Translated material
Oil refining has conquered everyone
AK&M rating agency has identified the most efficient sectors of the economy
Russian oil refining turned out to be the leader in the efficiency rating of industrial sectors prepared by the AK&M Rating Agency based on the results of 2007. The agency's experts compiled a rating based on Rosstat data for a number of private indicators by ranking published data (profitability of goods, products, works sold, growth rate of enterprise turnover, profit growth rate, share of profitable enterprises) and calculated values (labor productivity calculated as turnover enterprises to the number of employees).Despite high rates of economic growth for almost a decade, the inefficiency of the Russian economy remains an obvious problem. In February of this year, delivering a keynote speech at an extended meeting of the State Council , Vladimir Putin outlined it in the harshest terms: “The main problem of today's Russian economy is its extreme inefficiency. Labor productivity in Russia remains unacceptably low. The same labor costs as in the most developed countries bring in Russia several times less return. And this is doubly dangerous in the context of growing global competition and increasing costs of skilled labor and energy resources.” Speaking about the economic development strategy for the period until 2020, Putin said that only the implementation of an innovative development scenario will make it possible to achieve a dramatic increase in labor productivity, and in the main sectors of the economy, at least a fourfold increase in this indicator should be achieved over 12 years.
Judging by the results of the rating, industries that are in one way or another related to the extraction and processing of resources operate most efficiently. At the same time, as experts from the AK&M Rating Agency note, oil refining managed to reach a leading position in 2007 solely due to very high labor productivity: the number of employees in the industry is relatively small, while its turnover is one of the largest among all sectors of the refining complex. A significant increase in turnover in 2007 was ensured by a rapid increase in prices for petroleum products on the foreign and domestic markets, as well as an increase in export supplies (by 16.4% in monetary terms compared to 2006). At the same time, the industry's leadership was not affected even by the fact that the rate of profit growth in the industry was relatively low.
In the metallurgical sector, labor productivity at the end of the year was almost four times lower than in oil refining, but this industry took second place in the ranking. This became possible due to the rapid growth of turnover, as well as due to a decent increase in profits. Rating Agency experts note that in the fourth quarter of last year, many metallurgical plants reduced their profits, but due to the high indicators of the first half of the year, the final result turned out to be quite satisfactory.
Both top-ranking industries are in the manufacturing sector. Oil refining and metallurgy managed to outperform both mining sectors, which took third and fourth positions in the ranking. In 2007, the extractive industries for the most part did not demonstrate high production growth rates, but managed to maintain high levels of efficiency indicators solely due to very high prices for raw materials. Suffice it to say that the price of Brent oil at the end of 2007 was 60% higher than at the end of 2006. Also during this time, prices for all non-ferrous metals, coal and other raw materials increased significantly.
A relatively good result was observed in the engineering industries. In any case, two of the three engineering industries were included in the top ten most efficient industries. In 2007, these industries demonstrated high growth rates in turnover and profits.
At the same time, the most inefficient industry remains textile and clothing production. This industry is one of the few that decreased profits in 2007. The problem of textile production remains high competition in the domestic market, which does not allow it to significantly increase turnover. In addition, labor productivity in this industry remains at the lowest level among all industries.
In 2008, according to experts from the Rating Agency, due to rising prices for raw materials and labor costs and import pressure in the context of a weakening dollar, there may be an increase in the costs of enterprises in the processing industries and a decrease in their profitability. As a result, manufacturing industries, in particular mechanical engineering, may decline in their positions. At the same time, given the favorable forecasts for hydrocarbon prices and the growing demand for metals, oil and gas production and metallurgy will most likely continue to set the vector for the development of the Russian economy.
Rating methodology
For each indicator, the position of the industry on a standardized scale of values (from 0 to 100) was determined, that is, a private rating was calculated. The integrated rating of industry efficiency was determined by summing the values of private ratings with weighting coefficients.
Rating of efficiency of Russian industrial sectors based on the results of 2007
| 1. | Production of coke and petroleum products | 28.3 | 16174.2 | 80.4 | 101.5 | 127.1 | 67.79 |
| 2. | Metallurgical production | 36.8 | 4117.9 | 76.4 | 117.1 | 121.0 | 50.88 |
| 3. | Extraction of fuel and energy minerals | 31.1 | 5970.5 | 70.0 | 128.7 | 113.2 | 39.16 |
| 4. | Extraction of mineral resources, except fuel and energy | 33.6 | 1626.5 | 71.6 | 113.8 | 116.5 | 36.47 |
| 5. | Production of electrical equipment, electronic and optical equipment | 10.2 | 1081.7 | 84.0 | 141.3 | 123.2 | 32.72 |
| 6. | Manufacturing of machinery and equipment | 9.4 | 935.4 | 82.1 | 130.1 | 134.0 | 31.23 |
| 7. | Production of rubber and plastic products | 8.1 | 2257.6 | 80.3 | 69.4 | 154.5 | 31.01 |
| 8. | Production of finished metal products | 8.6 | 1168.3 | 80.8 | 169.6 | 127.9 | 30.18 |
| 9. | Production of leather, leather goods and footwear production | 6.9 | 836.9 | 83.3 | 145.0 | 122.0 | 28.28 |
| 10. | Chemical production | 19.7 | 1903.6 | 70.8 | 138.8 | 120.5 | 25.35 |
| 11. | Production of cellulose, wood pulp, paper, cardboard and products made from them | 13.0 | 2177.1 | 77.7 | 107.7 | 116.4 | 25.34 |
| 12. | Wood processing and production of wood products | 9.6 | 966.5 | 68.3 | 310.0 | 130.8 | 24.33 |
| 13. | Production of vehicles and equipment | 6.6 | 1330.3 | 77.5 | 148.3 | 127.0 | 22.81 |
| 14. | Electricity generation, transmission and distribution | 7.4 | 3307.6 | 74.7 | 126.6 | 126.0 | 21.57 |
| 15. | Production of food products, including beverages, and tobacco | 10.5 | 1886.2 | 71.6 | 123.5 | 125.7 | 17.99 |
| 16. | Textile and clothing production | 4.9 | 560.4 | 71.5 | 80.7 | 115.3 | 5.29 |
Source: RA AK&M according to Rosstat