Rostec will switch military concerns “citizen” in the Chinese example

Civil products

Wednesday, April 5, the state Corporation “rostec” will adopt the strategy of cluster development “Arms” by 2025, it follows from the theses of the program that was read . In the cluster “Armament” consists of the holding “Precision complexes”, concern “Kalashnikov” concern “Techmash”, Central research Institute (CNII) “Tochmash”, the holding “RT-himkompozit” and the scientific-production Association “Alloy”. It is planned that it will join the passed “assistance” in December 2015 Uralvagonzavod and the military division of the concern “tractor plants”.

According to the document, the revenues of holding companies and organizations of Rostec, part of the cluster, should be about 700 billion rubles by 2025 at annual growth of 12.1%. It is projected that net profit would exceed 50 billion rubles, According to the report of the state Corporation published on its website, the proceeds of cluster weapons in 2015 amounted to 207.8 U.S. billion, net profit of 25.8 billion rubles.

To reach these targets, rostec plans to increase the share of civilian products in the revenue cluster by 2025 in half — from 15 to 30%. While the document States that the enterprises in the cluster will not be able to reach the same revenues from the sale of civilian goods due to the specifics of manufactured goods. So, it is expected that eight years later, implementation of civil products will bring the holding “RT-Himkompozit” (creation of composite materials and special fibers) 80% of revenue, whereas now the figure is about 50%. As for the holding “Precision complexes” (produces including anti-tank and anti-aircraft missile complexes) of the same rate in 2025 will be 7% of revenues.

Rostec plans to sell industrial explosives, equipment for the enterprises of fuel and energy complex, refrigeration equipment, medical equipment, civil small arms, machine tools and composite materials. A special rate of Corporation makes sales of civil ammunition and firearms manufacturing concern “Kalashnikov”.

New models

The Corporation plans to increase revenue in the framework of military-technical cooperation with other countries. When promoting its military and civil products abroad “Assistance”, according to the strategy, should help to develop new models to customer requirements, introduction of new capacities, the transition to the full life cycle contracts (when the costs of the facility borne by the manufacturer) and opening service centers and licensed production.

Individual items of the strategy on the restructuring of the industrial base of the cluster. Rostec plans to create a single production base, improve logistics and implement the Japanese system of “lean production”.

In addition, enterprises in the cluster will receive the automated system of planning of purchases and the extended database of alternative suppliers. Will create an additional “intra-cluster competence centre”, which will plan and develop civil projects, integration of new assets into the structure of the cluster and of the Corporation as a whole. Who will manage this center and how wide will be its powers, the press service of “Rostec” did not answer, citing the confidentiality of the document.

The strategy also notes the need to increase the share of private investment in the production of civilian goods. As it will involve investments of theses strategies is unclear.

Moderate skepticism

As pointed out by the interviewed experts, eight years to implement such an ambitious plan — too short a time. “In order to refocus the company, need access to cheap loans. In Russia there are no Western banks limit our companies in lending, leaving only the Asian and Arab banks”, — says head of the Department of industrial Economics University. G. V. Plekhanov Andrey Bystrov. At the same time, the expert emphasizes, the companies of the cluster are unlikely to compete with Asian, including Chinese, manufacturers that set low prices for their products and construction, medical and other equipment. For reorientation requires not only money, but also qualified staff, and most importantly, technology, summarizes Bystrov.

If the volume of civil products “Rostec” will be difficult to compete with the existing in various civil markets competitors, said the Director of the Center for analysis of strategies and technologies Ruslan Pukhov. As an example, he points to the company Uralvagonzavod, which manufactures construction equipment. “Products of concern is in the middle, it falls short in quality to Western samples is expensive and costs more than the cheap Chinese equipment,” — says the expert.

In a more advantageous situation have included in “rostec” concern “Kalashnikov”, which is not focused on one type of goods. According to information on the website of the concern “Kalashnikov” produces not only small, but also sporting weapons, boats, civil ammunition, equipment and clothing.

Rostec is trying to go the way of the military-industrial Chinese companies, indicates senior researcher, Center for comprehensive European and international studies, HSE Vasily Kashin. “For 20 years, the Chinese defense industry increased its share of civil production in the ten largest corporations to 60-90%,” — says the expert. For lower strap 30% will require less time he predicted. But it is worth considering what kind of civilian products are to make corporations state Corporation. “In China, such products become vehicles, manufactured at the aircraft and tank factories, machinery, oil industry equipment and complex civil electronics,” explains Kashin. For the Russian defense industry such an important sector may become production for oil and gas production.