The publication by The Center for Strategic Research (CSR) examines growth prospects for the light industry in Russia in the context of the current turbulence.
The Roscongress Foundation presents the salient points of the publication accompanied by fragments of broadcasts of relevant panel discussions from the business programme of international events held by the Roscongress Foundation.
Despite the challenging economic situation, Russian light industry companies have a potential for growth.
The authors of the publication state that despite the decrease in imports and the disturbing economic environment, Russias light industry has opportunities for development. Although the market is dominated by foreign goods, products of Russian manufacturers are already present in various segments and price ranges due to state support measures. The fact that foreign brands are leaving Russia or suspending their operations, combined with the declining purchasing power of the population opens new niches for Russian businesses and offers Russian manufacturers an opportunity to expand their market presence.
With adequate government support, it is possible to scale up production in many regions.
CSR estimates that with adequate government support, production in the light industry can be scaled up in at least 17 regions which account for 45% of jobs in this sector.
For instance, Ivanovo Oblast, one of the leaders in textiles production, has the greatest potential for reducing manufacturing costs, launching new projects, and scaling up. Notably, Ivanovo Oblast already has considerable experience and high-skilled labour (the oblast accounts for 10% of jobs in the light industry and 20% of jobs in the textile industry).
Support measures can help the light industry attract funding and increase profitability.
The authors of the publication note that to develop the industry and strengthen the market position of Russian manufacturers, its necessary to invest heavily in expansion and launch new products, while controlling cost price. The Government is currently preparing targeted measures for this sector, while some anti-crisis support is already available to manufacturers in the form of loan subsidization. Also, the authors of the publication consider it necessary to return to the issue of «whitening» salaries in the sector and strengthening administrative control over remuneration, which will help raise official salaries without affecting the budget and generate substantial profits for companies over a ten-year horizon. This will extend the light industrys capability to attract financing for development.
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