Tatiana Kalinina, the Chairman of the Board of Directors of NPO ERKON, JSC, tells about the successful solution of such urgent nowadays problem as import substitution of high tech production
Mrs Kalinina, now, in difficult economic conditions, the theme of import substitution is becoming increasingly popular in the circles of Russian industrialists and entrepreneurs. And it must be noted that many business leaders, which suddenly faced with new challenges of the time, could not find a decent answer. As a person who interested in the problem, I know that even in the Nizhny Novgorod region there are a fairly large structures that are forced to simply even curtail production…
Yes, there are a lot of enterprises which have a problem not only to find new models of production, but also a problem of existence, of overcoming economic instability, and the negative effects of the volatility of the ruble. But the problem of import substitution, if it so understand by some entrepreneurs, can not be solved by simply and sometimes rapid response to the challenges of our time. I believe that it requires the systematic work, without regard to changing external factors. Otherwise, it turns out that we have difficulties, and than, as always, were not ready. But there are many positive examples with domestic enterprises, which quite calmly, without reducing the rate of production and research, continue to work in these seemingly critical conditions.
What, in your opinion, is the strategic basis for solving the problem of import substitution?
Those who forced upon us difficulties for today from the outside, quite objectively understand our vulnerabilities and with great reason they believe that Russia will face a crisis in industrial production. And, in my opinion, they have made significant efforts to damage our economy in the direction of an exacerbation of our internal problems. Unfortunately, the possible sanctions policy ideologues were not mistaken: many domestic producers were simply not ready for such events.
Ideally, the issue of import substitution could not have been reduced for urgent action to address the acute problems that mentioned above. For progressively developing enterprise in which the head every day, not sporadically raises the problem of diversification of production, its expansion through internal resources, finding new partners, make an introduction of advanced technologies, phasing out of external borrowing, so this question turns into a normal routine task. This, if you want is the ideology of labor, of which I am a supporter.
In addition, this economic meltdown, which I would not call the crisis , must direct the thought process in the right direction. A potential of our country is enough to get out of this situation with the necessary foundation for economic growth.
Let’s go back to your project: what happened with «Erkon» and its traditional partners that you puzzled to find solutions to issues of import substitution?
Oh, nothing special either with us or with our partners does not happen. No wonder up to this issue I tempted to speculate about the current economic problems. JSC «NPO» Erkon «was and remains a stably developing enterprise. Arising Question of the import products are among planned, without much dependence on external factors. More importantly, solving this problem, we really have created the conditions to one of the segments of our industry to abandon the foreign partners, including from those countries who are active participants in the sanctions blackmail.
And what kind of products specifically yoy are talking about?
There is such an important element in electronics, called chip inductor. Though a layman would be difficult to understand, but still: this is a radioelement, which is a helical or spiral coil of a collapsed insulated conductor having a large inductance with a relatively small capacity and low active resistance. Chip inductors are used in the construction of high-pass filters, narrowband logarithmic amplifiers, power amplifiers, electronic voltage-controlled oscillator in phase shifters, delay circuit and some other areas. I hope that your readers will be very interesting to understand it (smiles).
So, chip inductors are products of interspecific application, and it is widely used in our country in the manufacture of equipment designed in particular for the IT-sphere. I do not need to explain the special status of these products especially in the context of current sanctions. Especially, previously these products on the domestic market supplied by German and Japanese manufacturers.
Why releasing of a chip inductance has not been mastered by domestic enterprises?
This product is very, very knowledge-intensive, high-tech, and for its production required instrumentation and equipment, which are analogues in Russia simply did not exist. In addition, in our country there were no specialists able to carry out maintenance of such equipment and knowledgeable technological cycle of the chip inductor.
How long it took you and your colleagues to make a decision?
Take a prompt decision on the opening of your own production in some deadlines in principle is impossible. Even with information about the capacity of the Russian market for this product, we had some serious concerns about the implementation of this project. On the other hand — we saw that no one else wanted to take responsibility for the issue of domestic chip inductors, despite its absolute relevance and significance.
Everything happened gradually: long before our country have heard about sanctions, we have made the most important step in the decision — put in November 2013 a new formed goal, namely, the conclusion of our company to a qualitatively new, high-tech level operation. As of November 2014, we signed the first contract for the supply of our products. In between there were contracts with enterprises developing equipment from Malaysia, staff recruitment and training abroad, an invitation to «Erkon» company Malaysian professionals to ensure delivery and installation of equipment, training for our employees, create technical documentation for the production of pilot batches, for marketing research …
By the way, this month «Erkon» have been visited by the Honorary Consul of Russia in Malaysia Mr Teo Seng Lee , who was surprised in a good way as we managed in such a short time to install, learn and start using the output produced equipment from his country.
That is, they have much to learn from us too?
Absolutely. Moreover, the Malaysian Consul stressed that such specialists who could efficiently solve tech problems in such a short time, he have met only in Russia. Even said that if Russian entrepreneurs decide to establish joint ventures IT-sphere in Malaysia, in the moment of combined with high profitability of their work, they will be among the most competitive in the world.
And by the way, we have previously discussed with the Honorary Consul the possibility of organizing targeted training of our young professionals in Malaysian universities for the development of «Erkon» mutual training and exchange of experience. If the Nizhny Novgorod University will show interest, it could be done within the framework of inter-university cooperation agreements.
There is much talk about the problem of access to credit for business — including for industrial enterprises. On Which means the equipment was purchased for this project?
Again — our development strategy for policy makers, allowing use for this purpose only means of JSC «NPO» Erkon. «
And how things are going on today?
In January of this year, everything came to a logical conclusion: a new, not only for us but also for the electronic industry in the country, line running at full capacity. Now the chip inductor is included in the category of normal range of products of our company.
And now for the numerous domestic enterprises using chip inductors in its production, will not be necessary to persuade foreign producers to find some way and bypassing sanctions, to sell them these components.
In fact, you have created a precedent: the company has launched a program of import substitution but not at the request of the government, and on ypur own initiative …
I sincerely hope and I am sure that we are not the only ones in the domestic market. Speaking of the market, this «precedent» in general very revealing. Imagine that we have already begun to receive applications for the supply of products from the companies in Central Europe, ie from those countries that have only recently could we do to dictate terms. For the market, as you know, all the political vicissitudes are secondary.
Nonetheless, recalling the beginning of our interview, where we were talking about finding a universal recipe to select «import substitution trends.» What would you advise to domestic enterprises, which are still only at the beginning?
By itself, the Russian market is quite capacious, however, due to the high cost of credit because of the increase of the refinancing rate of the Central Bank, because of the lack of qualified personnel, because of the reluctance of the Russians elementary work on industrial production — because of all of this is quite difficult to compete with foreign manufacturers.I understand that not all businesses can afford to invest heavily in development. Therefore, some universal «recipe» simply can not be. It all depends on the goals, desires and capacities of individual producers.
Once again, I will say about the basic things: it is necessary to form in the society the same one I have already marked ideology of labor and in collectives instill the concept of responsibility for the outcome.. . With regard to financial instruments, one of the options, is the state could make greater use of interest rate subsidies on loans — with the aim of getting products to the level of profitability.The more that it already has the appropriate federal programs. Often, all depends on the passive position of some officials. And it is also a systemic problem, which sooner or later will have to be decided. In our country, in which — due to historical and other reasons — many processes tied to the power structure, it has a special meaning.
Indeed, your example should inspire many domestic manufacturers. And dont you think about widely expressing of yotself, for example, to inaugurate your new line?
Well, self-praise… it’s not our style. Although about the inauguration of the line is a good idea. (Laughs.) I promise to think about.