The report highlights the following topics:
After an introduction the third chapter outlines the market, including local production and import: In 2021 the market volume for measurement & control devices automation in Russia accounted for 3.12 billion Euro. On the one hand there were factors for growth as the industry stimulation programs of the Russian government, the aim of the key customer segments to modernize their business and their financial ability to invest. On the other hand, restrictive factors for a further development of the sector among them the modest foreign demand for the low-tech Russian products, low workforce productivity, sectorial sanctions and a lack in financing curbed the development.
The import share was very high and made up about half of the market, preliminary in the higher price segment, where western suppliers were present. In the import 2021 China ranked first (21%), followed by Germany (18%), the USA (13%), Japan (6%) and Switzerland (4%) if we have a look at the value of the products.
Russia has a decent local production of measurement & control devices automation, which accounted for 1’850 million Euro in 2021. It is mainly located in the European part of Russia, where the Volga and the Central district account for more than half of the overall Russian production.
The fourth chapter lists the local competitors and gives and overview of the consumer industries, which cover almost all manufacturing industries in Russia.
In the fifth chapter you find the most important regulatory requirements for this sector. In the current situation you have to analyse carefully the sanctions situation. Contractual law as well as import and customs regulations are always important issues when doing business in Russia. There is a special regime for the registration of measurement & control devices automation, which you have to take into account. Last but not least intellectual property law and public procurement can play an important role.
The sixth chapter presents different business models for exporters and explains the advantages and disadvantages of them in different situations.
Chapter seven shows the challenges and opportunities for Swiss exporters, though the current volatile situation makes any forecasts very hypothetical. The import of foreign measuring, control and related automation devices will decrease significantly in 2022, but to which extend is difficult to say now. The improvement of the market situation for foreign companies will be possible only in case Russia manages to negotiate on the lifting of the sanctions.
To which extend the industry can take up once sanctions are lifted or reduced, will depend on a number of factors, like the effectiveness of the sanctions, the duration of the period that the Russian industry is cut of the international technology development, the willingness of the Russian government to invest in technology, the readiness of the international community for technology transfer to Russia once sanctions will be lifted and the ability of Russia to produce competitive products for the international market after the enforced break.
