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Eugene Gerden

Expert Opinion

24th October 2016, Moscow

Russian technical textiles industry to grow in 2017

The Russian technical textiles industry is steadily growing, thanks to the ongoing recovery of the national economy from the effects of the crisis and the prospects of lifting of the Western sanctions possibly by the end of the year, according to a recent report by the Russian Ministry of Industry and Trade.

Despite the crisis, the technical textiles segment remains one of the most promising in the Russian light industry in terms of its future prospects. Unlike textiles for non-technical applications, which currently remain in stagnation, the Russian technical textiles industry is expected to grow by 7% in value terms this year.

Viktor Evtukhov, Russia's deputy minister of Industry and Trade, who is responsible for the development of technical textiles in the Russian government. © Eugene Gerden

The ongoing industry growth is also reflected by the recently announced investment projects.

For example, a new large-scale facility for the production of technical fabrics has been recently commissioned in the Kursk region, in Central Russia. The project is implemented by Rabeks Textiles, one of Russia’s largest technical textile producers.

It is reported that the new plant was commissioned on the basis of the local Kurskrezinotekhnika enterprise and is expected to be one of Russia’s largest technical textile facilities, which is located in the European part of the country.

Under the terms of the project, the volume of production at the enterprise at the initial stage will be about 400,000 sq. m. of technical fabrics per month, with a possibility of a significant increase in due course.

As part of the company’s strategy, the production volume will reach 900,000 sq. m. during the second stage of the project, which is scheduled to launch in the middle of 2017.

According to some sources close to Rabeks, the volume of investments in the project may reach US$ 30 million at the initial stage.

According to Victor Evtukhov, Russia’s Deputy Minister of Industry and Trade, the launch of the Kursk plant is just the beginning, and during the next several years the number of facilities in Russia, specialising in the production of technical textiles and nonwovens, should be increasing significantly.

Evtukhov also added that the Russian government plans to focus on the complex development of the national technical textiles industry, considering it as one of the most promising segments of the country’s light industry until 2020.  

That means that Russia plans to establish production of the entire technological chain of synthetic materials, from chemical fibres and threads to technical textiles, for further use in different consumer and industrial applications.

In the meantime, according to analysts of the Russian Association of Textile and Light Industry Producers, the demand for synthetic fabrics and technical textiles in Russia will continue to grow in the coming years and will be significantly higher than in other segments of the domestic light industry.  

Alabuga special economic zone in Tatarstan, an economic zone, which is expected to become a centre of the local technical textiles industry in the coming years. © Eugene Gerden

As part of the government’s plan, the Tatarstan Republic, one of Russia’s most economically developed regions, will be the centre of further development of the national technical textiles and nonwovens industry of Russia for the coming years. That will also be due to the rich petrochemical base of the region, which should create conditions for the establishment of new industry’s enterprises within the region in the coming years.

It is also planned that further growth of the industry will be achieved through the increase of the state support. At present, the annual volume of state support of the Russian technical textiles industry is estimated at RUB 2 billion (US$ 40 million) and there is a possibility that it could be increased in the coming years. The majority of these funds are allocated for the repayment of interest rates on loans that are mainly attracted by producers for the purchase of raw materials and other products.

At the same time, despite numerous calls of producers for the increase of state support, the Russian government plans to provide further support only on the basis of the industry’s performance and its further results. This means that the quality of domestic products should significantly grow in the coming years, with the aim to compete with Western imports.

Prior to 2000s, the Russian technical textiles and nonwovens market was mostly dominated by imports, which were mostly supplied from the EU and the US, however, in recent years, the situation has changed significantly, whereas the quality of the local production has become almost comparable to the its Western analogues. This has resulted in a significant reduction of imports and the increase of the share of domestic products.

In the case of good performance, the Russian government may consider the possibility of the provision of additional benefits for the industry, in accordance with the numerous calls of producers.

Among the possible support measures is reducing of the rate of mandatory payments to the pension and health funds, (which are annually paid by producers), as well as the abolishment of part of the existing taxes.

According to producers, high taxes currently remain one of the major obstacles, which restrict further development of the industry and complicate its further growth.

In addition, further development of the industry also depends on the activities in the major consuming industries, and in particular, construction and defence industries, which in recent years have become the major applications of technical textiles in Russia.

According to analysts, in contrast to previous years, when the majority of technical textiles were supplied for the needs of local clothing industry, at present, most of the industry’s production is supplied to related industries, where the demand is growing at even higher rates. The Russian military and industrial sectors probably currently remain the biggest application markets of technical textiles in the country, and there is a possibility that the volumes of consumption will continue to grow in the coming years, due to ongoing militarisation.  

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