Sergey Boltramovich, Grigory Dudarev, and Vladimir Gorelov ... - Etla

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nowadays limits the possibilities for development of the cluster and
prevents companies from gaining a competitive edge in the mediumterm
outlook.
Equipment of the enterprises in the cluster is generally characterised
by a high degree of wear and a low level of automation. Quite often,
outdated technological processes are used. As is typical for many foreign
companies, production facilities of Russian metallurgy enterprises
are also under-utilised.
Presently, there are no competitive producers of equipment and machinery
for primary goods manufacturers in Northwest Russia. There is
therefore a real need for the renovation and modernisation of the established
metallurgy and metal-working equipment, with local equipment
manufacturers having an advantage in this field.
The main related industries of the cluster include energy and fuel
supply, logistics, collection and pre-processing of scrap metal, and production
of refractory materials. Metallurgy (especially, production of
non-ferrous metals) is a highly power-intensive industry. The current
relatively low tariff rates for electric energy and natural gas are one of
the cluster’s major competitive factors. Yet, in future, the tariffs will
inevitably increase toward international levels, and the companies of
the cluster will face an urgent need to reduce this cost. As of now,
power and fuel used per unit of Russian metal products is much higher
than that in developed countries, while companies’ own powergenerating
facilities are clearly underdeveloped.
The problems of logistics are no less important for the cluster than
problems of energy supply. The main bulk of cargo is transported over
long distances by railway, which is fully owned by the State. The constant
growth of railway tariffs over the last few years diminishes price
advantages enjoyed by Russian enterprises, a fact which is aggravated
by low quality of transportation and other logistics services. Still, there
is virtually no alternative to railroad transport, since most enterprises
are located far from seaports. Furthermore, throughput of the existing
ports is insufficient due to huge amount of cargo coming to the
Northwest from other regions of the country. Most projects currently
debated for new seaports include construction of specialised seaport
terminals for metal products.
Collection and pre-processing of scrap metals are at present mostly
oriented toward export sales (even in spite of the recently imposed
temporary ban on export of non-ferrous metals scrap), rather than toward
satisfying the demand for secondary raw materials for Russian
enterprises. It should also be noted that the volume of collected scrap