Russia invites foreign clothing brands to build factories in the country

The Russian authorities are actively inviting foreign clothing brands to build factories in Russia. Viktor Yevtukhov, Deputy Minister of Industry and Trade of Russia, said that the government’s support plan will partially subsidize raw material costs, technology upgrades and new investment projects. New factories will also enjoy long-term tax breaks until 2025. In addition, the Russian Ministry of Industry and Trade guarantees that invited manufacturers will capture market share by accepting government purchase orders.
We learned from a report on the Russian “rbth” website on November 19: During the textile and clothing exhibition in Milan, the China Textile Industry Association and other leading companies believed that Russia was no longer just a distribution market and were preparing to invest and build in Russia. factory. During the Mercedes-Benz China Fashion Week held in Beijing, the largest fashion event in Southeast Asia, the Russian Fashion Chamber of Commerce and the China Fashion Designers Association signed a three-year strategic cooperation agreement.
Russian Deputy Minister of Industry and Trade Yevtukhov said that this will reduce the cost of clothing production in Russia. In general, it is important to establish cooperative relationships with large chain retailers and develop sources of raw materials. As for the external market, Russia has great prospects for high-tech add-on products such as industrial textiles and nonwovens. Currently, this market accounts for about 30% of the industry’s total sales. In addition, Russian nonwoven production has grown eightfold over the past five years, while the EU market, especially in Germany, has accounted for 50% of industry growth in industrial textiles.
Despite the slowdown in economic growth, Russia’s consumer goods manufacturing industry has continued to grow. According to statistics from the Russian Ministry of Industry, Russia’s industrial output increased by nearly 5% in 2013. In addition, in the first nine months of 2014, the output value of the Russian garment industry increased by 7%, while the industrial growth rate during the same period was only 0.7%.
At the same time, after Russia joined the WTO and abolished tariffs, the output of leather and leather products dropped by 10.5% and 20% respectively.
To solve this problem, in August 2014, the Russian government issued a ban on the export of semi-finished leather. In addition, the Ministry of Industry and Trade is working on a similar ban on hide exports. Yevtukhov explained: “Russia is not the only country that has issued such a ban. Belarus has also introduced such a ban. The introduction of such a ban is mainly due to the shortage of raw hides, the huge demand for raw hides by Russian manufacturers and the export of imitation products.”
According to him, the root of the problem is that the disintegration of the Soviet Union caused Russia to lose a considerable part of its raw material base. Cotton fiber and silk production areas are located in the former Soviet republics.
Yevtukhov said that although most synthetic fibers currently need to be imported, domestic production in Russia has made considerable progress. For example, there are large-scale projects for the production of mixed fibers in Shakhty, Rostov region. However, the production of new fashion fabrics is still relatively backward.
Yevtukhov said: “Russia is a major producer of oil and natural gas, and there is a high possibility that we can successfully produce man-made fibers and yarns, including developing the production chain through the high-end petrochemical industry.”