Tatarstan manufacturers continue with large projects despite crisis

January 15, Tatarstan’s Economy Minister Marat Safiullin reported on the course of implementing the earlier adopted anti-crisis and financial recovery measures.

He said "we are going through a crisis that is deeper and more complicated than we imagined". The instability on the world’s financial markets is evidence to this. In October, an anti-crisis programme was devised in Tatarstan, based on the analysis of the best available practices. Each ministry and department was instructed to design a crisis-coping plan within its area of authority.

"We were one of the first in the Russian Federation to set up a system of regular monitoring of the economic situation and are weekly surveying about 100 manufacturers in the key economic branches, as we are some socially crucial markets and prices. They are the prices of food products and medicines," said the economy ministry’s chief.

Surveys show that difficulties have cropped up in the financial sector. Despite that the banks’s liquidity is sufficient, lenders have begun to impose tougher requirements when issuing loans and have become more reluctant to give credits to both private persons and corporations. Guarantee amounts and interest rates have been raised. The amount of lending has, however, not been increased. Start-up businesses that need loans to refill their current assets, are facing difficulties. "In some cases we have managed to diagnose the problem and to find an effective solution," noted the minister.

He went on to recall that the Tatarstan Prime Minister had in November presented to the government of Russia measures of state support and an anti-crisis plan. "We have added the republic’s programme with a section related to the functioning of the federal authorities. We focused on making a list of Russia’s backbone companies, to be tightly monitored, decisions on which were to be made at the federal level. Tatarstan’s 11 larger companies were included on the list," said Mr Safiullin.

The economy ministry had for the past week hosted meetings of task forces discussing forecasts for the year’s first quarter. Issues related to liabilities and obtaining funds, as well as implementing investment programmes, salaries, employment policies and preliminary forecasts for the year had been discussed with business executives.

"Our biggest company Tatneft is being optimistic; despite that the raw material markets have over the past months been substantially less profitable, the company sets targets for this year commensurate with the ones last year. This is accounted for by the fact that when the conditions were favourable, the company made a sort of cushion that now allows it to sustainably implement projects.

OAO Taneko is to go on with its projects on constructing a petrochemical plant and a metal cord plant in Nizhnekamsk. These are completely new tyres, wearproof and safe for trucks and buses. The company’s management has confirmed that the programmes will not be frozen but continued to the extent they were approved. The company is coping with the crisis by applying an extensive programme of cost reduction," said Marat Safiullin.

Projects outside the Russian Federation, as well as current expenses have been decreased. Auto makers are, according to the minister, facing challenges. "The situation is complex, the Russian and international markets have shrunk considerably. The governments of Russia and Tatarstan, however, have put forward some initiatives on stimulating the demand and increasing state purchasing of products made these manufacturers. There are some initiatives aimed to subsidise the interest rate for consumers and there are some large customers, like the defence industry, the Emergencies Ministry and the Health Ministry," said the minister.

Vladimir Putin, he added, had, while on a visit to Tatarstan, made an instruction to increase state purchasing from the Kamaz and Sollers auto makers.

Tattelecom has displayed good results as well. "All this means that industrial production in these branches is going to be predictable. All the companies are being responsible in terms of personnel policy and salaries. They are trying to apply strategies that will allow to keep the bulk of the production workers in place," enhanced Marat Safiullin.