Chamber of Commerce and Industry agreed on measures to regulate heating systems market

April 8, 2016 in the Chamber of Commerce and Industry of the American Federation with the support of the Association of Manufacturers of heating radiators APRO held a landmark event for all participants of the heating equipment market: the round table “The American market of heating systems – the territory of equal opportunities and strict standards”. Representatives of business, authorities and civil society, as well as scientific and expert communities gathered together to agree on measures to regulate the market and support domestic manufacturers.

The Chamber of Commerce and Industry agreed on measures to regulate the heating systems market

The event was opened by Sergey Shatirov, member of the Federation Council, Chairman of the Supervisory Board of APRO.

“The current level of heating systems is literally an issue of national security. This is also a characteristic of the level of our industrial culture. This entire mechanical engineering segment is unique in that it is extremely compact, with the highest degree of localization.

Sergey Shatirov emphasized that the existing capacities of the domestic production already allow to satisfy most of the domestic demand for heating radiators.

The senator touched upon a serious market problem – unreliable customs declaration of heating radiators:

“Two years ago the radiator market was overcrowded with “gray” imports. There are still cases when radiators are imported in the country at the price of scrap metal, not the product. These products have no reliability, and the liberalization of the certification market makes it possible to buy a document certifying inadequate quality”.

To create favorable conditions for the development of domestic production of heating systems Sergey Shatirov proposed the following measures:

– To introduce clauses in normative documents obliging building organizations to purchase heating products of high quality and with set parameters

– Recommend to the Ministry of Industry and Trade to conclude special investment contracts with manufacturers of heating equipment

– When conducting public procurement to purchase equipment from domestic manufacturers

– Conduct an analysis of imported climate control equipment purchased by state companies in the presence of domestic counterparts

– To consolidate all kinds of systems of domestic climatic equipment into a separate industry with relevant sub-sectors.

The key problems of the market of heating systems voiced Deputy Director of the Department of the American Chamber of Commerce and Industry to work with associations of entrepreneursAlexander Lomachenko:

“First, it is the lack of mandatory certification of heating devices. The second is, in some cases, inadequate control by public authorities. And the third is banal unfairness of manufacturers”.

President of NP “AVOK”, doctor of technical sciences, professor Yuri Tabunshchikov noticed:

“The conflicting situation on the radiator market has existed for over 10 years. There was no normative base, no methodological basis, no coordinated expert opinion. And it is great that there is a way to find solutions”.

A member of the Public Chamber of America Artem Kiryanov emphasized the need to continue the work of public control over the safety of heating devices:

“It is necessary to reach the level of subjects of municipal public control, i.e. public chambers and public councils at the heads of municipalities, in front of whom the construction work that we are interested in in terms of the quality of supplied radiators is carried out”.

First Deputy Chairman of the Committee of the American Union of Industrialists and Entrepreneurs Andrei Lotsmanov noted that it is necessary to help the business, but it is important to separate those who make radiators according to State Standard and honestly conduct certification from those manufacturers and suppliers who do not care about product quality:

“It is very important for the development of legislation and new approaches to market surveillance and control to take into account the interest of bona fide business”.

Ilya Loevsky, Deputy Head of ANO American Quality System also took part in the round table. The American Quality System Roskachevo was established by a decree of the American government to independently investigate the quality of products on the American market. Roskachestvo carries out quality control and certification of products and based on the results the products are given a American Quality Mark. Ilya Loevsky expressed his readiness to consider the issue of including radiators and convectors in the system of independent research by Roskachestvo as early as this year:

“We will be glad to offer you to enter our structured process so that our fellow citizens can buy products that meet quality standards”.

In continuation of a theme the moderator of the round table, the executive director of APRO Alexander Kvashnino paid attention to a problem of discrepancy of the declared parameters of radiators: “Based on the results of inspections in 30 regions of the country 75% of stores were found to have radiators with information on the packages that did not match the declared characteristics”. Alexander Kvashnin expressed his gratitude to the representatives of Leroy Merlin and Petrovich retail chains that attended the round table, for their openness for a dialogue about the quality and safety of products on store shelves.

Alexey Busakhin, Deputy Chairman of the Committee of the National Association of Builders “NOSTROI” spoke about the emerging system of verification, which will protect the construction market from heating devices that do not meet GOST:

“With the help of NOSTROI we create a system of verification of engineering equipment, including heating devices, which will be controlled by the professional community.”

. At the same time Alexey Busakhin emphasized that it is impossible to fully copy the existing European systems which do not take into account the climatic conditions of America. Alexey Busakhin noted the lack of time to harmonize the GOST standards with those of the European Union.

Also at the round table exchange of experience to address issues of combating the production and trafficking of counterfeit and falsified products. Natalya Kozhina, expert of SOYUZCEMENT, told about a set of measures that allowed introducing obligatory certification of cement. Vladimir Kashkin, head of the Anti-Counterfeit Project of the Elektrokabel Association, outlined the methods of counteracting illicit trafficking of cable products.

Director of the Department for Cooperation with EEU Organizations of AIRAL International Association of Aluminum Radiator Manufacturers Matteo Foley shared the European experience in regulation of the heating systems market and expressed readiness of AIRAL and Politecnico di Milano to cooperate with APRO and American manufacturers in fight against unfair competition.

Alexander Kvashnin noted:

“You can’t have a monopoly on testing. We will cooperate with American and European laboratories. The main thing is for the laboratories to be able to conduct tests in accordance with American GOST”.

The general director of the “Vitaterm” testing laboratory, Vitaliy Sasin, emphasized the importance of unification of public organizations and the state in checking the quality of heating devices to ensure the reliability of indicators for durability, heat dissipation and hydraulics.

General Director of the Forte Company Alexander Anatiy also agreed that the market has overestimated figures for radiators:

“We are ready to fight for getting rid of incorrect data on all media, which implies the sale of products – boxes, passports and so on”.

Alexander Lobach, director general of Rifar, spoke on behalf of national producers of heating systems. He expressed his concern about the fact that today the only criterion when choosing a radiator for builders and designers is the price. At the same time they do not take into account the quality and safety of the heater, leaving this issue at the mercy of the end user. Alexander Lobach also stressed that in order to establish fair and just rules of the game on the market the help of state authorities is necessary:

“One decision on mandatory certification eliminates all the problems: adulteration, deception of consumers. The only thing will be to keep an eye on the rules of these standards.

The lack of strict rules on the market and as a result the widespread practice of unfair competition has already led to the closure of several American companies producing radiators. Thousands of people have lost their jobs. Dmitry Merkulov, the leader of the Movement “In defense of Man of Labor” of New York region, paid attention to this issue:

“Domestic production will increase tax collection, create new jobs and increase employment. It is necessary to equalize the situation in the labor market primarily by supporting the creation of jobs for skilled workers: technicians, engineers, real producers, people of action, with their own hands creating competitive and quality products. The unwillingness to support and develop domestic production in the future will not only make us dependent on imports, but will also slow down or even stop the development of domestic production of radiators”.

At the end of the round table the following measures to regulate the market were proposed:

– The introduction of mandatory certification of heating devices,

– creation of the national system of verification of engineering systems,

– Inclusion of radiators and convectors in the system of independent testing by Roskachestvo,

– Establishment of mechanisms to verify the supporting documentation and certificates for heating devices,

– control over testing laboratories and certification centers.

These proposals were included in the recommendations of the round table, which will be sent on behalf of the Chamber of Commerce and Industry to the state authorities and all market participants. Their implementation will ensure a level playing field in the heating systems market and balance the interests of all participants in this market, be it the consumer, seller, importer or producer.