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

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Banking, finance, insurance and business consulting are only starting to
play an important role in developing the cluster. One of the necessary
conditions for modernisation is the ability of companies to ensure longterm
credits. No less crucial is the establishment of an effective system of
industrial insurance. Introduction of information technologies in all stages
of management and technological processes, which is the distinctive feature
of modern industrial organisation, is only starting in the cluster, too.
Only a small part of cluster output is consumed within the region, as a
result of a sharp decrease in machine-building production in such industries
as shipbuilding and, most of all, power engineering. However, these
industries, as well as the construction industry, are still the main consumers
of the cluster's products on the domestic market. The greatest part of
the cluster's output is produced for export - on average, more than 50%
of total sales and 70% or more of some product group sales.
At the end of this chapter, the structure of the metallurgy and metalworking
cluster is represented in the form of a flow chart, which allows
for vivid depiction of the cluster’s cost chain.
In particular, it is clear from the above chart that ferrous and nonferrous
metallurgy and metal working are sub-sectors independent
from each other. They are united only by the general similarity of
their cost-creation chains and by their main customer, the machinebuilding
industry.
3.4 Role of the Cluster in the Economy of Russia and
Northwest Russia
Metallurgy, despite the fall in production volumes – in 2000, the production
volumes in ferrous and non-ferrous metallurgy were 71% and
57.6%, respectively, of 1990 levels – remains one of the key industries
of the Russian economy. According to the year 2000 results, metallurgy
earned a 19% share in the total volume of domestic industrial
production, and metallurgy companies’ aggregate sales amounted to
more than RUR 783 billion (about USD 27.8 billion).
Besides, the importance of the metallurgy industry for the country's
economy stems from the fact that many metallurgy companies have
actually formed towns nearby and bear substantial social costs (Norilsk,
Cherepovets, Novokuznetsk, etc.).
There are a number of metallurgy agglomerations in Russia. The largest
is located in the Urals – more than one third of the total metallurgy production
in Russia. This is a result of historic events (transfer of industrial
facilities from the European part of Russia to the Urals and Siberia during