses in the form of all sorts of ministers and heads of holdings.

At the beginning, I would like to say a few words about the current situation in the manufacturing industry.

Overall, the situation is stable and stable. Manufacturing employment remains at the same level as in 2021.

If something is wrong, I will ask you to correct me, of course, because this is the purpose of our meeting today, so that I can hear if the estimates that we have are the same as those that you have, bearing in mind that you work directly in the teams.

So, employment remains at the level of 2021, and it is about ten million people – this is 14 percent of all employed in our economy. This is a decent level.

Wages are growing: in May, they exceeded last year's level by more than 20 percent – as I understand it, this is "nominal", in par value – 69.2 thousand rubles per month.

These two factors – the preservation of employment and the growth of wages-indicate that the Russian industry is gaining momentum, gaining momentum, receiving orders, and developing new areas. According to the results of the first half of the year, the growth of manufacturing industries in annual terms amounted to 6.2 percent, right?

Dmitry Manturov: Yes.

Vladimir Putin: This is a good result.

What would you like to draw your attention to here? And the attention of Denis Valentinovich, and, of course, your attention.

Everything is fine: wage growth, job retention-but the wage growth, judging by what we see, judging by what is happening, is largely caused by a shortage of labor. And you have to attract people, get them interested in a higher salary level. And this is already beginning to affect the situation of small and medium – sized enterprises in a certain way – and I won't say in the best way-because, as I understand it, you are attracting the most qualified specialists from there.

In this regard, what is very important and what am I driving at? To the fact that now the Government is making attempts, and not without success, to create a system for increasing labor productivity. And in the basic branches of production – and we are generally seeing a frontal increase in industrial production – we still have a slightly more than five percent increase in labor productivity. This is a whole series of activities that the Government is carrying out.

And of course, what the Government does at its own level should be translated to the level of concrete real production. We need to implement this at specific enterprises. Digital management and production systems should be implemented, [it is necessary] to improve the production management system, improve logistics. There is a whole set of measures that the Government is implementing.

D. Manturov: Automation.

Vladimir Putin: Yes, it is also connected with the informatization of production. A whole set of measures must be taken, because if simply due to a shortage of labor-this will lead to an increase in wage-related costs, then, you understand, in the end it will undermine the entire economy of enterprises. This is generally a matter of principle – increasing labor productivity.

When we talk about this frontal growth, that's what I mean. In the second quarter, production growth remains unchanged: if we had about 1.2 percent in the first quarter, now we have one percent-well, a close indicator. Just for a moment, in annual terms, it will be 12 percent, if we manage to keep it, and we need to try to do it all.

Which industries show the highest and best indicators? This is the production of computers, electronic and optical products – 30.4 percent, very good. The output of finished metallurgical products is 29.7 percent, almost thirty percent. Electrical equipment – 22 percent. Vehicles, excluding motor vehicles, – 22.1 percent. Let's talk about cars, this is a special situation.

We have a slight decline in the production of medicines, and woodworking has sunk. Well, in woodworking, Denis Valentinovich will correct me if this is not the case, but still the main problem is logistics. And here you need to lend a shoulder to those who are engaged in this type of activity, and help.

As for the help, I hope and would also like to get your feedback on how the support tools we have created work.

What do I mean by that? This is an Industrial Development Fund, the rate of one percent or three percent per annum for 10 years – from 5 million to 5 billion can be obtained. Then there is the cluster investment platform: there are already bigger and better loans – up to 100 billion rubles, which is already a decent amount of money. The rate of such a loan is linked, as you know, and I hope you all know this, to the Central Bank's rate of 30 percent plus three percent. I hope it works. I would also like to hear from you how it works.

Industrial mortgage. Here, up to 500 million rubles for a period of seven years is also a very good tool, in my opinion.

I would like to start with the report of Denis Valentinovich, so that you can listen and catch him in the fact that he tells something incorrectly. That's the whole point of our meeting.

But seriously, I would like to hear from you, of course – your assessments and suggestions, or rather, recommendations on how we should work together in the short and medium term.

Please, Denis Valentinovich.

Dmitry Manturov: Thank you very much, Mr Putin.

Back in January, we were very cautious about predicting manufacturing output growth of about two percent this year. You yourself mentioned the indicators for the first half of the year. If we keep the set pace, it will already be higher than we initially predicted.

It is clear that the main driver is state-owned companies that provide procurement, and, in particular, you have already identified the basic industries: These include radio electronics, metallurgy, railway engineering and, most importantly, machine tool construction, which is 35 percent this year, which means that these industries have increased by more than 20 percent. Also in a noticeable plus are leather products and clothing, which shows an increase of more than five percent.

At the same time, some industries are still in the negative zone in annual terms. You mentioned medicines. Last year was a high base, taking into account the covid and post-covid period. You will remember that at the end of August we launched three enterprises with your participation: in Saransk, Kaliningrad and St. Petersburg. They will reach full capacity by the end of the year. This will increase volumes, and we already see that starting in May, the pharmaceutical and medical industries are gradually recovering in terms of volumes.

Vladimir Putin:What is the main reason?

Dmitry Manturov: Mr President, covid saw explosive growth in 2021.

Vladimir Putin: Due to covid-19.

Dmitry Manturov: Yes. The first quarter of last year – it [was] fading, but nevertheless it was…

Vladimir Putin: These are" digital " indicators, most likely.

Dmitry Manturov: Yes. These are simply aggregated indicators for the industry.

Vladimir Putin: I see.

Dmitry Manturov: You have also focused on the automotive industry. This is indeed a very important industry, which is a big multiplier for other sectors of the economy. Here we also see a certain revival. Since April, we have been seeing a month-on-month increase over the previous year. If we take June, it is plus 52 percent compared to last year, to last June. It is clear that this was due to the withdrawal of Western companies from Russia.

But, Mr Putin, on your instructions, as you remember, we set a task for me: find a replacement for each enterprise. We have found a Russian beneficiary, a Russian company, for almost every enterprise, and they have selected industrial partners. An example of this is Moscow-Moskvich, in St. Petersburg there is now a new site at AvtoVAZ, in Kaliningrad Avtotor has resumed work…

Vladimir Putin: And where is it, Maxim Yuryevich?

M. Sokolov: The Nissan plant, in the north, in the Kamenka industrial zone.

Dmitry Manturov: And the Sollers plant in Tatarstan. That is, they have not just restored their work, they are already working – they have a reserve for the future.

In wood processing, the situation is uneven. You are absolutely right to support this industry, and you made all the necessary decisions at the meeting in February. We have already issued the necessary regulations in terms of support, especially for woodworking enterprises in the North-West.

The main problem, indeed, is logistics, that is, we are now rearranging all flows from the West to friendly countries. This is not only the East, but also Latin America and Africa. Especially after the forum, it also gives an additional order from our friends.

For furniture, we have an increase of 15 percent, and the growth inside. There is a release of those niches that were previously occupied by Western manufacturers.

Vladimir Putin: There are two factors here: the liberation of niches and the occupation of these niches by our producers, and a very important factor is the growth of consumer demand. At least one-third of our industrial growth is supported by the growth of consumer demand. About two-thirds, I must say bluntly – are defense and related industries, and related industries are also the work of industries with a double, triple effect. But at least one third is due to the growth of consumer demand. And this is a good indicator of the internal growth opportunities of the country's economy as a whole.

Dmitry Manturov: Mr President, I can't help but say something about the situation in the agricultural machinery industry and commodity items. Here, the dynamics are also uneven, and the grain price situation is still pressing on the industry. Here there are features of the fact that grain prices today when purchased by large trading companies are lower than last year's results. So now the situation, we hope, will level out.

Vladimir Putin: Growing, 7-10 percent growth.

Dmitry Manturov: Yes. And when we saw a reduction in the consumption of agricultural machinery in March, the Government promptly decided to allocate additional funds for the demand support program, Resolution No. 1432. The Ministry of Agriculture promptly prepared a plan for the purchase of agricultural machinery. Over the past six months, we have already achieved results in monetary terms, plus 17 percent, primarily due to a third increase in grain harvesting companies.

In general, Mr Putin, we have managed to pass the acute phase of external pressure almost without losses. You have outlined the employment indicators. Indeed, the manufacturing industry is the largest of all the sectors of the economy. Probably only trade, where 13 million people are employed, is bigger. Of course, we should pay due attention to this sector of the economy.

Its further development will be facilitated by the implementation of your initiatives in two key areas, Mr Putin.

You mentioned the cluster platform. As part of this support measure, we have already selected 16 projects worth more than 360 billion rubles. Among the bright projects, I will announce the organization of flat-rolled stainless steel production in the Volgograd region, high-purity polysilicon in Chuvashia, production for the organization of components for transport engineering, diesel engine construction, and pharmaceuticals. We still have 33 projects under development for more than a trillion rubles.

Vladimir Vladimirovich, you have set us the task of attracting $ 2 trillion in investment this year, and we are still moving towards this goal quite steadily.

Also in demand was the measure you proposed – this is an industrial mortgage. To date, 248 enterprises have used this tool for the amount of 22 billion rubles, loans have been received, and about 200 enterprises with their own projects are still under consideration.

And, Mr President, as you said, the Industrial Development Fund is a great support for new projects, and this institution has really proven itself well. You recently met with the head of this foundation. We have started implementing packages of concessional loans to commercial banks in order to free up liquidity on the fund itself, but the terms and conditions do not change for the borrower. Yes, of course, this is not so profitable for the fund, but for the Ministry of Finance, and for the budget as a whole, it is profitable not to make additional contributions to the capital, but to provide interest compensation. In other words, this is how we decided with the Ministry of Finance for this year and we will continue in this direction.

And secondly, you supported me on leaving foreign companies: the taxes that are paid to the budget, we will direct the main part of the funds just to capitalize the Industrial Development Fund.

By combining new and previously popular mechanisms, we were able to avoid an investment pause and supported businesses that are actively entering the free niches that are currently being released in the domestic market. We are talking not only about the final product, but also about components. And in this regard, taking into account the task set by you to increase technological sovereignty in the automotive industry, we provided benefits and loans worth 50 billion rubles to the automotive industry as a whole for the automotive component and aggregate topics only last year and part of this year. We will continue this work this year. This will ensure the stability of previous decisions.

The same applies to other industries where we will continue this work. At the same time, some of the projects that are being developed in the industry are aimed not only at the domestic market. This is an important task for getting preferences for domestic markets, but we still have a task to expand our capabilities and enter foreign markets.

Trade representative offices play a special role in their promotion. You made a decision five years ago to transfer this to the Ministry of Industry and Trade, and during this period of time we have managed to do a lot to improve this institution. If earlier consideration of a request from a business to a trade representative office took 30 days, today it is no more than five days, and in total, about 2.5 thousand transactions of our exporters are under the patronage of trade representative offices every year. If we take non-oil and non-energy exports per year, this is $ 9 billion, which is held under the auspices of our trade missions. In the past year alone, we have opened five new locations in Latin America, Southeast Asia, Africa, and the Middle East. In total, we are now represented in 78 countries.

At the same time, we actively conduct business missions. As you know, we already have a good tradition in Innoprom. It is basically held in Yekaterinburg every year, and you have attended several of them. We started doing field practice. In Tashkent-every year, this year Innoprom will be in Astana, next year-in Armenia, in Belarus next in line. And in other countries, recently in Saudi Arabia it was.

I want to say that in general, there are no prerequisites for isolating Russia on the external contours, and there can't be any. We redirect the falling volumes of Western markets to our friendly countries, and I can confirm that there is still great interest in Russia, in our exporters, and we will maintain the approaches that are developing today.

Vladimir Vladimirovich, taking this opportunity, would like to thank all the industrialists of our country for their responsible professional work during this difficult time for them. Our colleagues work with dignity and for the benefit of the development of our economy and industries in general.

On your instructions, we promptly invited our colleagues from various industries so that they would have the opportunity to speak out today. Everyone quickly came from different cities.

Vladimir Putin: I'm sorry for interrupting you from your current affairs, but it was unexpected.

I'd like to listen to you. Let's start right from the center.

Svetlana Valentinovna.

S. Andrianova: I represent the Faraday company. We are engaged in the production of shoes and clothing.

This year, with the help of the Ministry of Industry and Trade, we have doubled our capacity, including doubling the number of people in production. Wages have increased by 75 percent, labor productivity-by 25 percent.

Vladimir Putin: This should be leveled off slowly.

S. Andrianova: With the help of the Ministry of Industry and Trade fund – we were allocated money last year – we successfully purchased equipment, because at this time, at the end of the year, the euro fell, and we bought very well, almost 450 units. This year we are completely rebuilding and re-equipping the factory.

Vladimir Putin: Where is your factory?

S. Andrianova: This is the Tambov region, the city of Rasskazovo. We have a small city with a population of 42 thousand [people]. We are a city ‒ forming enterprise, so, Mr President, we invite you: on October 1, we will launch an updated factory, and we have not stopped, we are producing [products].

We have also added the production of components to the production of shoes and clothing, so as not to depend on components that are now very difficult to buy.

We try to ensure that people work with dignity and receive a decent salary. And so thank you very much for the help of the Ministry of Industry and Trade, we are trying our best. People are coming now. Of course, we don't have enough people, as you said: we would have recruited about 200-300 more people. This is despite the fact that we still have 50 percent of the shoe production capacity mothballed.

Vladimir Putin: We are free, it turns out.

S. Andrianova: Yes, because we don't have enough people. So here's the situation.

Thank you very much.

Vladimir Putin: Of course, you can't prepare it right away, just in one day.

S. Andrianova: Yes, we now have quite sophisticated computer-aided equipment, and that is why this year, in order to increase labor productivity, we have completely launched conveyor production of shoes.

A lot of young people came. Our staff is 60 percent female and 40 percent male, [it is] young people, rather "young" production. There are also pensioners: about 200 people over 60 [years] who work, and mostly up to 35-40 [years] ‒ quite a young team.

Vladimir Putin: How do you train specialists?

S. Andrianova: See for yourself. We have masters who teach new arrivals. In the future, if you have the opportunity and desire, we will help you study in technical schools, then in institutes, so that we can keep these personnel. We also provide incentives to keep the family tradition alive: if a husband and child still come, we pay everyone extra to keep them alive.

Vladimir Putin: What would you like to see as support in terms of training? Who would you need to establish practical work with? And what should this support consist of?

S. Andrianova: I think that since we are located in the region, we have a very large number of people leaving to work in big cities and in Moscow. This is probably why only when the overall well-being of this region increases, people will stay, including young people.

Vladimir Putin: And from the point of view of training the specialists themselves?

S. Andrianova: We have a narrow specialization, and in this situation only we and our masters are involved.

Vladimir Putin: Can't you establish direct contact with technical schools?

S. Andrianova: We are doing this. We have a technical school…

Vladimir Putin: Where is it located?

S. Andrianova: In Rasskazovo. We are now trying to work with Tambov institutes that produce quite highly qualified engineers, and we are taking them in. Plus, we still have quite a lot of enterprises that work for the defense industry. We also cooperate with them.

Vladimir Putin: So there is such a contact, right?

S. Andrianova: Yes. Exactly when we need to do some equipment upgrades now, but something is forbidden to us.

Vladimir Putin: Do they help?

S. Andrianova: They help.

Vladimir Putin: In other words, the development of the defense industry has such an indirect positive effect in cooperation with you.

S. Andrianova: Because they have enough highly qualified workers, and some of them are leaving for us.

Vladimir Putin: That's great.

Dmitry Manturov: There is a flow going on.

Vladimir Putin: It's clear. Have you used any of the support measures that the Government has offered?

S. Andrianova: What the fund offered, at one percent.

Vladimir Putin: Did you take out a loan?

S. Andrianova: Yes, he helped us a lot and on time. We are grateful because we purchased the most expensive equipment on time, and the most important thing is that it got there.

Vladimir Putin: At the expense of a low loan rate?

S. Andrianova: Yes, the most important thing is to be on time.

Vladimir Putin: Excellent, well done. Great.

S. Andrianova: So we are looking forward to seeing you here.

Vladimir Putin: Okay, thank you very much.

Lev Mironovich.

L. Gorilovsky: Good afternoon, dear Vladimir Vladimirovich!

Polyplastic Group is currently the largest producer of polymer pipeline systems. We have 30 production sites in our structure. We continue to actively invest and open new sites. This year, we plan to open a new production of polymer pipes in the Nadezhdinskaya TOP in Primorsky Krai.

In addition to new factories, we are also investing in new technologies. I would like to briefly describe the five import substitution projects that we have already implemented over the past two years.

The first project is a replacement for the European solution for high-pressure polymer oil pipes. Lukoil colleagues said about a year ago that they planned to use such technologies, but they were not available in Russia. We made the first such production, and together with them we started using these pipes. Our colleagues from Gazprom Neft have also started using these pipes.

Vladimir Putin: Have you secured an order for this project?

L. Gorilovsky: In this area, yes. Great interest from them. This is a necessary, useful, new thing that is already being done.

The second project is a project for oriented PVC pipes, special pipes that were previously produced in Spain and, surprisingly, were brought to Russia. Now we have also learned how to make them, and we opened our first production facility this year in Novomoskovsk, Tula region.

The third project is a drip irrigation project. Special pipes for drip irrigation, which were also European, Israeli. Now we have such a plant opened in Engels, producing these pipes for drip irrigation.

The fourth project is a project on equipment for sewage treatment plants. We have a whole set of different solutions that needed to be used for localization. We are now successfully doing this.

The fifth thing that I would like to focus on separately is the special technologies of the polymer profile that was previously produced only in Japan, which allows you to restore the underground infrastructure without digging. These are municipal and sewer sewers.

Vladimir Putin: It's like pumping into a pipe, right, such a "stocking"?

L. Gorilovsky: The profile is wound into the pipe, and a new wound polymer pipe is formed inside the old pipe.

Vladimir Putin: Yes, like a stocking.

L. Gorilovsky: The most interesting thing is that unlike European stocking technologies, this Japanese one was unique, because it was possible to create a completely new one regardless of the condition of the old collector. We have now launched this production also at our plant in Novomoskovsk, and it is already actively used. Several projects have already been completed in St. Petersburg. And, imagine, at a depth of 30 meters, the reservoirs that were previously made by this unique Japanese solution, so as not to dig up, are now made entirely from domestic materials from start to finish.

Vladimir Putin: I hope you will be able to join the program for the development of the housing and utilities system.

L. Gorilovsky: I would just like to stop here a little bit.

Vladimir Putin: I understand. There is still a lot of money – 500 billion.

Leonid Gorilovsky: If I may say so, I would like to say that we have experienced quite significant growth over the past year – about 20 percent in volume terms. This is, of course, at the expense of infrastructure budget loans and projects that are implemented at the expense of the National Welfare Fund. I would like to thank you very much for supporting such an acceleration in the pace of infrastructure development. This is really valuable and allows us to implement just new projects and create new production facilities.

Vladimir Putin: Despite the current situation and the need to support the defense industry, we have fully maintained the amount of this funding.

L. Gorilovsky: Thank you for that.

I would just like to point out that in about a year's time, we can see that these programs for infrastructure budget loans are coming to an end, and the need that is defined in the housing and utilities development strategy approved by the Government is more than 4 trillion rubles, and today less than half of it is provided.

In order to offer a real solution, we worked with colleagues from the Ministry of Construction, from VEB. We wanted to tell you about such a project in the framework of water supply and sanitation, which, of course, is necessary. Today, it is not possible to update it under the usual concession mechanisms, because there is not enough tariff capacity and it is impossible to pass it on to the population. An alternative funding program has been developed that could allow launching a larger volume of updates that are actually needed and approved in this strategy.

For us, of course, this is an opportunity to further increase our production capacity, because in all these programs, if we talk about volume indicators... If we calculate how many polymer pipes are produced in the country and divide them by the population, we will get about 3.5 kilograms per person. This is such a strange but specific statistic. If we take the same indicator in China, then in China it will be 9 kilograms per person. We definitely have much further to grow, and the need for updating the municipal infrastructure is great.

I would like to point out one of the reasons why there is such a difference between what we have and what our colleagues have. They determined that the underground infrastructure should be designed for 100 years or more, and made a strong-willed decision that it is not necessary to dig in 20-30 years – 100 plus. Therefore, there has been such a large amount of development of polymer solutions.

In Russia, as you know, the entire production chain consists entirely of domestic components. We buy raw materials from our colleagues from Sibur, and they are also very good at localizing new brands of pipe raw materials. Therefore, if the development of financing for housing and communal services through such programs is implemented, it will support the entire chain of producers and allow the population to get a better housing and communal services service.

Thank you.

Vladimir Putin: Yes, but we do not end these programs in two or three years, they are long-term and long-lasting-for how long, do you remember, Denis Valentinovich?

Dmitry Manturov: I don't remember, Mr Putin.

Vladimir Putin: But they are long-playing.

Of course, we need to make timely adjustments for the next budget cycles, that's for sure.

L. Gorilovsky: We have such a separate program. So that you don't have to take up any time at all right now…

Vladimir Putin: I understand, okay.

I understand that you started your work in an advanced development area. How do these tools work?

L. Gorilovsky: In fact, we have been working there for quite some time. We opened our first plant in Rakitnoye TOR, in the Khabarovsk Territory, a few years ago. This process is going quite well, so we are now opening a second production facility. It would seem that it is not so far away, Primorsky Krai, Vladivostok, and Khabarovsk Krai, but there is a need for separate production.

Vladimir Putin: What is it, two thousand kilometers?

L. Gorilovsky: I don't want to deceive you, but…

Vladimir Putin: Between Khabarovsk and Vladivostok.

Dmitry Manturov: Something like that.

L. Gorilovsky: But the transport shoulder still turns out to be quite large, because we have overall pipes, there is a solution and 2 meters in diameter, large enough. And of course, logistics is "eating up". Therefore, we try to use mechanisms and expand the number of production facilities.

Vladimir Putin: I want to go back to my question again. In other words, the tools of TORS, territories of advanced development, they generally satisfy you, right?

L. Gorilovsky: Yes, they are generally satisfactory and, of course, make it more attractive to start production in these territories.

Vladimir Putin: Thank you very much.

Maxim Nikolaevich.

Mikhail Vinogradov: Thank you so much for inviting me.

Hello!

We are a group of companies "Katyusha". We work in the IT sector and implement comprehensive solutions to create a Russian print ecosystem. We develop Russian software, localize printing equipment, and implement IT infrastructure services.

We did not use state subsidies or any special support measures or direct financial instruments.

Vladimir Putin: Haven't you used it?

Mikhail Vinogradov: We didn't use it. We work on our own money.

But there are three main support measures that really helped us a lot.

This is, firstly, creating demand for domestic software, which you have supported very much, and the Government pays a lot of attention to this. Thank you very much.

[Secondly,] this is support for Russian brands and young brands, as you have mentioned several times in your recent speeches. This helped us tremendously: we entered the market in 2018-2019, when the competition in our IT segment was really very acute, and we really took a serious risk, because it is always difficult to enter such a competitive market. The Ministry of Industry and Trade helped us a lot: they put us on the showcase of their technological solutions, drew the attention of large consumers to us, and thus helped us get promoted, gain momentum, and get started. Today, the market has changed: now there are really big opportunities, a window of opportunity for strong growth.

[Third,] long-term contracts with large consumers are the most useful support measure. Large consumers are now paying attention to Russian brands and Russian software, so we are very much in demand today. We are growing many times: our staff has doubled, and our model line has doubled. I will say frankly that today the support measures provided by the regional authorities, in particular the city of Moscow, and the best practices ‒ the service model, long-term contracts that the city is developing in every possible way-help us to invest in the long term, in the development and localization of equipment and enter new markets. So, in Moscow today we take the first place in outsourcing of printing infrastructure. More than 30 thousand devices are in our constant service in 5,5 thousand objects around the city.

In this case, these advanced practices really give us good leverage and confidence in the future, and we can invest in this rather resource-intensive, money-intensive industry. Moreover, the industry is so dynamic that today, when we lack certain competencies, we are sure to attract other Russian contractors ‒ this is the essence of our system. In other words, if some technological transformation is not yet mastered, we attract other enterprises and load them with orders here and now. An enterprise can produce some kind of radio-electronic module or some part of a product ‒ we load them with this work, do not wait until we master these technological changes.

I would also like to say that in this regard, the deepening of localization, the development of new equipment is a constant stream of long – term investments. This requires "long" money. Here I would like to suggest that the best practices that are currently available in Moscow should be extended to other million-plus cities: St. Petersburg, Nizhny Novgorod, Novosibirsk, and other cities, as well as to corporations with state participation ‒ large customers.

Vladimir Putin: All our recent efforts – not all of them, but to a large extent – in relation to your industry have been to encourage or directly force potential consumers of your products to use your product, and not a foreign one. I understand that in general it works.

What else needs to be done or what to adopt, what to spread, what to multiply?

Mikhail Vinogradov: You never get too much attention. You understand this very well, so you often talk about it. We constantly participate in all events held by the Ministry of Industry and Trade in Russia. We will participate abroad: we have already entered the markets of Belarus, Kazakhstan, and Uzbekistan. We are currently registering new brands with which we want to enter the markets of the Middle East and beyond. We will use the infrastructure that the Ministry of Industry and Trade creates to enter the markets of BRICS and other countries.

In no case do we want to focus only on the domestic market. We want to move forward and develop.

Vladimir Putin: That's right. What's bothering me in this regard? When there is no competition, you can slide down.

Mikhail Vinogradov: In our case, a number of companies have left the market, but many Asian companies remain in the Russian market. We compete with them directly. We must pay tribute to our customers: they look at what components are in the products, what are the Russian units, they are guided by this, study it and give preference to the domestic product, the supplier.

Software probably plays one of the decisive roles here, because all the world's major IT companies have always protected their high-margin services with their own equipment under their own brand, and they have protected their equipment with their own software. It is really very difficult to break this circle, so we started with software, then equipment, service and long-term offset contracts.

Vladimir Putin: You mentioned the good practice that has developed in Moscow and suggested extending it to other cities with a population of one million. What exactly did you have in mind?

Mikhail Vinogradov: For example, in Moscow there is a practice of full-cycle contracts and Service Model contracts: This is when, for example, printing or IT infrastructure maintenance is purchased as a service.

Dmitry Manturov: What is being bought is essentially a piece of paper that is being paid for. That is, the entity does not have fixed assets on its balance sheet, but they do have them: they take out a loan themselves, buy it all, but provide a service. In other words, you pay less money from the budget at the same time.

Mikhail Vinogradov: Banks are very active in lending to us because of this: they see receipts for a long period of time under a specific contract, and we don't need to apply for any subsidies or other subsidies.

Vladimir Putin: Let's implement this practice, as Maxim Nikolaevich suggested.

Dmitry Manturov: If you support us.

Vladimir Putin: I will definitely support you, but you just need to formalize it accordingly, as some kind of regulatory thing.

Dmitry Manturov: All right.

Mikhail Vinogradov: From your questions about the growth of orders and employment, I have already answered that we have grown many times here, and we have employed many employees who were left without work after some foreign manufacturers left the Russian market. Labor productivity has really increased a lot. By loading other businesses, we also increase their productivity.

Vladimir Putin: Of course. That's exactly what I was talking about.

If there is anything else in cooperation with Moscow, please also tell us. We will be happy to implement this further.

Mikhail Vinogradov: I just want to say big words of gratitude to the regional authorities and the city authorities, because they did it themselves. They started implementing it in 2015, and now it is very much strengthened and supported, as I understand it, at the federal level.

Vladimir Putin: I will definitely pass it on to Sergei Semyonovich [Sobyanin]. He left me at one-thirty last night. They hadn't spoken to him yet in the morning, so as not to act as in the well-known "parable": if only the day began and ended [with you]. (Laughter.) I'll call him and we'll talk.

Thank you.

Please, Svetlana Konstantinovna.

Sergey Matelo: Dear Vladimir Vladimirovich,

Thank you so much for the invitation and the opportunity to speak today.

I am the head of the commercial and industrial group of companies "Diarsi". This is a company that was created 20 years ago completely from scratch. This is an example of how science can be converted into big business.

We have two industrial enterprises located in the Stupinsky district of the Moscow Region. Equipped with the latest technology. We are constantly expanding. They also actively used regional subsidies.

We have high-tech production, more than 50 patents for formulas worldwide, and supply our products to more than 50 countries. Despite the current situation, the volume of exports fell slightly. We are developing new markets, which naturally makes us very happy.

Vladimir Putin: What is your main product?

S. Matelo: We produce cosmetic products and medical devices, synthesize substances for our own needs. Our main brand is R. O. C. S. toothpastes.

Many Russian companies have created beautiful brands over the past 15-20 years, and not just us. Most Russian consumers think that these are Western brands, but in fact they are Russian brands that belong to Russian beneficiaries, and they were created by Russian, Russian scientists, let's say. And we are one of those companies.

We are constantly working to increase labor productivity. This year, we are rebuilding production and will be able to double our capacity on the same premises, because we have been growing at a serious pace over the past two years. Last year, we grew by 25 percent, and this year, period to period, we have increased by 30 percent, and by the end of this year, we forecast that our turnover will reach 8 billion rubles. For the cosmetics industry, this is a fairly large enterprise.

I am also the president of the association of commodity producers "National Council for Perfumery, Cosmetics and Household Chemicals". The Association was established in August 2022 with the support of the Ministry of Industry and Trade. Unites large companies in the industry. These are only domestic companies. I must say that we, together with the Ministry of Industry and Trade, have developed, implemented and continue to implement quite a large number of support measures aimed at the development of the industry in this short period of time. If at the beginning of 2021 the share of Russian manufacturers in perfumery, cosmetics and household chemicals was somewhere around 20 percent, then by the end of 2022 it reached 32 percent. And now we see that the growth trend of Russian producers continues. The use of all the support measures that we are implementing will only contribute to this.

In April 2022, the Ministry of Industry and Trade, Denis Valentinovich, set the task of increasing the share of Russian manufacturers by two to three times. In two or three years, we think we will be able to cope with this task, because there are many good production sites in the country that are equipped with the latest technology. These sites produce not only Russian goods that were produced earlier, but also Western manufacturers were placed under contract. Therefore, the potential of the industry is very large, the volume is somewhere between 1200-1300 billion rubles with the potential for further increase.

We have used various support measures, including our company, other companies in the industry, and the Industrial Development Fund. All the tools are very necessary and useful, and they are working.

Vladimir Putin: Were they available to you?

S. Matelo: Yes, they are affordable, absolutely affordable.

Vladimir Putin: All right, tell me, how did you technologically go about getting this money?

S. Matelo: We applied to the Ministry of Industry and Trade and submitted an application.

Vladimir Putin: An electronic application form?

S. Matelo: In electronic form, yes. Then we have a contact from the Industrial Development Fund, if it is an Industrial Development Fund. We are provided with full assistance in obtaining funds if necessary. Therefore, we do not experience any difficulties or difficulties.

As we are growing at double-digit growth rates and face quite big challenges, we should not in any case miss the opportunities that we have today in the domestic market, but at the same time do not forget about exports.

For us and for other industries, of course, the key issue is the development of low-tonnage and medium-tonnage chemistry. We all have to import basic raw materials from other countries.

Vladimir Putin: We are currently developing both low-tonnage and medium-tonnage industries.

S. Matelo: There is an effective tool to support the development of low-tonnage and medium-tonnage chemistry. The fact is that among our enterprises, too, there are enterprises that either already do this – low-tonnage and medium-tonnage chemicals, or are going to do it.

D. Manturov: Substances.

S. Matelo: Yes, substances. We are deeply involved in this process, in this issue.

There is a good mechanism – subsidizing R & D costs, [Resolution] No. 1649, but the money, as far as we understand, is allocated for 2023-2024.

We have such a request and wish: to provide for the possibility of allocating money in the federal budget for the development of low-tonnage and medium-tonnage chemistry for 2025-2030, because we need, of course, to make a technological breakthrough.

If we add low-tonnage and medium-tonnage chemicals to this tool in accordance with resolution No. 208 of the federal program for the development of new materials production, then we can get a very serious cumulative effect on the economy as a whole in a fairly short period of time. A lot of companies want to produce ingredients within the country, especially high-tech and high-margin ones.

Vladimir Putin: Denis Valentinovich, please comment.

Dmitry Manturov: Mr President, we have three-year budgets, so what Svetlana Konstantinovna says…

Vladimir Putin: In my opinion, we have a program for the development of low-tonnage and medium-tonnage chemistry.

Dmitry Manturov: That's right.

Vladimir Putin: Give me more information on what's going on there. Svetlana Konstantinovna is right. If there can be such a cumulative effect in related industries, this should definitely be supported.

Dmitry Manturov: We will definitely take a look. But in terms of being limited to a three-year budget, you know the rules yourself… We will, of course, provide for…

Vladimir Putin: Yes, that's right. But if there is a program, then we will move it from one budget cycle to another, and then they will have confidence that it will continue, that this pace will continue. So?

S. Matelo: Yes. We calculated even in certain areas, for individual ingredients, the cumulative effect on the economy as a whole and for every ruble invested, the development of chemistry does not give plus 15 rubles, but this is 50, 100, 300 rubles for every ruble invested. Of course, the development of low-tonnage and medium-tonnage chemistry is the basis of our technological sovereignty. I think that many of those present here are interested in the development of the chemical industry.

Vladimir Putin:It is very important that there are domestic consumers who will continue to have such a positive impact on the entire industry.

S. Matelo: I am sure that we will be able to enter foreign markets with the ingredient base.

Dmitry Manturov: Mr President, we will work it out. Just see where else you need to tweak the program so that entrepreneurs are guaranteed…

Vladimir Putin: And then it will flow from cycle to budget cycle.

Dmitry Manturov: We'll work it out.

S. Matelo: I would like to express my gratitude to you, Mr Putin, and to you, Denis Valentinovich, for paying so much attention and offering such effective support programs. They always listen to our opinion. For our part, we also try not to let you down.

Vladimir Putin: Svetlana Konstantinovna drew attention to a very important point, at least, I heard it, I said this at the very beginning of our meeting, namely, she said: we are working to increase labor productivity and we plan to produce more products on the same areas.

S. Matelo: Yes.

Vladimir Putin: Increasing labor productivity is one of the main ways to deal with the problem of labor shortages.

Sergey Matelo: By the way, we are actively engaging science.

Vladimir Putin: Yes, and the shortage of labor will immediately look different.

S. Matelo: Yes.

Vladimir Putin: We won't even need to recruit people from neighboring countries who want to work for us, because we will manage with our own specialists. The only question is to improve their skills and use modern means of production, I mean artificial intelligence, modern good domestic software, and so on. Do I understand you?"

S. Matelo: Yes.

Vladimir Putin: Excellent.

S. Matelo: Thank you very much.

Vladimir Putin: But what you said about small and medium-scale chemistry, Denis Valentinovich, mark it, let's do it.

S. Matelo: Thank you very much.

Vladimir Putin: Thank you.

Please, Kirill Valeryevich.

Kirill Lipa: Mr President, good afternoon! Thank you for the invitation and the opportunity to speak.

I would like to start with 2019, when during the opening of the Moscow Central Diameter in Moscow, I presented you with our at that time advanced train, an electric train that we had developed. And at the same time, we made a slide with samples of advanced technology, on which you kindly left your resolution.

Vladimir Putin: Yes, indeed.

Konstantin Lipa: Here you can see a photo of equipment that did not exist at that time, and here you can see a photo of equipment that is now fully developed and mass-produced.

Vladimir Putin: Transmashholding, right?

K. Lipa: That's right.

Thanks to the universal support that we receive, and thanks to the efforts that our employees make, the company is really developing steadily.

This year is legendary for us. Many of our enterprises celebrate their anniversaries, in particular the Tver Carriage Building Plant. I think you know it well, you've been there many times. This year it celebrates 125 years of its existence. Bryansk plant – 150, Kolomna-160.

Of course, I won't report it in all 100 years, but over the past 20 years, we haven't released a single product that wasn't designed by us. Over all these years, only one locomotive has been produced in the amount of 80 units, despite the fact that we produce 900 of them annually – this is the only product that was not designed by our designers. Thanks to the fact that we have our own design base of 1,300 people, we were able to safely go through all the vicissitudes of the past and this year related to the refusal of deliveries.

We very quickly switched to bona fide suppliers and thanks to this, we ensured the fulfillment of all contracts and programs for the renewal of rolling stock for all our valued customers: Moscow, St. Petersburg, Russian Railways-that is, all the contracts that we signed were fully fulfilled.

As for the figures, you gave these figures today, I would just like to confirm them. We have revenue in 2023 by 2022-an increase of 34 percent. Our capacities are completely exhausted, and we are no longer physically able to increase them. We are currently discussing with Russian Railways a scenario for capacity expansion and further development, if such a demand is met.

In some segments, we have very strong growth. For metro cars, if measured in units, not in money, we have an increase of 71 percent, for trams-40, for trolleybuses-280. Therefore, again, these are not our miraculous miracles, but only a consequence of the urban transport development program implemented by the Government of the Russian Federation and the infrastructure and rolling stock renewal programs implemented by major Russian cities.

In terms of headcount. It has declined slightly in our country precisely for the simple reason that you mentioned-an increase in labor productivity. We have increased labor productivity… I would say that the output per employee this year is plus 25 percent compared to last year. Accordingly, in terms of wages, we will increase by 15 percent on average for the holding, and the average salary will exceed 80 thousand rubles. These are the indicators that, in my opinion, characterize the progressive development and investments that have been made.

We continue our active international activities. We are executing a contract for the supply of passenger cars to Egypt. We have already fully delivered our Russian part there – more than 600 railcars.

Vladimir Putin: Who do you do it with?

K. Lipa: With the Hungarians.

Vladimir Putin: They are working normally, and cooperation continues?

Konstantin Lipa: Cooperation continues. We were forced to withdraw from the capital of the Hungarian company, but nevertheless all the financial and technological interconnection is preserved. The Hungarian side has fully retained its funding, the Egyptian side has confirmed its readiness to work with us, and, moreover, the signing of a 12-year service contract worth more than $ 400 million has been agreed.

We are also continuing to work in other areas. Of course, these are all countries of the former Soviet Union. Major contracts have been signed in Azerbaijan and Belarus. Therefore, we are also continuing this work.

We won a large competition in India for 6.5 billion euros with commitments to produce and deliver rolling stock and provide its service over the next 35 years.

Vladimir Putin: Are you satisfied with the price and quality?

Konstantin Lipa: From the point of view of global, large – scale competition, we are still winning it, at least in the tenders in which we participate.

As for our prospects and the tools discussed today. We have made unprecedented decisions thanks to the support of Denis Valentinovich. A contract has been signed with the Industrial Development Fund, and the total amount of funding that we have agreed on is 35 billion rubles.

Dmitry Manturov: This is an exception. In general, we have limits…

Vladimir Putin: Not so much.

Dmitry Manturov: Less, yes. That's what we gave the bridge.

Vladimir Putin: Why bridge? Do you then attract people from other countries?

Konstantin Lipa: That's what Denis Valentinovich said…

Dmitry Manturov: The whole complex of the investment platform that you supported.

Vladimir Putin: Adding it there, right?

K. Lipa: No, it is being converted. In other words, we are replacing the money of the Industrial Development Fund with bank money that goes under the investment program.

Vladimir Putin: There is also good money there – 30 percent of the Central Bank rate plus 3 percent.

Dmitry Manturov: Minus 30 plus three percent.

Konstantin Lipa: This project is primarily aimed at developing the diesel cluster in Russia, because without diesel, as it turned out, everything else simply does not go anywhere and does not float.

Vladimir Putin: Very correct, of course. Omoryachivat need more. Our work is quite advanced in this regard.

Konstantin Lipa: Denis Valentinovich visited our company and saw the implementation of this project. Now we have provided the replacement of American diesel engines for BelAZ as soon as possible, and this is a key truck for our entire respected coal and other extractive industries.

Dmitry Manturov: For all extractive industries.

Vladimir Putin: Do you supply goods to Belarus?

K. Lipa: Yes. We're just getting started. You can't say that you are delivering yet.

Vladimir Putin: I see.

Konstantin Lipa: But the prototype is already undergoing its own tests.

Vladimir Putin: It suits our Belarusian partners, doesn't it?

K. Lipa: Yes, they came to us with this. It was even more their initiative. I turned to them three years ago, when we didn't reach an understanding with them, but now it's somehow easier.

We work not only with quarry equipment. This includes deliveries in the field of our, as it was correctly said, USC company. This is all that concerns the shipbuilding industry, including the military.

Then there are supplies to Rosatom and backup generation. Therefore, today this topic is, without any doubt, a strategic and multi-sectoral one.

And these are "Russian Railways", which buy more than 300 engines a year.

Therefore, the project is strategic in every sense. Of course, our task is to ensure the purchase, delivery and launch of the necessary equipment in the next two years.

Therefore, the Industrial Development Fund and integrated investment projects were the right decision. Thank you all for this. The terms of financing-from 10 to 15 years, which we have agreed - also allow us to significantly reduce the cost burden on our customers in the first place. The longer, respectively, the term, the less depreciation that is imposed on the cost of the product.

In conclusion, I would like to say that following all the events, we probably learn all sorts of important strategic lessons for ourselves. Such a lesson, I think, is the fact that the true gold and foreign exchange reserves of the Russian Federation are its professional, talented and enterprising people and national industry.

Vladimir Putin: Of course.

Konstantin Lipa: So the only thing I can ask for is to keep the pace that was set. Today, the railway transport industry – I can say this with confidence – is absolutely sovereign.

This does not mean that we produce everything – down to every bolt and nut, but it does mean that in every element of the rolling stock that we produce, we have our own engineering competencies, we understand it very well. And if necessary, if such a task is set and the money is allocated, we will be able to organize its production.

All that needs to be done, as it seems to me, is to maintain a long – term system of relationships with our customers – this is time.

Of course, pricing is also an important factor for us. It should take into account the dynamically changing current market situation related to the exchange rate, interest rates, and logistics. We will also only increase the volume of funding through the tools that we are discussing today.

Thank you very much.

Vladimir Putin: That's great. I congratulate you. A really good example of effective work.

Please, Vladimir Alexandrovich.

Vladimir Seredokho: Dear Vladimir Vladimirovich,

I represent Sredne-Nevsky Shipyard, Saint Petersburg. We are part of the United Shipbuilding Corporation.

Over the past ten years, with the help of the state program for the development of the defense industry, we and the Ministry of Industry and Trade have carried out a complete modernization of production.

Today we are a unique enterprise in terms of technology. We produce vessels from all the materials that exist in the world. These include shipbuilding steels, aluminum-magnesium alloys, low-magnetic steels, and composite polymer materials.

We produce vessels and ships with various technical specifications. This also applies to military shipbuilding. I will tell you briefly: we are currently supplying modern mine defense ships, and they are already operating at full capacity in the Pacific Ocean, the Black Sea Fleet, and the Baltic Fleet.

We provide jobs for all corvettes. In parallel, they began to deploy civilian products, and chose the direction of passenger transportation. Arctic Theme: We are currently building passenger ships for Krasnoyarsk, because-remember your expression about improving the quality of life ‒ we need to improve transport accessibility on the northern rivers.

At the same time, in St. Petersburg, we took up the project of updating the passenger fleet. What you saw, two catamarans, are already our first swallows. This is our theme, which we are moving forward.

Dmitry Manturov: I'm alone in Kronstadt.

(Shows the booklet) V. Seredokho:Yes, this is a completely new fleet, which will be in St. Petersburg in the next three or four years.

One catamaran is already operating on the Black Sea on the Gelendzhik – Sochi line, and two have reached the Medny Horseman-Ostrov Fortov line. We are now reaching the capacity of four or six ships a year. The order portfolio is formed until 2029.

Vladimir Putin: It is clearly not enough in the country. The deficit is huge.

V. Seredokho: Yes. But taking into account your message about labor productivity, we are also increasing military products by three times – not two, but three times-and civilian products by several times in the same areas. Today, there is a need for us to quickly build new capacities in the same territory, because there is a very large volume and demand.

Simultaneously with the development of all these technologies, we are diversifying our technologies, so we are also working with Rosatom: we have supplied them with 400 sets of composite wind turbines. All our tops - from the gondola and windscreen.

We brought a poloidal field coil with them to France. This is the famous ITER project.

The technology is simply being transformed in different directions: these civilian products concern not only shipbuilding, but also other areas, because the technology itself is included in these products.

We are currently developing new projects in order to fully translate them into mass production. The plant is automated – 950 [automated jobs]. We have now completed the Digital Shipyard project not only as a factory, but also as a life cycle. Therefore, we have already implemented what you say.

From the point of view of productivity, we now have all the resources to place both civilian and military products, and at the same time introduce them well into the series.

Vladimir Putin: How much does such a catamaran cost? Dear?

Vladimir Seredokho: No, it's twice as cheap as Meteor .

Vladimir Putin: Vladimir Aleksandrovich [Seredokho] knows what I'm implying. (Laughter) Because of course Meteors are very expensive.

Vladimir Seredokho: 300 million rubles, the same 30 knots, 200 passengers, comfortable.

Vladimir Putin: Is the speed the same?

V. Seredokho: Yes, the same speed.

Vladimir Putin: It can't be.

V. Seredokho: Yes. I'll even say more: here we put…

Dmitry Manturov: It turns out to be an air cavern.

Vladimir Putin: That is, planing.

V. Seredokho: No, in general, in principle, the type of catamaran: since it has a large platform…

Vladimir Putin: He lifts himself up.

V. Seredokho: Yes, it rises a little, the wetted surface is small, it goes well, but it has stability… This is a sea [kataraman], it is up to five points [sea waves], up to 2.5 meters wave. When the catamaran was driven to the Black Sea, I personally went on the first trip. From Gelendzhik…

Vladimir Putin: Advertising of our products has started. (Laughter.)

V. Seredokho: There must be quality for people. For whom else?

Vladimir Putin: Of course. What's the speed, you say?

V. Seredokho: 30 knots, almost 60 kilometers per hour.

Vladimir Putin: This is almost 60 kilometers, 55 kilometers per hour.

V. Seredokho: Yes.

Vladimir Putin: Is he currently working on this line?

Vladimir Seredokho: Yes, two of them are already working. And now we have four such places every year, plus recreational ones. Our equipment is already installed on walking routes, Yaroslavl diesels, but on high-speed ones it is still possible to use them.…

Vladimir Putin: What is its range?

V. Seredokho: The shoulder is almost 900 kilometers long.

Vladimir Putin: Wow, it's decent.

Dmitry Manturov: Because the engines are already economical.

Vladimir Seredokho: The most important thing is that we can increase the leverage, because we can supply additional tanks. We are not betting yet, because it is on a short line, but if you need a long line, then we will bet, we will do it. So it's like a platform.

Vladimir Putin: I understand.

V. Seredokho: In general, what did it do, and why did all this happen? Thank you for introducing leasing. Definitely a great topic ‒ leasing schemes, because it is clear that many people want to take, but not everyone has the money.

Vladimir Putin: Of course.

V. Seredokho: Due to the fact that there is a flow, people are turning around, the same private companies are ready to pay for leasing schemes. That's what you need…

Vladimir Putin: Develop it.

V. Seredokho: ... definitely develop it. Moreover, I have a request to extend this to factories in terms of purchasing equipment and building construction.

Vladimir Putin: And how to distribute it?

Vladimir Seredokho: You can also look at the capital market and leasing schemes.

Vladimir Putin: I've never heard of it.

Dmitry Manturov: There has not yet been such a precedent, Mr President.

Vladimir Seredokho: But there is a suggestion.

Dmitry Manturov: Vladimir Aleksandrovich is making such a suggestion. (Laughter.)

Vladimir Putin: That's right.

Dmitry Manturov: We are ready to work on it, Mr Putin. I won't answer the flight right now.

Vladimir Putin:That's right, because these leasing schemes absolutely need to be expanded one hundred percent.

V. Seredokho: Of course, because I have a small profit, and I can provide an annual payment. But I get it fast, I work hard. And so, it turns out, I save for a long time and lose in time and never catch up.

Dmitry Manturov: Mr President, you supported the leasing program for allocating funds from the National Welfare Fund for ships themselves.

Vladimir Putin: There is no decision on the National Welfare Fund yet, but in general, the National Welfare Fund can be used for this purpose.

Dmitry Manturov: He [V.Seredokho] is driving at this, that is, he was referring to the NWF leasing program.

Vladimir Putin: Yes, I understand. It will pay off in the long run.

V. Seredokho: Separately, if possible, for the equipment. There may be a short term, for example, up to 10 years, and for buildings - up to 20, this is capital, and this is normal. We will build everything quickly.

Vladimir Putin: This is not bad for the National Welfare Fund. It pays off.

V. Seredokho: The main thing is the deadline. We lose time all the time, and the most expensive thing is time. If you don't do something on time, it becomes much more expensive.

Dmitry Manturov: We will work on it, Mr President.

Vladimir Putin: Absolutely. Thank you. The offer is good.

V. Seredokho: One more point. I speak for the shipbuilding industry. Since we are mainly loaded with USC, 80 percent of the state defense order, we, of course, need to develop a citizen, and we can produce a citizen today at least with zero profit in order to be competitive. We have a request. According to the structure of our current profit generation, only three or four percent is very small. At least up to eight percent, so that we can have eight to ten percent. Then we won't fall into debt.

Vladimir Putin: Okay, I understand. We just need profit margins…

V. Seredokho: Honestly. You know how it turns out: you give all the time, and then you ask, and then you give again, and then you ask again.

Vladimir Putin: These are issues related to pricing in general.

V. Seredokho: Yes, it is on pricing to look carefully.

Vladimir Putin: Good. Thank you very much.

Please, Sergey Alexandrovich.

Sergey Serebryakov: Hello, Mr President!

Vladimir Putin: Good afternoon!

Sergey Serebryakov: Thank you so much for inviting me.

I represent the St. Petersburg Tractor Plant and the Kirovsky Zavod Group of Companies, and I am the director of the Kirovsky Zavod, the St. Petersburg Tractor Plant, and the Universalmash plant.

We work primarily in the production of agricultural machinery. These are complex, heavy, energy-rich tractors.

Vladimir Putin: Kirovtsy .

S. Serebryakov: "Kirovtsy".

We work in a number of areas of road construction. These are equipment for mining and processing plants, the oil and gas sector, and road construction. We also solve a whole range of tasks in the defense industry.

The plant turned 222 years old this year. Next year we will celebrate the 100th anniversary of the beginning of tractor construction in Russia. In 1924, the production of tractors in Russia was developed just at our enterprise, so we will celebrate this anniversary with dignity.

Over the past ten years, the company has increased production by almost 13 times, and in five years-by 190 percent. We have created a whole range of equipment and optional solutions. The tractor is now used for all the necessary mining and technological operations in agriculture.

The main criticism that has always been used to us is quality. Today we are talking about the fact that the agricultural machinery industry as a whole has really reached the world level. Not empty words. When the special military operation began, foreign companies ran away from the market, we did not barter, we took and raised the warranty period to three years for all the main components and assemblies of the tractor, in order to show the industry our responsibility to them in the field of quality of manufactured equipment and its level, which is very important from our point of view.

Over the years, we have been actively working with the Ministry of Industry and a number of our companies to create a component production facility. In Russia, we initiated the production of heavy tires and rims in the Altai Territory. We have restored and organized together with KAMAZ the production of heavy diesel engines, in fact preserving this enterprise, a whole range of electrical equipment. Therefore, at the beginning of the unprecedented sanctions pressure, the plant did not stand for a single minute. I even turned to the team, and we increased the volume of equipment production by 30 percent last year.

Vladimir Putin: By 30 percent?

Sergey Serebryakov: Well, yes, model-by-model, some models by 15 percent, somewhere around 40, depending on the capacity.

Vladimir Putin: On average.

Sergey Serebryakov: We have increased it.

And the plant is absolutely independent today, everything that we do is Russian-Belarusian components, with the exception of the tractor's hydraulic system, which, unfortunately, is not produced in Russia or Belarus, these are axial piston pumps and hydraulic distributors that are needed for aggregating with seed complexes. We take it in China today. We are looking for partners so that this issue can also be localized in Russia.

What would I like to highlight? Despite the achievements that we have made in the tractor industry in Russia, we have some white spots, that is, a range of equipment that we do not produce, but our Belarusian colleagues do. On my initiative, the Russian-Belarusian Association of agricultural machine builders "Progress" was established in our Union State. We share the same component suppliers. We created it as a new type of association, not as an association that will lobby for our interests, but with two goals: the unification of commodity distribution networks and the organization of technological cooperation with each other. This led to the fact that we were not affected in any way by the introduction of any restrictions on deliveries to Russia.

We can see that Belarusian enterprises are comparable to Chinese enterprises in terms of recognition of technological operations in Russia. I need to link the Minsk or Chinese engine – from the point of view of the point system, [they] have the same value. I think we should pay attention to this.

Vladimir Putin: I don't really understand what you're talking about.

Sergey Serebryakov: We have a government decree No. 719, which defines the requirements for recognizing oneself as a national.

Belarusian producers are treated equally, as, for example, Chinese or Asian producers of some other kind, that is, their technological operations are not counted in points.

Vladimir Putin:Are they not counted as domestic?

Sergey Serebryakov: Yes. I think this requires a very serious discussion.

Vladimir Putin: Do you think that Belarusian products can be counted as domestic?

Sergey Serebryakov:I think so. We have a very serious cooperation.

Vladimir Putin: Alexander Grigoryevich [Lukashenko] will be happy.

Dmitry Manturov: It will be fair.

Vladimir Putin: Fair enough?

Dmitry Manturov: Yes.

Vladimir Putin: Then why haven't we done it yet?

Dmitry Manturov: Because Sergey Alexandrovich [Serebryakov] doesn't know the latest decisions yet.

When I met with [Deputy Prime Minister of the Republic of Belarus] Parkhomchik Pyotr Aleksandrovich at Innoprom ,we finally agreed.

Vladimir Putin: It must be done.

Sergey Serebryakov: Yes, it will help Russian industry. For example, we take the Minsk engine, we have castings – Nizhny Novgorod, fuel equipment-Noginsk, I make crankshafts, they make pistons there, collect them…

Vladimir Putin: Our cooperation is very deep.

Sergey Serebryakov: Of course, it's deep, but this engine, if I use it, it doesn't count in any way, it's not quite true.

Vladimir Putin: I agree, Sergey Alexandrovich. By the way, our Belarusian colleagues keep saying that, in fact, this is the development of a single complex.

Sergey Serebryakov: This year, of course, we have slowed down the pace of development, Denis Valentinovich noted, this is due to the price situation for grain. In general, grain prices sharply affect the demand for agricultural machinery, it has always been so, this is a certain pattern. But I must say that there was a reaction. First, the Ministry of Agriculture made a decision to stabilize prices on the grain market.

Secondly, the Ministry of Industry has introduced a subsidy, Rosagroleasing is actively involved, and I think that we will improve the situation in the second half of the year. We probably won't have double-digit production growth over the next ten years, as I am used to, but I think that we will show an increase in production volumes of around five to eight percent, and even this year, despite this.

This year we launched new models, a very important milestone in the Russian tractor industry. These are models with precision farming systems of domestic production, navigation systems of domestic production, telemetry of domestic production and autopilot. This dramatically changes the productivity of labor in agriculture, changes the requirements for the qualification of machine operators and improves the quality of land cultivation and careful attitude to the land, which is also a very important issue, by reducing the slip rate and U-turn parameters in the field. So the plant is actively developing.

From the point of view of state support measures, we are actively using them, we have implemented about five programs with the Industrial Development Fund, in general, with the help of the Industrial Development Fund in 2017.I want to thank Denis Valentinovich, we just saved the plant. We had a big fire, and we just rose up from the ashes and recreated it in a new technological way with good performance indicators, manufacturing accuracy and created an automatic gearbox. There are no levers or pedals on the tractor, everything has been done in an automatic machine for more than five years.

But at the same time, there are certain difficulties. From my point of view, the program – especially the components that exist – needs to be expanded, because we have heavy components, aggregates that require a longer investment cycle, for example hydraulic machines. There, R & D alone will take about five to seven years.

Second. We have an imbalance of federal and regional efforts in the field of agricultural machinery. In other words, a lot of regions actively help their agricultural producers purchase equipment, while the federal center makes an effort to comply with the 719th decree and the criteria of the 719th Government decree on subsidies, while the regions do not look at this situation and often subsidize foreign-made equipment with rather large percentages, up to 30 percent.

There were a lot of conversations and suggestions about this, but the issue is not being resolved. Currently, Chinese machinery is actively subsidized, which in middle-class tractors showed a fivefold increase in the volume of deliveries last year, which, by the way, hit Belarusian manufacturers. We felt this from the point of view of problems with the production of automotive components in Belarus – they slowed down, stopped for some time.

I think it is necessary to synchronize federal and regional efforts in this regard, so that there are the same requirements. That is, if the federal center says that equipment should be subsidized, which meets these criteria, then the regions should also comply with this, and look at it. This would be the right thing to do and would unite the budgets to support agricultural producers. We would be able to more effectively meet the challenges of increasing production and development.

There is something to show at the factory, you have not been here for a long time. I invite you to the enterprise.

Vladimir Putin: I knew the former manager well, who had already left.

Sergey Serebryakov: The company is very modern.

Vladimir Putin: I know that at one time it was in a difficult situation.

Sergey Serebryakov: I received him in a difficult situation.

Vladimir Putin: I know. Thanks in large part to your efforts and a renewed team, the factory is on the rise.

Sergey Serebryakov: The average age at the enterprise is 33 years, the salary is more than 100 thousand rubles. There are two vocational schools on the territory of the plant.

Now, together with the Ministry of Education, we are building a large training center right inside the enterprise under the Professionalism program. This is synchronized with the project of the Industrial Development Fund.

I believe that the most important achievement is the re – creation of the design and technology school. With the help of such an intelligent core, we will be able to solve fairly complex tasks in an operational manner. As an example, there was a problem that I saw-I myself graduated from a military school-how we build defenses [, defensive structures]. We have already developed a vehicle for rapid construction and trenching, and we will send it to the engineering forces around October.

Intellectual potential can quickly solve such problems. There is something to see, what experience we have, and we will tell you how we solved this issue and how we got such a young team that is really capable of solving very complex industrial problems.

Thank you.

Vladimir Putin: Thank you.

No matter what you start with, you always get a Kalashnikov assault rifle. (Laughter) We went back to the defense industry. There's no getting away from it, I understand.

Sergey Serebryakov: We were not given the task, it was on our own initiative.

Vladimir Putin: I understand.

I would like to return to this point: the company was indeed in a difficult situation some time ago, and in recent years it has been transformed both technologically and in terms of improving its finances, and this, of course, has had an effect on the development of the company itself and on the future.

You paid attention to some things correctly.

Dmitry Manturov: I fixed everything.

Vladimir Putin: Please, Maxim Yuryevich.

Mikhail Sokolov: Thank you.

Good afternoon, dear Vladimir Vladimirovich!

As you know, the Volga Automobile Plant is not only the largest industrial site in our country, but also the most highly localized domestic car manufacturer. The plant and its subsidiaries in Izhevsk, Moscow, and now St. Petersburg, not to mention Togliatti, employ more than 40 thousand people. A whole army of our suppliers depends on the stable operation of AvtoVAZ. Suppliers of the first and second level – more than 1,650 enterprises that employ more than half a million people, not to mention dealerships, logistics centers throughout the country, stores in every city, not even in the subject. Thus, AvtoVAZ, of course, is the flagship, the core of a large-scale system of the entire Russian automotive industry.

Of course, last year was extremely difficult. Foreign manufacturers of components have cut us off from their deliveries – not only sanctioned ones, but also quite harmless ones, and the logistics chains that were created for decades before have been disrupted. As a result, our production lines were stopped in the spring of 2022. But with the support of the Government, our Ministry [of Industry and Trade], and the governor of the Samara Region, we were able to resume production of our flagship models as soon as possible, not only at the industrial site in Tolyatti, but also at our partner project – at the plant in the Chechen Republic.

I would like to note, Mr President, that thanks to the execution of your instructions, which you gave at the previous St. Petersburg Economic Forum, it was possible not only to stabilize the situation in the automotive industry, but also to reach the development trajectory. Thus, a strategy with a focus on achieving technological sovereignty, a strategy for the development of the automotive industry was approved, and a decision was made to finance the Industrial Development Fund, which AvtoVAZ and its suppliers have already managed to use. As well as other measures that were focused on, such as state support measures, specifically on those enterprises that have achieved actual localization. Thanks to the well-coordinated work of our entire team, the AVTOVAZ team, last year we produced 220 thousand cars, although the shareholders who left us predicted a complete shutdown of the plant until the summer of this year.

As for the plans for this year, we will almost double production and plan to produce more than 400 thousand cars. In the first six months, we have already produced 135 thousand cars, which is 70 percent more than in the same period. At the same time, we are actively occupying the vacant niche: today we are already steadily selling, more than 40 percent of the market is made up of Lada brand products. This is almost twice as much as in previous years.

And of course, we think about our development, about our new products. In March of this year, Togliatti launched the production of our flagship Vesta car, which I would say is in high demand right now. In the near future, we plan to launch four more new products within two years.

First, it is an electric car based on Largus – E-Largus. We plan to launch it in Izhevsk, and literally next week we will start cooking the bodywork for this product, for the experimental batch. This is a Lada Aura business class sedan, which was presented on the sidelines of the recent St. Petersburg Economic Forum, at the Forum of African countries. And a new mass-produced passenger car, one of our most budget cars, which will be a Lada Iskra car, we will launch it next year. And of course, it would be a great honor for us, Mr Putin, if you experienced it as you did Lada Kalina in your time. Also in two years - this is a dynamic urban crossover of the C-class on our own platform "Vesta".

What is very important: even in a difficult last year, we found the funds to invest in the development of our capacities, in the speed and productivity of our conveyors and made significant progress, increasing their productivity by about 10 and even more, by 15 percent, so as to give an appropriate response to the need to gain competitive market positions and an increase in production volumes.

As for our team, we not only did not reduce anyone, but even started recruiting staff, raised wages, which were not indexed by previous shareholders for many years. In general, it has increased by almost 30 percent, and for workers directly on the assembly line, working specialties – by all 40. We understand that it is pointless to" suck out " its [staff] from surrounding enterprises, including small and medium-sized businesses, because they also work mainly for us, for AvtoVAZ, so we work with the regions. Next week, a party of young people from the Republic of Ingushetia is coming to us, and we are working with the countries of the near and far abroad. But most importantly, we have restored the target reception. Now, in September, according to our joint programs with the Ministry of Education of the Samara Region, more than 500 young people will be accepted into the secondary vocational education system, and in a year they will come to our factory.

As for the collective agreement and the fulfillment of social obligations, it is considered one of the best, reference in the industry. Even last year, we allocated more than 1.5 billion rubles for social programs, and this year this figure will be twice as high – we will allocate another billion rubles for the restoration and reconstruction of social infrastructure and sports facilities, realizing that, unfortunately, this has not been done for a long time.

In conclusion: how could the state help us, Mr Putin?

First of all, I would like to thank the Government and our Ministry for taking timely decisions on the indexation of the recycling fee. This will provide a source for us, the entire industry, for further development.

Vladimir Putin: This is the result of a general discussion. (Laughter.)

Mikhail Sokolov: Thank you very much for completing it successfully.

Secondly, I would like to note the importance of measures to further stimulate demand. I mean, of course, not money, that would be trivial. For example, next year, as I have already said, we want to launch a new product – Lada Aura. Denis Valentinovich, Anton Germanovich Siluanov, Konstantin Anatolyevich Chuichenko, and even Valentina Ivanovna [Matvienko] have already tried this car. This is such a "little sister", this is not "Aurus", of course, but his younger pretty and decent sister.

Of course, the main buyers of this model are large corporations, state and municipal structures, and taxi companies. Today we have norms in the legislation that prohibit the direct purchase of foreign or low-localized cars. But we all, as always, live creatively and have not bought such cars for a long time. But as for leasing, car rental, and ordering transportation services, unfortunately, this is not regulated in any way. And it would be a certain protection of the market if the legislation also covered these areas, in order to use exclusively – for those who work for the state-highly localized domestic cars.

The same applies to other levers, such as taxi companies. The state issues licenses at the level of a constituent entity of the Russian Federation, but at the same time it does not direct taxi companies to buy domestic equipment, and here, when issuing this license, such a norm could be contained. Such a draft law has been prepared by the Federation Council, submitted for consideration today, and we would ask, of course, to support it, so that this policy is at the federal level.

Vladimir Putin: Denis Valentinovich knows, ministries, departments, Department of Affairs [We asked the President to continue purchasing cars and focus on foreign-made cars, to continue this practice. I said that this should be absolutely excluded and all officials of the country should drive domestic cars. Somewhere it will be more modest than before – nothing terrible, on the contrary, even good. All our wonderful officials should understand that we need to strive for the development of domestic brands, domestic cars and other domestic products. And improving the quality of life should be aimed primarily at this.

Of course, imports are also needed, of course, we cannot and should not refuse to import as a whole, but some basic things should be focused on domestic producers if we consume them ourselves.

Therefore, these support measures that you have just mentioned, they have so far been, in fact, in the form of direct financial support, and we have done a lot of this. Now we are not talking about direct purchases, but such indirect support measures that will really help AVTOVAZ, they are, of course, timely and in demand, and we should use them. So I'll say it carefully now, but we'll support it, of course.

Mikhail Sokolov: Thank you for your support.

Vladimir Putin: Of course.

Please, Mikhail Valeryevich.

Maria Tymoshenko: Dear Mr President,

I am very happy to be here, and I am very grateful for the invitation. I represent Rusklimat Commercial and industrial Holding, founder and Chairman of the Board of Directors Mikhail Timoshenko.

About our company: we are 27 years old, specializing in internal engineering climate systems, everything related to a comfortable environment, human nutrition and air conditioning, ventilation, heating, water treatment, water heating, 350 thousand items, an active assortment matrix.

To date, there are 10 factories operating, the location is the Vladimir region, the city of Kirzhach, the Rusklimat IXEL technopark, there are nine enterprises. And to date, four are being built on the territory of the special economic zone "Vladimir", in the moment. There is also another technopark in Udmurtia, the city of Sarapul, where four more new plants are being built.

Vladimir Putin: It's decent. How many employees do you have?

Mikhail Timoshenko: To date, about seven thousand. We are growing year-on-year on a weighted average plus 30 percent.

This year, I think, we will exceed the revenue target of 150 billion rubles. From the point of view of wages, the reference for 2023 is an increase of plus 30 percent.

All enterprises are innovative, developing very actively, and we are improving labor productivity. The Ministry of Industry and Trade is very helpful, and we use absolutely all the tools of both the Federal Reserve Fund and Government resolutions on concessional lending and support for small and medium-sized businesses – everything is involved. Great help, easy, fast, I would say, all instances work reliably.

From the point of view of the agenda that we promote in our locations, these are ECG – ecology, personnel, and the state. We are actively working with local administrations, building housing, starting to build housing for employees, and improving infrastructure. The administrations of the Vladimir Region and Udmurtia, respectively, help us. They help us very well, and we work together. Big plans. We are also developing in this direction.

We are also engaged in the development of sports, building a martial arts school, a gym, actively participating in regional projects, helping to build a sports and recreation complex of game sports – in general, we are engaged in increasing the social attractiveness of our not very large territories, due to rapid growth…

Vladimir Putin: It's great that you work in small towns and cities.

Maria Tymoshenko: Yes, the location is the city of Kirzhach, which is 27,000 people. We only need three thousand more people for the enterprise of our Vladimir Technopark. Therefore, even though we are improving productivity, there is a catastrophic shortage of labor resources.

We use all the tools: relocation and work with secondary technical institutions. I can't say that everything is going well so far, but we are working in this direction. We see a great potential for vertical integration of secondary technical educational institutions into industrial enterprises, which are now developing so rapidly not only on our territory, but also on the territory of the entire Russian Federation.

We have a lot to work on and make sure that the largest number of graduates stay in our territories, and do not go to big cities to earn money. Now you can earn money at our enterprises, get very liquid, interesting professions.

Now we are actually engaged in online education of employees at enterprises and promote professions.

I would like to take this opportunity to invite you to the opening of our new 40-thousandth building. There will be four new enterprises that are already registered as residents of the special economic zone, which was created in December in six months with the support of Denis Valentinovich and the Ministry of Industry and Trade, as well as the administration of the Vladimir region. In December, we received a decree, and to date, four enterprises have already been registered as residents of the special economic zone, and this year they will already operate and produce products. Apparently, this is the fastest start of such a format and scale, a kind of record in the Russian Federation: so that in a little more than six months, the SEZ was created and the first four residents were created. Everything is ready. Enterprises are innovative, interesting, and diverse. This is the production of heat exchangers for air conditioning equipment, this is the production of components for radiators. We are the world's largest manufacturers of heating radiators.

Vladimir Putin: In the world?

Maria Tymoshenko: In the world, yes, and many other products, by the way. I won't list them, as the list is large. This is all the climate industry.

The second enterprise is components for heating radiators, a modular prefabricated housing construction plant. Also a resident of the special economic zone. We have already assembled pilot products and are demonstrating them to potential customers. An innovative and very interesting project. We plan to multiply it in the future for all regions of the Russian Federation. We are located in absolutely every city of the Russian Federation and not only, the geography of sales of the holding is 50 countries of the world.

And a factory for the production of indoor convectors. We have already developed and produce our own products. At the new site, we will have a fundamentally different production volume.

From the point of view of some wishes. We are developing rapidly and want to maintain this pace. As one of the tools that we see that it can help developing businesses move faster, it is industrial mortgages.

What are the disadvantages now? Small volume – 500 million. We are currently building buildings – about 100 thousand square meters-and this money is not enough to build even five or seven thousand. That is, 20 thousand square meters is currently about 1.5 billion rubles. The proposal is to raise this figure to 1.5 billion and make it a little "longer" – not seven, but ten [years].

Vladimir Putin: About 10-15 years.

Dmitry Manturov: I am now seven years old.

Maria Tymoshenko: At least ten. Then this tool will be available for medium-sized businesses…

Vladimir Putin: Really helpful.

Mikhail Timoshenko: Really helpful. We would like to use this tool for our new projects – the only one that is not used in our holding - but there are not enough funds. He's like this-and not there, and not here, it turns out. As a weighted average, so to speak, this plant starts from 20 thousand square meters.

There is such a proposal, if there is a solution, there will be a significant leap in this direction of development of the promipoteka.

Vladimir Putin: In other words, do you think that this will actually work?

Maria Tymoshenko: Of course, I am absolutely sure.

Vladimir Putin: Seven years and 500 million is the result of a compromise, a struggle…

Dmitry Manturov: With the Ministry of Finance.

Vladimir Putin: ... the Ministry of Industry and the Ministry of Finance.

Maria Tymoshenko: One and a half and ten are essential and powerful tools for its development. Now we are sorely lacking space for development. It's very expensive to build, so we'd better spend this money on equipment, and the mortgage will help create new buildings for new factories.

Thank you.

Vladimir Putin: Good. Mikhail Valeryevich, I heard you.

Dmitry Manturov:This year we will definitely not even have time to work out the standards in a high-quality way. Next year, we will see how much this will increase the budget burden, and we will work with the Ministry of Finance and try to find a solution.

Vladimir Putin:It is important what you said and what I heard.

Dmitry Manturov: Thank you.

Vladimir Putin: Thank you.

Please, Nazim Tofik Oglu.

N. Efendiev: Dear Vladimir Vladimirovich, Denis Valentinovich! Dear colleagues!

Metalloinvest is the largest Russian producer of iron ore raw materials. Our foundation is our two mining and processing plants. Lebedinsky GOK, which is the world's only and largest producer of commercial hot briquetted iron, is the only one in the world.

And in the Belgorod region – Mikhailovsky GOK. In the Kursk region, there is a unique and unique Oskol Electrometallurgical plant in Russia, which produces more than 3.5 million tons of liquid steel by direct reduction of iron.

Direct iron recovery is our main feature of what is called Metalloinvest.

The holding employs 38,000 people. When you invited us to a meeting of metallurgists on April 18 last year, I ended my report with a rather banal phrase that many people might have thought was too stupid and optimistic. I said, " Mr President, everything will be fine." And to many, my optimism might have seemed slightly exaggerated.

But before I said that, I listened carefully to Denis Valentinovich's report. I remember his theses very well. In my opinion, his second thesis was the need for a rhythmic increase in domestic demand through infrastructure projects, construction projects, ports, and railways. Denis Valentinovich said that this is what we will focus on.

It really worked. Today I can tell you that if in the last half of the year our domestic market was 43 percent, now it is 63 percent in monetary terms. And if we take iron ore raw materials, today we leave almost 90 percent of pellets and concentrates in the country. Moreover, we are fully loaded, just as our partners – metallurgists-are also fully loaded.

Of course, it is impossible to compare today with the price situation in 2021 – this was probably a record year for everyone in the entire history of the world metallurgy industry, not only in Russia. Therefore, comparing these figures, it makes sense to understand 2022 by 2023, but we see today that revenue of 190 billion rubles for the first six months is practically at the level of last year. Pre-tax profit is 94 billion rubles, we have already paid 29 billion rubles in taxes and excise taxes, plus insurance premiums of 6 billion rubles, plus 3 billion rubles of personal income tax, plus this stable position in our market allows us to raise wages by 10 percent every year for the third year in a row. We have not sequestered our program of social and economic partnership with the regions, which annually adds 3 billion rubles to the taxes that we paid, of course, both regional and federal taxes. We allocate money for social projects, this is not business, this is education, culture, sports, and the development of the urban environment.

We have applied to the Ministry of Industry and Trade, and I will now turn to the substantive part of my report. Yes, we are fully loaded today, and we have a plan to increase production of both concentrate and pellets. Yes, today we are focused on the domestic market, cut off from our traditional iron ore markets, which were Eastern Europe and Western Europe. But we have huge prospects for the so-called friendly countries, markets where, on the one hand, there are huge reserves of natural gas, but there is not enough iron ore raw materials. Why? Because all these countries are planning to develop their own metallurgy on the basis of direct recovery. Algeria, for example. And together with Uralmashzavod, we have designed, and the project is almost ready, the construction of a new roasting machine, that is, a machine for the production of five million tons of pellets for direct recovery.

Pellets were not included in the list of export products that can pass the CPPC [corporate competitiveness Program] procedure. We turned to the Ministry of Industry and Trade and said: comrades, domestic technology, domestic equipment, the export market, and a promising one at that. We fully received feedback and support. Currently, the necessary changes to the regulations are being prepared, but there are nuances.

Vladimir Putin: Do I need to add some money?

N. Efendiev: The first nuance is time and money. We have a dimension: time and money. The CPPC program ends in 2026, and we will start construction at best at the beginning of next year, and we will start working until 2028.

Vladimir Putin: We will extend these programs.

N. Efendiev: It should be extended at least until 2030.

And the second question is money. After all, the budget should have this money, then we will feel its effect.

For our part, of course, we guarantee you sales of these products, because we know these markets. And they know us there, and they are waiting for us there.

Thank you so much for your understanding.

Vladimir Putin: I understood. We think exactly the same here, and this should be supported. We understand that we need time, deadlines, expand the time frame and add money to it-this is the main thing, this is the main thing. Everyone in the Government understands this.

Denis Valentinovich, what can you say in conclusion?

Dmitry Manturov: Vladimir Vladimirovich, thank you very much for this opportunity, it was completely unexpected: I recorded alone, and the result was this.

Vladimir Putin: Yes, it was. Denis Valentinovich asked for a meeting. We agreed with him, and just yesterday I said to him: let's have a wider meeting. I hope it was useful for you as well. And for me, too, it was very important for me to listen to the assessment of what is happening, from people who, with their talent, intelligence, experience, using all these things, achieve the result that we have today, and the result is there.

We also see the problematic issues that we need to work on, and thank you for suggesting some things that we need to focus on, add something on time, and use the tools we are talking about in addition. We will correct all this. This is all in the works.

Thank you very much, because it was also extremely important for me. When we just lock ourselves in offices and argue with each other, it is important to feel, and for me it is important to feel, how it responds, what results it can have in real life, in real practice, in real production.

I want to thank you for everything that has been done so far in difficult conditions, as in such cases they say, in your person, all your colleagues who organize production, all your labor collectives, and express my hope that we will not only maintain the momentum we have gained, but also increase it. And the Government, together with the production organizers and your teams, will do everything possible to support your efforts.

Thank you again. Good luck.

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Over the last ten years, Russia has transformed itself, although it still has lots of work to do. In key strategic areas, it’s in better condition than the Outlaw US Empire, and overall has much better commercial prospects. If the 2022 sanctions were implemented in 2014, Russia’s condition today would likely be worse, although we’ll never know. Putin’s call for overall sovereignty in 2018 and reiterated yearly has mostly been heeded by Russians. As you read, markets closed just reopened elsewhere and those abandoning their businesses within Russia have seen them reopened and rebranded very successfully. Yes, you read that there’s some protectionist policy within Russia’s economy that’s applied to a vital industry, but that’s an exception. And there was a great deal that wasn’t discussed because the entire economy wasn’t the topic. Usually, such discussions are by economic sector. Overall, I was very impressed by the information presented. The demographic problem of not having enough people to employ will be with Russia for at least another generation, which is why the emphasis on automation, digitization, and AI business applications. If you’re young, Russia clearly presents many opportunities.

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