“Russian Shipbuilders Face Production Reductions Due to Sanctions and Lack of Foreign Spare Parts”

The shipbuilding corporation United Shipbuilding Corporation (USC) has been sanctioned since 2014, but it was only after February 2022 that its problems with sourcing foreign products and services became systemic, said a representative of the company, quoted by the American “The Wall Street Journal”.

USC is currently building 59 cargo ships. The company delivered 17 ships in 2020, 16 in 2021, but only four recently because propellers stopped being imported from Germany, the “WSJ” reports, citing sources familiar with the company’s orders.

In 2018, Igor Sechin, CEO of Rosneft, promised that in 2019 the production of the latest steering screws, a key element of the ship’s electric propulsion system, would start in Russia. They were produced by a joint venture of Rosneft and General Electric for large-capacity ships produced by the Zvezda shipbuilding complex. But on March 8, 2022, General Electric announced the suspension of its operations in Russia.

Sanctions for the war with Ukraine. Russian shipbuilders are running out of parts

Zvezda’s order book, whose main customer is Rosneft (it needs tankers, gas carriers, including ice carriers), includes more than 50 units. A significant part of the components for them was assembled before the imposition of sanctions and installed with the help of Korean partners, who then stopped cooperating with Russia.

In February this year, the Minister of Industry and Trade Denis Manturov instructed officials and the Registrar’s Office to refine the issue of creating a state program to support the construction of engines. There are no engines for large-capacity ships in Russia, and dozens of them are needed a year, even for the transport of oil. The development of this sector may cost over 100 billion rubles and take 10 years. Manturov promised 110 billion rubles for this purpose by 2025.

According to some directors, the Russian shipbuilding sector is facing the greatest challenge since the collapse of the Soviet Union, notes “WSJ”. Substitution of imports of at least some foreign components will be possible in a few years at most. And even if the shipyards have stocks of the necessary components, it is not always possible to install them without foreign specialists.