The imposition of sanctions and the ongoing military operations in Ukraine have led to a significant increase in demand for domestic machine tools in Russia, according to Semyon Yakubov, CEO of RT-Capital, a subsidiary of state-run corporation Rostec. Yakubov revealed this information to business daily Kommersant on Thursday.
The STAN group, Russia’s largest machine tools manufacturer, came under the control of Rostec’s subsidiary for work with non-core and distressed assets in 2019. At that time, the company was facing severe financial difficulties and was unable to fulfill loan obligations or complete orders from 2017.
As of 2023, the number of orders for the STAN group has nearly doubled, reaching a total of 6 billion rubles (over $64 million). Yakubov remarked that the group has never experienced such high volumes of orders before. He further stated that they are expecting orders worth 13 billion rubles ($139 million) for the next year, with many contracts already signed. The current demand for machine tools is exceeding the group’s production capacity.
Yakubov added that the STAN group is currently fulfilling orders from both the country’s military-industrial complex and the civilian sector. He noted that they have started working with state-owned companies, where there is a significant need for modern high-precision and complex machine tools. Furthermore, the company plans to expand its product portfolio to compete with foreign suppliers.
The CEO emphasized that before the introduction of sanctions, it was impossible for the STAN group to compete with foreign manufacturers since they had to build machine tools from scratch, while international giants provided fully manufactured products. However, the situation has changed. Yakubov believes that Russia now has an opportunity to revive a strong machine tool industry similar to what it was during the Soviet Union era. With the departure of unfriendly players from the country and increased state support focused on the industry, the STAN group aims to capitalize on this favorable environment.
Currently, the STAN group operates five plants in Moscow, Sterlitamak, Kolomna, Ivanovo, and Ryazan. They are also preparing to launch a new production site in Lipetsk next year, primarily focusing on the production of grinding machines. Additionally, the company plans to construct two new plants in the Moscow Region and the Urals.
In conclusion, the demand for domestic machine tools in Russia has surged due to sanctions and the ongoing military operations in Ukraine. The STAN group, under the control of Rostec’s subsidiary, has seen a significant increase in orders and is struggling to meet the current demand. The company aims to expand its product portfolio and revive the machine tool industry in Russia with the support of state-owned companies and the departure of unfriendly players. This presents a promising opportunity for the STAN group to establish itself as a strong competitor in the market.