USC will need more shipyards and money to implement the second scenario of the new strategy until 2035

USC’s strategy, previously approved by the government, according to Kommersant, involves the construction of a new medium-tonnage shipyard in the North-West of the country, as well as the specialization of shipyards in Kaliningrad, Crimea and the Far East for the development of mass production. However, the key issue—the volume and sources of financing for the strategy—has not yet been substantively considered. Proposals are collected by June. Analysts emphasize that the main thing is still unclear: how the new strategy will affect the cost of ships for Russian customers.

According to Kommersant, the United Shipbuilding Corporation (USC) proposed that the government build its long-term strategy until 2035 based on two scenarios: an anti-crisis (“state-owned shipbuilding”) and a priority for USC (“shipbuilding 4.0”).

The draft strategy was presented on March 26 at a strategic session on the further development of USC under the leadership of Prime Minister Mikhail Mishustin. At the end of the session, according to Kommersant, the second scenario was generally approved. The head of the Ministry of Industry and Trade Denis Manturov explained after the event that the USC strategy, as well as the strategy of the shipbuilding industry, could be approved in the near future.

In August 2023, the government transferred USC to the trust management of VTB for five years due to the failure of the company’s financial rehabilitation program, after which the company was headed by the former first deputy chairman of the bank, Andrei Puchkov. As follows from the materials for the strategic session, USC’s revenue in 2023 amounted to 400 billion rubles, of which the share of civil shipbuilding is 17%. It notes that the company is building at a loss and at the same time it is slow and expensive for the customer. The goal until 2035 is to increase revenue by 3–5 times and reach break-even.

The first scenario involved minimizing costs in order to bring the company to break-even. It focused on orders with critical technologies (state defense orders, icebreakers, ships with nuclear power plants for Rosatom). It was proposed to reduce the number of unprofitable shipyards in Kaliningrad, the Far East, Crimea and the Volga-Caspian basin.

The second option, approved by the government, involves increasing state support, modernizing current shipyards with their simultaneous specialization in a certain type of vessel, expanding competencies in marine instrument making and mechanical engineering, and building a new medium-tonnage site in the North-West.

In this scenario, the inefficient shipyards of Kaliningrad, Crimea and the Far East (Amur and Khabarovsk Shipyards, Vostochnaya Verf) may be specialized. This, according to the authors of the strategy, will allow them to achieve serialization. The most effective sites – Sevmash, Zvezdochka shipyard, St. Petersburg shipyard and Krasnoe Sormovo – can remain multi-functional. In addition to state defense orders, they will continue to build unique vessels – for example, icebreakers, floating nuclear units, and offshore platform units.

At the new shipyard in the North-West, it is proposed to build ships with a deadweight of 15–70 thousand tons, primarily bulk carriers and tankers, but also container ships, refrigerators, and ferries. The estimated commissioning date is 2031.

Under the scenario of a complete reboot of the industry, USC expects to increase productivity fivefold, to 1 thousand ships by 2035. From 2011 to 2022, the company produced 201 vessels, in 2023 it delivered 25 vessels to customers, and the plan for 2024 is 36 vessels.

Key issues – the cost of implementing the second scenario, the scheme for its financing, as well as guarantees for the USC shipyards of a stable order – were not discussed in detail at the meeting, Kommersant’s sources say. USC’s consolidated investment program, including financing the modernization of facilities and the construction of new ones, is planned to be finalized by June. At the same time, following the results of the session, according to Kommersant’s sources, instructions will be given by the end of the year to work out measures to gradually protect the market from the supply of foreign ships and ship components. At the same time, it is planned to expand the program of preferential leasing of ships.

VTB forwarded the request to USC, where Kommersant did not respond.

Immediately after the transfer of USC to VTB, it was not only about the strategic development of the corporation, but also about its financial recovery. The previous head of USC, Alexey Rakhmanov, estimated losses for 2022 at 20 billion rubles. per year, but Kommersant’s interlocutors said that the amount of accumulated losses is many times higher. The head of VTB, Andrei Kostin, back in the fall of 2023, when the USC audit was just beginning, mentioned that the volume of the corporation’s financial problems exceeded initial expectations.

In previous years, Alexey Rakhmanov has repeatedly complained that the Ministry of Defense, USC’s key customer, is reluctant to revise estimates for its projects, and their delivery is delayed due to long testing of weapons systems by related companies. Long construction times led to losses for USC. However, in civil shipbuilding, the corporation faced similar problems in the construction of nuclear icebreakers LK-60, and in the creation of trawlers and crab catchers for Russian fishing industries.

It was assumed that losses on the prototypes would then be compensated by profits during the construction of subsequent ships, but the 2022 sanctions on ship equipment led to the need for a drastic change in projects, and serial production could not be achieved. At the same time, Russian customers are faced not only with an increase in the price of ships, but also with delays in delivery deadlines – sometimes for years.

Many customers now want to go to Turkey and China due to high prices and failure to meet construction deadlines at Russian shipyards, notes Nadezhda Malysheva from PortNews. Also, in some cases in the Russian Federation, quality suffers due to inconsistency in the interaction between designers and builders. “Therefore, it is important how this strategy will affect the cost, whether the Russian market will become competitive with the world market,” she says. “Unification of shipyards, creation of mass production, on the one hand, is a good intention, which will probably reduce the cost of the project, but this It will also limit the choice of projects for customers; the shipyard will dictate its own conditions.” Nadezhda Malysheva adds that USC’s plans provide more advantages for government customers, while private companies will have a much more difficult time.

Tatiana Dyatel