Shipbuilding features strongly in Russia’s plans for Crimea


19 Mar 2014
Russia's plans for Crimea include development of shipbuilding

Russia's plans for Crimea include development of shipbuilding

Dmitry Rogozin, Russia’s first deputy prime-minister, has said that Russia is considering the establishment of large commercial shipbuilding along the Crimean coastline, writes Eugene Gerden.

"Crimea currently has several large ship repair and shipbuilding plants, which are located in Feodosia, Kerch and Sevastopol and which were among the largest during the Soviet times. We have already evaluated their potential and decided to establish production of some vessels and marine equipment at their capacities already this year”, said Mr Rogozin.

It is planned that initially the Crimean plants will focus on the implementation of government orders, moving at a later date, following the completion of modernisation, into commercial contracts.

Among the ship types planned for production are oil tankers, LNG carriers and offshore support vessels, associated with the development of Russian shelf and in particular the Arctic region.

Sevmorzavod, the largest shipbuilding plant in Sevastopol, is expected to be one of the Crimean enterprises which will receive Russian government financing.

According to Dmitry Belik, acting mayor of Sevastopol, Sevmorzavod was formerly the shipbuilding and ship repair base for the Russian Black Sea Fleet. At its peak, it employed more than 15,000 workers. 

In addition to shipbuilding itself, there are plans for the development of diesel engine manufacturing, as well as casting and galvanising. Further significant investment is expected in establishing propeller manufacturing, and production of other marine equipment.

Mr Belik said that the Crimean shipbuiulding plants will be repurchased from their current owners without any expropriation, and all current workers will be retained.

According to the Russian Ministry of Industry and Trade, the Crimean Peninsula is well placed geographically for the development of shipbuilding, with short winters and dry climate. An official representative of the Ministry said that in addition to state investments, part of the funds for the development of Ukranian shipbuilding may be provided by private Russian investors, some of which have already expressed an interest in the Crimean projects. Additionally, Russian metal producers have expressed their interest in developing Crimean shipbuilding.

There is a possibility that in due course the Crimean shipbuilding enterprises may become part of Russian shipbuilding monopoly United Shipbuilding Corporation.

In the meantime, in the light of recent events on Crimean Peninsula, the agreement ‘On joint development of shipbuilding by Russia and Ukraine for 2014 and 2015 years’, signed by the governments of the two countries at the beginning of 2014 will probably be terminated. Under the terms of the agreement Russia agreed to provide US$4billion for development of Ukranian shipbuilding, which was to be distributed among Ukraine’s largest shipbuilding plants.