Dmitry Shugaev: 'The state corporation already has a lot of experience in attracting international strategic partners: from Alliance Renault-Nissan to AvtoVAZ; Deimler to KAMAZ; the Italian Pirelli to Voronezh and the Kirov tire plants.' Source: Press photo
RBTH: Recently, the International Aviation and Space Salon MAKS-2013 ended in Zhukovsky near Moscow. What novelties did the corporation unveil at MAKS this year?
Dmitry Shugaev (D.S.): At MAKS-2013, Rostec’s holdings, which produce more than 80 percent of the component base for the Russian aircraft industry, presented almost their entire range of equipment that is used in modern aviation and space. This includes avionics, the newest spacecraft design items, various optical devices, aeronautical and space communications systems, as well as weapons for the air force and air defense, and more. For example, the Radio-Electronic Technology group [KRET] introduced new instruments for the fifth generation fighter PAK FA [T-50] and the world's most powerful radar system management "IRBIS-E" for the Su-35 fighter.
In addition, as part of its airshow business program, Rostec and its organization have concluded a number of cooperation agreements with Russian and international aircraft manufacturers. In particular, an agreement was signed with the Denel group of companies [from South Africa], Turbomeca, a French company, and the company Airbus.
The state corporation is also considering the possibility of creating a Russian joint venture in regional jets assembly, regarding which there were relevant agreements signed as part of the airshow. At the same time, Rostec, together with Diamond Aircraft Industries, has already launched a project to develop a new type of light aircraft with a capacity of 9–19 passengers.
RBTH: What are the priority markets for the corporation, in general, and for the novelties exhibited at MAKS-2013, in particular? What markets are seen as the most promising ones, which ones are developing most rapidly?
D.S.: Almost one-third of the enterprises’ production included the state corporation, is exported. The corporation has 50 overseas offices, which help to promote our products in more than 70 countries. Largely because of this, the Helicopters of Russia holding company, for example, already ranks first in the world for its sales of combat attack helicopters, and VSMPO AVISMA already supplies over 30 percent of the world’s demand of titanium—including 40 percent of Boeing’s demand, 60 percent of Airbus and 100 percent of Embraer. Overall, we are now focusing on increasing the share of corporation enterprises’ commercial production in the domestic and foreign markets.
RBTH: In addition to MAKS, what other showrooms and which channels are used to make cooperation with your partners possible?
D.S.: Contracts for the supply of the next generation Russian equipment are often made on the grounds of the world’s largest showrooms, such as the French Le Bourget, Farnborough, UK, Peruvian SITDEF, Dubai Airshow, the Russian HeliRussia and others. Rostec represents a single organizer of more than 20 exhibitions abroad, in the line of Russian military-technical cooperation. On these grounds, the state corporation is negotiating with international partners, after which joint ventures are often created. This, in turn, provides a transfer of innovative technologies to the Russian industry and expands Russian presence in the export markets.
The state corporation already has a lot of experience in attracting international strategic partners: from Alliance Renault-Nissan to AvtoVAZ; Deimler to KAMAZ; the Italian Pirelli to Voronezh and the Kirov tire plants. Rostec is also interested in developing relations with the state corporation’s current partner in the Helivert joint venture—the Anglo-Italian manufacturer AgustaWestland. In particular, there is a possibility of the company entering into the Helicopters of Russia holding capital through purchase or exchange of shares.
RBTH: What can you tell us about the main directions of the corporation’s cooperation with China, India and Latin America?
D.S.: We continue to develop partnerships with our colleagues in China, also by means of the Business Council of the BRICS countries. Atomic energy, civil rocket science, the export of helicopters and their after-sales service now appear among the perspective areas of cooperation. In addition, in February of this year, Rostec signed an agreement of intent with the Chinese company Polygroup on a joint venture for the production of machine tools for the metalworking industry and energy-saving lighting technology.
As for India, it is one of Russia's key markets of military and dual-use items. The state intermediary Rosoboronexport portfolio of orders is worth more than $ 6 billion. We are talking about contracts for the supply of a wide range of weapons for India’s air force, navy and army. In addition, Rostec continues to expand its cooperation with India through the creation of joint ventures. Several joint ventures have already been created only in terms of production and repair of arms and military equipment. For us, Latin American countries are a fast-growing and highly promising market for aircraft exports, as there are about 500 cars of Soviet and Russian origin in the region’s helicopter parking.
It is worth noting that Rostec has agencies abroad in Argentina, Brazil, Chile, Colombia, Cuba, Mexico and Peru. With the help of our representatives, Russian Helicopters has already sent several Mi-type machines and medium-sized multi-purpose Ka-62 helicopters to Brazil. At the same time, the contract for the supply of KA-62 is the first international contract of this kind for Brazil.
Rostec opened a service center for Russian civil helicopters of types Mi-8/17 and Ka-32 in South Africa. In addition, there are plans to build a regional center for after-sales services and repairs for all the helicopter models used in the South Sahara region on the grounds of the Denel Aviation company.
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