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Visit to Rostselmash plant

February 1, 2018, Rostov-on-Don

Vladimir Putin learned about the enterprise’s activities, toured the tractor and harvester assembly floors and looked over some of the plant’s finished products.

In addition, Vladimir Putin was shown a training simulator of a grain harvester, which replicates the machine’s cabin, with a computer screen for a windshield.

The head of state also saw the monitoring system, which gathers various data from each machine in real time.

Later, Vladimir Putin saw the latest addition to Rostselmash’s line, the Torum 785 harvester, and talked with workers while on the floor.

Rostselmash is a group of companies, with 13 enterprises located at 10 industrial sites in four countries. The holding produces more than 150 models and modifications of 24 kinds of equipment, including grain and forage harvesters, tractors, forage machinery and grain-processing equipment.

* * *

President of Russia Vladimir Putin: Good afternoon. I congratulate you on the new machines; they look more beautiful each time.

Remark: Mr President, good afternoon. During your visit in 2009, the plant was in a difficult situation; all the warehouses were full.

Vladimir Putin: It was in 2008, I think.

Remark: In 2008, and later in 2009. I was a worker then, but I saw everything from outside. I would like to thank you for the support you gave us.

In 2017, we reached the highest historical level in our production, surpassing the 2008 results. We produced 6,500 combines and tractors in total last year. I would like to ask what you think about our plant, our company and our machines.

Vladimir Putin: On the whole, I have already said what I think about your plant. First, this is a leading plant in the industry. Second, it is true that I came here in 2008 and again in 2009, and during that visit it was impossible to drive through here or even to walk, because it was filled with machines nobody was buying.

We also faced the international financial crisis; this crisis came to us from abroad, but everyone worried a great deal, because what could we do about it? There was a risk that the plant would shut down completely.

Back then, if you were working here at that time, a part-time working week had already been introduced, and there were problems with salaries. That is why we, working together with your management, tried to look for a way to help the plant and the entire industry right there, on this spot.

We made a lot of decisions than. I remember I was Prime Minister at the time, and I was heavily criticised because in some part these decisions about the plant and the industry were not very liberal, not oriented towards the market. However, I do not think we violated any international agreements, including in the framework of the World Trade Organisation.

In such conditions, almost any state and any country thinks, first of all, about its producers and jobs inside the country, not about promoting jobs abroad. So, we did this deliberately.

Sales volumes have recently increased by 230 percent, and not just by a couple of percentage points. This is serious business. Part of production facilities are relocated from abroad, and the shareholders are saying it is more profitable to produce here than abroad.

You know, I was very pleased to hear this because it means that the entire system of incentives that we have introduced and are still introducing is being used and is working. And we will continue to do this in the future. This is the second thing.

The third aspect is vitally important. Everyone is aware of the sanctions and counter-sanctions. We have closed our market to agricultural produce from countries that have imposed sanctions on us. What did this lead to? This has had some rather undesirable consequences.

At the first stage, the prices for agricultural produce increased. Unfortunately, this was inevitable. But agricultural producers started developing rapidly later on. And what happened then? The entire chain, including the farming machinery sector, began to grow. Your director is saying openly that there is high demand.

Agricultural producers are growing; they are earning more and consuming more, including your goods. The processing sector began growing immediately and rather quickly. In effect, this is an entire sequence of real positive consequences. And, of course, all this is really great.

Just recently, no one bought your goods on the domestic market, not even the companies that had the money to do it. Everyone wanted to buy equipment abroad. And now you are selling equipment to 37 countries. If this trend persists, you will be selling it to 60 or 65 countries. I have read some reference materials during the flight here. This is an aggressive policy, in a positive sense, and it shows your very good development prospects. Therefore, I want to congratulate you once again.

Remark: Mr President, our company has managed to expand equipment production rates. This was made possible by a programme of state incentives for agricultural commodity producers. First, we would like to thank you for financing this programme in sufficiently large volumes throughout 2017.

Vladimir Putin: 23 billion …

Remark: But there is one question. Only two billion in annual allocations are stipulated for 2019 and 2020.

Vladimir Putin: But this does not amount to real-life funding that will be allocated. These are preliminary budget estimates for the second and third years of the budget cycle. To be honest, we have come here to review and discuss all these issues. But this will not be limited to two billion.

Question: Mr President, is it possible to develop this programme for five to six years?

Vladimir Putin: It would be better if we could develop it for five or six years ahead. What obstacles are there? For now, we are holding back the inflation rate. Last year, it was 2.5 percent. In the first one and a half months of this year it is expected to be close to zero. This is excellent.

But we do not know what happens next with the global markets and currency fluctuations – not only our currency but others too – and other macroeconomic indicators. We can plan whatever we want but we do not know if it is feasible.

If we manage to maintain the current macroeconomic indicators, if everybody, including you as a manufacturer, gets accustomed to that (and it still takes some getting used to), then we can expand our planning horizon further. But overall, you are right, it is what we should strive for.

Remark: Still, we would like to ask for the funding to come in faster. Then our equipment will be in demand and we can enter more markets.

Vladimir Putin: What is your name?

Remark: Viktor.

Vladimir Putin: Viktor, you should come with us to the meeting and tell this to the Finance Minister.

Remark: Absolutely. (Laughter)

Vladimir Putin: In any case, I will communicate your request. I agree with you on most points. Of course, the planning horizon should be wider and you should be able to plan around the available support.

Alexander Romanchuk: Mr President, my name is Alexander Romanchuk. I have a question. Our company offers a programme under which employees can receive an interest-free loan from Rostselmash to make initial instalment under the mortgage because it is very difficult for a young family to save up for the initial instalment. Partner banks also offer discount mortgages to Rostselmash employees but they are limited to a fixed interest rate.

Vladimir Putin: How much is it?

Alexander Romanchuk: The minimum interest rate is 9.5 percent provided that…

Vladimir Putin: Are you married?

Alexander Romanchuk: Not yet.

Vladimir Putin: I want to give you a piece of advice. The women here are very beautiful. This is the first point.

Second. As soon as you get married you should have a child and then you will get financial support. If you have two or three children, you can rely on a mortgage interest rate not higher than 6 percent. Everything above that will be paid by the Government. We have just approved this programme, I have mentioned it several times. It was introduced on January 1.

In addition, there is a state subsidy programme for young families aged under 35. There are also regional programmes. I am sure there is something in the Rostov Region too. You just need to find out about all the opportunities.

Question: Mr President, I would like to ask why child benefits are paid until the child is 1.5 years old while children are only accepted to kindergartens from the age of two?

Vladimir Putin: It is true, there is a gap; but we also have launched a new programme to create places in day nurseries for children aged from two months to three years.

We have been following this problem carefully. It is true that it is important for young women, for women with children, to have a chance to begin working as soon as possible so they do not lose their skills or can restore them.

This is why this is a programme with multiple goals: it is designed to support young families, families with children, and, frankly speaking, to support demographic processes to encourage families to have children.

This is why we now have a lot of children aged from two months to three years on waiting lists at the moment. The number is very easy to remember: 272,255. I think it is the number as of January 1, I hope it is higher now, it must be. This was the number when we were developing this programme. You will have the opportunity to benefit from it. That is the first point.

Second. We have expanded the areas where maternity capital can be used. Now this money can be allocated for pre-school education, including, first of all, day nursery or even private childcare, either entities or individuals working in this field. There will be more opportunities.

Question: Mr President, I have a question. Why is the petrol price growing? It is 40 rubles now…

Vladimir Putin: Yes, yes, I know. It is 39 in some regions. It is because of the excise duty, of course. First, the price for the primary product is rather high right now, almost $70 per barrel. But this is not the main reason, the excise duty is. The Government raises the excise duties, which should be used and are used for road maintenance and construction, this is why.

You see, of course everyone would like to have this price lowered. Today it seems like there is a chance to do this, but the price is indeed high in some regions, and it is for a reason, because it is difficult to ship the product there, there is no infrastructure or it is underdeveloped and so on. The Federal Antimonopoly Service always has to keep an eye on it, always. I will discuss this with Mr Artemyev, who is the head of this service.

Question: Mr President, can we take a picture with you?

Vladimir Putin: Yes, of course.

* * *

Question: Today we have received good news from the Court of Arbitration for Sport. Twenty-eight of our athletes have been cleared of accusations. Many have already commented on this. May I ask you to say a few words on the matter?

Vladimir Putin: In any legal system, a court is the highest authority, and court rulings must be respected by everyone. But a court usually considers at least two points of view, of the two contesting parties, and although the court ruling was, of course, excellent news and confirmed our argument that the overwhelming majority of our athletes are completely clean, it is not the only thing to respect.

We must also respect the other side’s views. Therefore, I think we should not fall into euphoria but stay calm and be respectful of the organisations that passed respective decisions earlier. We must take into account that, first of all, we are happy for the athletes who were cleared by the CAS. Still, not all of them were granted appeals. This is the first point.

Second. We have things to improve, too, this is certain. We still need to enhance our anti-doping programme and policy. We will continue to pursue this along with WADA, the IOC and other international bodies.

Remark: Thank you.

Vladimir Putin: My congratulations to you once again and good luck. I will be honest with you, I am very pleased to see what I see here. When we visited back in 2008 and 2009, we had great concerns. There was a real risk that the company would shut down, which would have hit the entire industry.

But it did not happen. On the contrary, your hard work, your talents and efforts turned the situation around. As it was just said, 41 percent of the 10,000 employees (a huge team) have university degrees. And many of those with degree holders do blue collar jobs. This is really great.

When people with higher education degrees do blue collar jobs it means that the equipment is becoming more advanced and complex. It means they feel needed here, which is great news and an excellent indicator of progress and future prospects.

I wish you all the best. Good-bye.

February 1, 2018, Rostov-on-Don