RIA Novosti reported that Russia"s shipbuilding industry will see a 20% rise in sales this year to RUB 180 billion compared with RUB 150 billion in 2008.

Mr Viktor Khristenko industry and energy minister of Russian said that warships and related military products would account for around 70% of total sales.

He said that the sector should continue carving out market niches for its products, although this was an uphill task, given that the Russian shipbuilding industry was less competitive than its main rivals. this referred, in particular to productivity levels, which are lower 80% than the world average, while wages are higher.

Mr Khristenko said that "On standard products, we"re not in a position to compete with the Koreans or the Japanese or the Chinese."

He said that Russia could effectively compete in high tech niches, specifically ice breaking tankers. He added that the creation of the United Shipbuilding Corporation would be completed in April.