VTB will need more than 2 trillion rubles to maintain and develop USC
The United Shipbuilding Corporation (USC), which came under the control of VTB, will require more than 2 trillion rubles. The funds are needed to cover the deficit and development, including the construction of a new shipyard for large-tonnage vessels in Vladivostok. Analysts see risks in the project's implementation in the shortage of personnel in the region.
The maintenance and development of USC will require more than 2 trillion rubles, according to a statement by VTB CEO Andrey Kostin on the sidelines of the EEF. According to him, 1.029 trillion rubles will go to cover the USC deficit until 2030. The money is needed to finance operations, pay off obligations, and loans not secured by products. "These are funds needed to complete unprofitable orders," Mr. Kostin noted. A comparable amount, according to his estimates, will go to the development of USC.
VTB received USC, more than 40 enterprises of which form the main part of the Russian shipbuilding complex, into trust management in 2023. Soon, Andrei Kostin announced a “huge financial hole” in the corporation’s budget (see “Ъ” from September 11, 2023). At that time, he estimated the volume of necessary investments in the Russian shipbuilding industry at 0.5–1 trillion rubles over five to seven years. But in the end, USC alone required twice as much.
Of the costs of developing the USC, approximately $5 billion (448.5 billion rubles at the Central Bank exchange rate on Friday) is planned to be spent on the construction of a shipyard in Vladivostok, in Promezhutochnaya Bay.
The estimate is preliminary, based on similar projects, without detailed development. First Deputy Prime Minister Denis Manturov said that construction would begin at the end of 2025. The work will take six years, Mr. Kostin specified. According to him, the shipyard will be able to produce tankers and gas carriers, but will primarily be engaged in the production of container ships and bulk carriers - merchant ships up to 300 m in size. The modernization of four shipyards in St. Petersburg is also being considered.
Mikhail Burmistrov, head of Infoline-Analytics, warns that there is a “critical shortage” of personnel in the Far East. Previously, the possibility of relocating employees of machine-building enterprises to the region was considered, but today, with the high demand for people in the defense sector, this has become impossible, he says. Moreover, the expert continues, even for those “scarce” personnel, the new shipyard will compete with Zvezda, which is not good for either enterprise. According to Mr. Burmistrov, the new shipyard may become successful if commissioned closer to 2030, when the economic situation changes. In St. Petersburg, in his opinion, the most reliable project in the medium term is the construction of a second dry dock at the Baltic Shipyard.
According to Andrey Kostin, one of the sources of financing USC's activities will be VTB dividends, including on preferred shares, to the state, for which a decision has already been made to direct them specifically to the company's recapitalization. VTB paid RUB 32.7 billion in dividends in 2020. Based on the results of 2021, the bank planned to direct 50% of its net profit, which then amounted to RUB 327.4 billion, to them. But after the bank fell under sanctions, the government ordered VTB to refuse dividends, which have not been paid since then. On the sidelines of the EEF, Mr. Kostin said that although VTB "has a desire" to pay dividends for 2024, the bank has an obligation to the Central Bank "to hold on to dividends in order to quickly increase the capital base" lost as a result of sanctions in 2022.
A number of extra-budgetary sources are planned for financing USC, including funds from VTB itself, the head of VTB added.
As Andrey Kostin notes, given that in the next five to seven years the Russian Federation will build ships more expensively than China, “first of all” it is necessary to think about state stimulation of demand – subsidizing leasing, possibly using the National Welfare Fund. The head of VTB also did not rule out protectionist measures, “at least at the first stage,” which will make “the use of foreign ships somewhat more expensive.”
