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Machinery and Digital Manufacturing: Russian Business Adapts to Smart Technologies

09 April 2018
Machinery and Digital Manufacturing: Russian Business Adapts to Smart Technologies

Digital GDP

Russian industrial companies are gradually implementing smart elements at their production facilities, and the state is developing programs on the creation of smart factories. In order to accelerate this process, the Presidium of the Council under the President of the Russian Federation on Economic Modernization and Innovative Development approved the TechNet working group roadmap in 2017.

The document spells out the schedule for the implementation of the National Technology Initiative and stipulates the development of digital design and modeling, robotics, Big Data, and other industrial management and automation technologies.

TechNet roadmap targets the creation of the so-called Factories of the Future, i.e. technological platforms and solutions which incorporate digital, smart, and virtual production elements and allow for the application of digital design and manufacturing and virtual testing.


Roadmap developers point out, "Digital factories seek to develop and manufacture a new generation of products from the R&D stage (wherein core product characteristics are set) to the creation of a digital prototype, pilot model or small batch.

Smart factories are designed to manufacture a new generation of goods from a blank to a finished product while matching serial production costs of the current technological mode. Virtual factories incorporate digital and/or smart factories either as elements of the global supply chain or as distributed production assets within a single network."

In 2015, the global market powered by the Factories of the Future amounted to USD 773bn, Russia's share being 0.28%. In 2035, the global market is expected to reach USD 1.4tn, and Russia's share may be as high as 1.5%. The Ministry of Industry and Trade of Russia hopes to achieve this number by launching 40 Factories of the Future by 2035.

During the first stage of the program scheduled to run until 2019, total investment will constitute RUB 15.6bn, including RUB 8.5bn allocated from the federal budget.

McKinsey Global Institute experts point out that the digitalization of the Russian industry may result in an annual RUB 1.3-4.1 trillion increase in the national GDP by 2025. The application of digital technologies will reduce product launch times by 20-50%, and production automation will increase efficiency by 45-55%.

Investing in Pilot Projects

Aircraft and helicopter manufacturers are adopting smart systems. For example, United Aircraft Corporation (UAC) employs the virtual design bureau concept wherein engineers from several design bureaus and production sites work within a single digital environment. Sukhoi Civil Aircraft, Irkut Corporation, Ilyushin Aviation Complex, and Russian Helicopters group are also using this technology. According to the authors of TechNet roadmap, UEC-Saturn (part of United Engine Corporation, Yaroslavl Region), which specializes in the development and production of gas turbine engines for aircraft engineering, power industry, etc., will become a leader in the implementation of smart factory projects in Russia.

Rostec Corporation announced its plans to establish a pilot site at the Yaroslavl facility; investment into the project is expected to amount to RUB 7bn. The Smart Factory project will include a system of product lifecycle management (PLM) which will ensure data exchange between service centers.


"The project will result in the launch of a smart production facility and the formation of competencies and technological solutions necessary for further construction of globally competitive Smart Factories,"

Dmitry Mironov, Governor of the Yaroslavl Region, stated.


Over the first three years of its operations, UEC-Saturn Smart Factory is expected to implement 20 technologies in industrial production. UEC representatives added that in 2017 they had launched the first stage of their accelerator project at UEC-Saturn. The project targets advanced production technologies.

Under the initiative, UEC selected several projects with high industrial implementation potential, developed educational programs for future use, and attracted first investors. The pilot site generally focuses on technological solutions pertaining to a number of segments, such as mathematic simulation, computing and supercomputing engineering, IoT, and 3D printing.

Wharf Digitalization

United Shipbuilding Corporation announced a new project at one of its facilities with the support of the National Technology Initiative.

A digital wharf will be soon launched in St. Petersburg at the Sredne-Nevsky Shipyard (SNSZ). The project involves the creation of a database on all shipbuilding components. Moreover, computer testing will replace live on-site checks. Digitalization will double production capacity and increase export volume. The project is worth RUB 350mln.


"We expect that the larger part of funding (RUB 245mln) will come from federal sources, i.e. the National Technology Initiative, and the SNSZ will allocate RUB 105mln of its own funds. We will proceed to create the digital wharf even if we do not get the subsidy. Federal support will speed up the process, but we will keep working on the project regardless,"

Vladimir Seredokho, General Director of Sredne-Nevsky Shipyard, claimed.


If successful, the SNSZ model will be replicated at other Russian wharfs.

Government Contract on Smart Projects

Pumori Corporation, which specializes in technological engineering, points out that Russian companies are increasingly interested in smart manufacturing. Over the past three years, the demand for smart technologies has grown by 300-350%.

The company has implemented automation systems at more than 100 Russian enterprises from different regions. Moreover, Pumori introduced its own TOOL-MANAGEMENT system and Smart Factory complex by Japanese OKUMA Corporation to the Russian market. Representatives of the engineering corporation believe that digitalization will be facilitated by tax cuts on funds invested in production development.

"On top of that, the government could introduce subsidies on the development of strategic production areas, ensure stable production volume through government contracts, and provide soft loans or leasing programs. Such support instruments should be available not only to large corporations, but also small enterprises. The latter are often the most progressive, enthusiastic, and willing to implement unorthodox solutions,"

Vladimir Revzin, General Director of Pumori-Engineering Invest Ltd, shared.


The business community supports the idea of reducing the tax burden, for it will accelerate the implementation of technologies.


"Currently, regions can impose various taxes on movable assets, i.e. machinery and equipment which constitute the foundation of smart manufacturing. Even a 1.1% tax hampers development and jeopardizes investment into modernization,"

Sergey Mytenkov, Vice President and Managing Director on Information and Communication Technologies of the Russian Union of Industrialists and Entrepreneurs, explained.

INNOPROM-2017 selected the implementation of smart manufacturing as its key theme. At a strategic session, the Minister of Industry and Trade of Russia Denis Manturov talked about the future of smart technologies. CEOs of FANUC, Volvo Group, Lifan Group, etc. participated in the discussion. INNOPROM-2018 will also hold plenary sessions and special events under the Digital Manufacturing track. We invite your participation in the upcoming events featuring top experts in the field.

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