Putin Backs $2.7Bln Chemicals Program

Prime Minister Vladimir Putin on Monday lent his support to a plan to spend 63 billion rubles ($2.7 billion) through 2015 to boost the country's chemical industry, mainly serving the needs of the military, aviation and nuclear energy sectors, in an effort to end their dependency on imported materials.

Speaking at a Presidium meeting on Monday, Putin said Russia had lost vital technologies and production capacity to manufacture defense-related chemical materials.

"As a result, we found ourselves dependent on foreign suppliers in such a sensitive sphere as the defense industry," Putin said, as the Presidium was considering a proposal by the Industry and Trade Ministry aimed at developing the country's chemical sector.

Putin said the program, which foresees the creation of 200 chemistry enterprises, employing 10,000 people, by 2015 would free the country's defense industry from reliance on imports.

A government source, speaking on condition of anonymity because of the classified nature of some of the projects described in the federal program, said that one of the program's priorities was to create laboratories and plants to develop and produce carbon-fiber composites that are used in aircraft manufacturing.

A senior Industry and Trade Ministry official, who also spoke on condition of anonymity, citing the need for secrecy, said that in the 1980s the Soviet Union and the United States were the leaders in composite materials research, but after the collapse of the Soviet Union most of the production facilities in the sector were in Kazakhstan.

Currently, companies in Japan and the United States produce the best composite materials, but they refuse to sell them to Russia, which consequently has to buy carbon fiber of an inferior quality from other countries, the official said.

Under the program, the Industry and Trade Ministry is the main contractor for the Federal Space Agency, the Federal Agency for Science and Innovations and state corporations Rosatom and Russian Technologies.

The government will develop another federal program to support the production of components for the defense industry, Putin promised Monday during a visit of the Moscow-based Avangard plant.

Avangard is a part of the country's biggest defense company, Almaz-Antei, which produces anti-aircraft missile systems. Almaz-Antei's general director, Vladislav Menshchikov, complained to Putin on Monday that after the disintegration of the Soviet Union many enterprises producing components for the defense industry were left in other former Soviet republics, while prices for domestically produced components are growing rapidly.