Overcoats and berets will save light industry

After joining the WTO, Russian clothing and footwear manufacturers rely mainly on defense orders. And a little - on the "package of measures to protect the light industry", which will be ready in January.

After Russia begins to live according to the WTO rules, domestic clothing and footwear will become completely uncompetitive in price, the Izvestia newspaper writes. According to the calculations of the Russian Union of Clothing Manufacturers, a decrease in import customs duties (from the current 10–20% to 5–7%) will lead to a decrease in the customs value of 1 kg of clothing by at least 14%. Accordingly, Russian producers will have to immediately lower prices for goods by the same 14-15%.

"Now the Ministry of Industry and Trade of Russia is working in the field of textile, clothing and leather and footwear industry with industry associations and unions to clarify and specify compensation measures, which in January 2012 will be sent to the Russian Ministry of Economic Development for submission to the Russian government," the ministry said. According to Izvestia, the main idea is to load light industry at the expense of the army, security forces and other structures that actively use uniforms. This is more likely an offer for the future: now the form is already sewn at Russian enterprises, but within four years foreign companies will be allowed to enter this market.

The fact that companies cannot survive without a government order is also recognized by market participants. “State subsidies will help us poorly. A defense order remains, ”says Alexandra Andrunakievich, Director General of the Russian Union of Leatherworkers and Shoemakers. According to the forecasts of several government departments, the total losses of light industry from joining the WTO in the next few years could be about $ 100 million. In 2012, the volume of textile and clothing production should fall by 25%, the production of footwear and leather goods - by 55%. Imports of light industry products will grow from year to year. So, in 2012, the growth will be 69%. Forecasts of market participants are completely pessimistic. According to the Russian Union of Leatherworkers and Shoemakers, footwear production could fall in 2012 by 10 times and amount to 10 million pairs. In 2011, Russia produced 100 million pairs. 350 million pairs of shoes were imported.

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The problems for footwear and textile workers will not arise due to the reduction of duties. Now, for example, the most massive import of footwear occurs in the segment of 300 rubles per pair (wholesale price). The fee is around € 1. When in mid-2012 it drops to 28 euro cents, this will not affect the final price in any way - the shoes on the shelf have cost and will continue to cost up to 1,2 thousand rubles per pair. “The entrance ticket to the market for foreign wholesalers will be reduced. Their profitability already exceeds 100%, while our producers are content with 8%, ”says Alexandra Andrunakievich. Domestic manufacturers of footwear and textiles will have to seriously revise their investment plans after Russia joins the WTO. The draft federal budget for 2012 envisages the allocation of subsidies for raw materials and materials to enterprises of the light and textile industries at 340 million rubles each during 2012-2014. For technical re-equipment, the government intends to allocate 125 million rubles each in 2012 and 2013 and 70 million - in 2014.

Market participants consider these figures insufficient. In 2010 alone, 7 billion rubles were invested in the industry. “For your understanding, only our company has invested 3 billion rubles in modernization in two years,” says Yury Yablokov, CEO of Nordtex Corporation. The final set of measures to protect light industries should be sent to the government in January 2012, the newspaper Izvestia writes.