Federation Council committee discusses state support for textile industry

An innovative territorial cluster based on the project for the production and consumption of polyester products will be created in the Ivanovo region.  This decision was made at The Golden Ring Forum by the Interim Committee of the Senate for monitoring Russia's participation in the WTO and the Customs Union.

Deputy head of the Federation Council Committee on Economic Policy, Yuri Roslyak, said at the forum that the purpose of the government is to develop legal, economic and other mechanisms to ensure smooth transition of the economy and its separate sectors to the new environment as a WTO member. According to Roslyak, the regions with multicultural industry may become a problematic territory, which makes the full use of advantages of global competition impossible.

The Governor of the Ivanovo Region, Mikhail Men, said that the region today is in fact the only subject of the Russian Federation with so may textile and garment-making companies (the two thirds of the production of fabrics, the proportion of textile and clothing industry is 25% of the GRP).

The Governor noted that "domestic textiles and Ivanovo textiles in particular, are quite competitive on the world market. Suffice it to say that in the region there are companies that export 80% of their production. Clearly, however, textile workers need government support in order to level the competitive position in comparison to other manufacturers of WTO member countries." The governor of the Kostroma region, Sergey Sitnikov, supported this position. The possibilities of state support at the regional level were exhausted and "ensuring the competitiveness of the domestic industry in the WTO became an all-national goal for Russia, Mr. Sitnikov believes.

In addition, according to Russia's Deputy Minister of Industry and Trade, Georgy Kalamanov, Russia's accession to the WTO will cause 2.7 billion rubles of losses to the Russian light industry in total, and the textile industry itself can lose up to half a billion rubles. As a result, the members of the committee agreed that the main goal at this stage was to enter the speedily growing market of synthetic fibers, transition to a new quality of raw materials and the new assortment policy, along with the development of traditional industries.

Georgy Kalamanov added: "We need to give an incentive to the creation of the complex for the production of PET in the Ivanovo region, to be able to reach the planned production volumes within three or four years and to take leading competitive positions. The complex will be able to fully cover Russia's needs in synthetic fibers."

First deputy chairman of the Government of the Ivanovo region, Pavel Konkov said that such complex would produce 200,000 tons of fiber per year, whereas the amount of required investment will make up 10 billion rubles.

The head of the Association of Entrepreneurs of Textile and Light Industry of the Ivanovo region, Vasily Gushchin, noted that the problems in the industry could occur not only due to the problems with raw materials, but also because of the growing energy tariffs, the lack of personnel and complications with the protection of the rights of Russian companies under the conditions of global competition in the WTO.

As a result, the Interim Commission of the Federation Council developed measures for state support of domestic textile and light industries. They include proposals for changes in the mechanism of state order with regard to priority in the use of domestic products, tax benefits and priority right for Russian companies for their participation in trades. In addition, officials discussed the algorithms to provide subsidies on the loans of industry-related companies for  re-equipment, raw materials supplies and reimbursement for energy costs. An intergovernmental commission will be formed to struggle with contraband and counterfeit products on the market.