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"We need to accelerate production"

Oleg Konyushev: Machine-building enterprises of the Far East need modernization

"We need to accelerate production"

Oleg Konyushev, General Director of OJSC Far Eastern Power Engineering Plant (Dalenergomash), in an interview with about how it is possible to develop a business without state support.

- Oleg Vladimirovich, in 2013 “Dalenergomash” celebrated its anniversary - the company turned 80 years old. For such a solid age, the plant managed to survive the crisis moments and earn a good name in the power engineering market. In what direction is the industry developing today?

- The most serious problem of the domestic machine-building industry can be called the fact that the majority of enterprises, especially those that do not enjoy government support, operate on outdated equipment. Now a strategy for the development of the enterprise until 2020 is being developed, and one of its most important points should be the technological modernization of capacities. We can develop a super modern compressor or the latest turbine, but we will no longer be able to manufacture this machine due to backward technologies. The market has modern equipment from Russian and foreign manufacturers. For example, we have developed a state-of-the-art turbine GTT-9, and the main one - the rotor - we cannot simply manufacture technologically.

- How does the enterprise come out of similar situations?

- We are trying to place an order for the manufacture of part of our machine at other enterprises. Factories that have the necessary capabilities to perform this work, there are in Russia and abroad. These enterprises enjoy state support. "Saturn - gas turbines", "Salute" - these and a number of other enterprises with state participation have programs for which new equipment is purchased. Our enterprise is completely private, therefore the renewal of capacities is carried out at the expense of own forces.

- A developing machine-building enterprise can be an attractive object for investment. Are attempts successful in establishing close cooperation with potential investors?

- In order to carry out a complete modernization of the plant, we need about 700 million rubles. Seven years ago, representatives of Sumsung Techwin came to us, who offered to participate in a joint project. They worked on a power turbine project with an 5 MW capacity and wanted to localize production at our plant in order to sell products on the Russian market in the future. Negotiations were actively conducted, foreigners were satisfied with the quality of our products. But the delegation passed through our workshops, and the company refused to work with us due to the insufficiently high level of production. Everything rests on the professionalism of the plant employees. We are trying to attract investment - we work with credit organizations, with banks. But any bank needs to be shown how the enterprise will repay the loan. At the request of the credit institution, we provide a business plan. For example, it says “making ten turbines”. The bank is asked to show contracts with customers. We cannot provide such documents, because we work for the future six months - a year in advance. All our equipment is manufactured for specific projects. For example, there is a construction project for a cement plant, which assumes the presence of a compressor station - we can take on this order. And the plant cannot simply suggest that an organization buy a compressor from an enterprise without a project.

- Do you manage to attract foreign investments?

- There have been attempts to attract funding from foreign organizations, but, unfortunately, not everything turns out as we would like. When the enterprise development program was being developed, the engineering company Hormann-Rawema from Germany was involved. They completely developed the technological chain, the arrangement of equipment and machines, and selected the technology. As part of the contract with Dalenergomash, the partners selected us an investor - the German Hermes Bank, which provides support to German manufacturers. We could purchase German equipment, but the confirming bank was to become a Russian financial institution. In the Russian bank, the value of money immediately increases by an order of magnitude. If the German bank is ready to give a loan under 3-6% per annum for seven to ten years, then our bank gives 18% -20% per annum. Thus, the project becomes unprofitable. On order, delivery and installation of equipment, training of personnel and direct production of the product from the company takes up to three to four years. The domestic bank needs to return money after the third year. But we have not had time to earn them yet. Such nuances complicate the solution of financial issues. The enterprise changes part of the equipment at its own expense. Modernized two German lobot machines, replacing the electronics. In terms of we have an upgrade of another lathe. In addition, there is an agreement with a leasing company to buy state-of-the-art German equipment that will replace about ten old machines, surpassing them in terms of productivity and product quality. For the acquisition of this facility, leasing out of Dalenergomash means about 90 million rubles.

- The new equipment will positively affect the productivity of the enterprise. Is it difficult for a factory to withstand competition with market players who managed to upgrade most of the facilities?

- To date, we manufacture the high pressure turbine for 12-18 months. Customers still understand us, but they are already dubious about financing projects. Previously, we took prepayment from customers, but today nobody wants to pay money ahead. Therefore, we need to accelerate production. Today we are renewing production and we are moving away from "dead orders". The fact is that the structure of the market has changed. Earlier, Dalenergomash was engaged in the production of baby carriages, fans, and other consumer goods - the cars were taken from the factory similar products. At present, we have closed the production, because there is no sense in "shooting from a cannon on sparrows". Now our factory is imprisoned for large, expensive orders, powerful and complex in manufacturing machines. The block of freed shops today is insulated, we carry out gas heating, we put it into the proper kind.

In addition to the plant in the city of Khabarovsk, OJSC Dalenergomash includes branches in the city of Komsomolsk-on-Amur - Amurlitmash Plant and Komsomolsk-on-Amur Lifting and Transportation Equipment Plant (“KZPTO”). You took KzPTO under the wing when the company was in a financial crisis. The plant’s debts amounted to more than 300 million rubles - how was the situation resolved for the enterprise? The management of JSC Dalenergomash planned to restore the production of cranes, which were previously manufactured by KZPTO, at the facilities of the Amurlitmash plant. Did you succeed in making plans come true? How are your branches currently evolving?

KZPTO is bankrupt. Meanwhile, the crane products produced by the enterprise are in great demand on the market. We decided to keep the production: we buy the machines that the manager of the enterprise sells, transferred the employees of KZPTO to the established branch. On the basis of "Amurlitmash" equipped workshop and in mid-August we will organize a presentation of the launch of production of crane equipment. There is no more similar enterprise in the Khabarovsk Territory, and we have employed all the main specialists of this branch of mechanical engineering in the city of Komsomolsk-on-Amur.

Changing market conditions correct the way of domestic industrial production - if earlier the main rate was for consolidation, then today from the full cycle of the enterprise switched to a system of specialized production. It is more economical to buy specialized parts from partners than to produce them at your factory.

- Today it is beneficial for an enterprise to leave all the most important competencies - focused on large unique orders. Amurlitmash produces foundry and other products for Dalenergomash. A large volume of production comes from specialized enterprises of the Urals, from the central regions of the country. There was an attempt to work with a Chinese manufacturer, but our technical requirements are still at odds with them.

What mechanism of enterprise management allows you to produce competitive products and retain leadership positions in the market?

We monitor the status of our contractual base, on which the timely payment of wages to employees of the company directly depends. At our enterprise, the key performance indicators are rigidly tied to the shipment of equipment - if the products are not shipped on time, you can not get money for the goods, and therefore not earn.

Do you have problems with shipping products?

- There is one common problem - the monopoly of Russian Railways. Of the actual situations: we ordered for 23 July delivery of the car to the plant, but he did not come on time. We had an agreement with JSC "Minudobreniya" (Rossosh city) on the terms of shipment of the nitrous supercharger. According to the plans of the enterprise-customer on 15 August, it was planned to stop the old machine and replace it. Of course, the tight delivery times of equipment are economically conditioned. Days of laying down the line for the production of weak nitric acid, where a nitric supercharger is installed, necessary to replace, cost several million rubles. Having made the car on time, we can not deliver it on time because our railwaymen mistakenly put our platform at Khabarovsk-2 station, and not at Khabarovsk-1. As a result, the car traveled to our factory for seven days. Obviously, the customer will express dissatisfaction with the disruption of delivery terms.

Dalenergomash products, in addition to Russian consumers, are supplied to India, Bulgaria, Central Asian republics. The volume of export deliveries at the plant exceeds 40%. Is the base of clients of the group of companies actively growing in the domestic and foreign markets? In what sectors is the company's products in demand?

- Now we are focusing not only on maintaining relationships with regular customers, but also on the return of lost customers. The technique of active sales helps to expand the client base. World mechanical engineering is based on the sale of spare parts - it is more profitable to sell the car cheaper, and then to supply the original spare parts for its operation. The machines manufactured at the plant are in demand in many industries: in metallurgy, mining, and the chemical industry. Unfortunately, due to the prevailing political situation in Ukraine, we are losing contact with our partners in the field of chemical production. Our machines worked at the company in Gorlovka, Severodonetsk and other cities. Today there was a double situation: Ukrainian production stopped buying parts from us, and stopped supplying specialized units to the Russian market, thereby reducing the number of competitors.

- The company is actively developing the foreign market. Dalenergomash signed an agreement that allows the company to participate in tenders announced in India and to increase the portfolio of orders. Requirements for the quality of products from foreign customers is higher than that of Russian customers?

- The largest metallurgical enterprises of India are owned by the well-known businessman Lakshmi Mittal - our factory works with these mills. In addition, about 40% of Indian enterprises are private enterprises, with which we have not yet cooperated. Now we have partners who are ready to promote Dalenergomash products in the unreached areas of the Indian market. The quality of our products is quite satisfactory to foreign customers. There are only some features of production related to the location of the buyer country. So for India, which is in the tropics, we manufacture products using special technology. Pricing policy is also more democratic for us. For example, the supercharger of coke oven gas today can be manufactured for $ 1 million, we build more cheaply.

- In 2014, the Government of the Russian Federation set the course for the accelerated development of the territories to the regions of the Far East. Subjects need to improve socio-economic indicators and create conditions for new investment flows. The concept of development of the Far Eastern regions provides for the format of industrial industrial parks, which will become a platform primarily for small and medium-sized businesses. According to the statement of the regional authorities, three industrial (industrial) parks have already appeared in the Khabarovsk Territory, including the Dalenergomash industrial park. How does the special status affect the work of the enterprise? Does the format of an industrial park help attract customers and investors?

- In fact, an industrial park on the basis of our company has existed for a long time. We, as residents, are engaged in production at our own capacities, and a number of companies rent areas for production from us. At the moment, we are liberating the area on the territory of the plant, modernizing them and preparing for small companies. Recently, the manufacturer of machine tools and equipment was placed, though not under the brand name of an industrial park. If we talk about preferences, the benefits provided by the regional government are insignificant: 1 million rubles per year for 16 legal entities - this kind of money will not do the weather. However, we will develop an industrial park in order to locate small production in the territory of the enterprise and give them orders for outsourcing.

- At your enterprise, an expander-generator set was created for a foreign customer, which makes it possible to produce environmentally friendly electricity. In Europe, such installations are in demand, and state subsidies are directed to the development of "green" energy. In the Russian market, such innovations have not yet taken root?

- In Europe, the project "Green Energy", which funded the EU, was developed. The Spanish company concluded a contract with us, within the framework of which our company developed a project of an expander-generator plant. At the moment, the contract is frozen on the initiative of customers. Most likely, the European crisis in the economy made it necessary to cut spending on similar programs. However, there are similar projects in Russia. I know that similar plants operate at the CHPP in the Moscow region, but the idea of ​​producing clean energy is not so popular in the country so that such projects are financed from the budget.

- Probably, in order to withstand competition in the machine-building market, it is necessary to have a “piggy bank of innovative developments” and periodically replenish it ...

- Yes, interesting ideas are born to the employees of the enterprise, but the question of their implementation often comes up against the imperfection of capacities. We plan to master the production of turbine, compressor, rotor blades. We are going to purchase a special machine for this and manufacture the blades first for ourselves and then for other enterprises.

- Does the industry have a staff shortage today? Once upon a time young people dreamed of becoming engineers, fashion returns to the profession? The company cooperates with regional universities in training specialists?

Enterprises in which engineering and technical workers are more involved are always experiencing personnel shortages. So the plant needs engineers, designers and technologists. OJSC Dalenergomash cooperates with universities and technical schools of the city. Heads of the enterprise annually form part of the commission on state examinations and on the defense of final qualifying works, participate in expert commissions of competitions for students and graduates of technical specialties. We invite young specialists to work and allocate funds for their training, but, unfortunately, the labor market cannot satisfy the existing need. We invite Ukrainian specialists - nine people are ready to start working at our enterprise. We plan to continue to invite Ukrainian workers, to employ and help them adapt with us. We will try to solve the personnel problem with all our strength. The same production of turbine blades without a trained technologist is a dead-end path. 

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