Over the past year, the leaders of the Urals defense industry have significantly increased their production volumes. But if the prospects for increasing the volume of supplies for manufacturers of aviation components are obvious, then manufacturers of ground equipment in the very near future can expect a decrease in the volume of military products.
The defense industry of the Russian Federation began to actively emerge from the financial crisis: the analysis of the top 20 largest Russian defense companies in terms of income in 2010, which was compiled by the Center for Analysis of Strategies and Technologies (CAST), shows positive dynamics. Of the Ural companies, four enterprises were included in the list: Ufa Motor-Building PO (UMPO), which is part of the United Engine-Building Corporation, ranks third; NPK Uralvagonzavod (UVZ) - sixth, Motovilikhinskiye Zavody group - 14th, Kurganmashzavod - 15th. The Ural Optical-Machine Plant (UOMZ) is located very close to the list: the military products of this plant play a key role. According to the results of 2009, the plant was at the end of the top twenty of the ranking, but the profit of 2010 was still not enough to stay in the top twenty (companies that had not previously disclosed information about themselves were included in the ranking).
The positive dynamics may seem to inspire some optimism. The rise in production volumes, in contrast to the crisis year of 2009, is shown by companies of all directions: both suppliers of complexes for naval weapons and aviation, and manufacturers of light and heavy armored vehicles. The growth of profits from exports has also become obvious (this, most likely, indicates that the domestic state defense order has fallen). But as the analysis of the data already completed, concluded and planned contracts shows, it indicates that for exporters of equipment for the ground forces, 2010-2011 has every chance of being the last recovery before a protracted decline. But for companies that work for the Air Force, the prospects are not so bleak. Everything is just gaining momentum with them.
The positions of the Ural manufacturers of components and complexes for marine and aviation equipment are quite stable. Although UMPO and UOMZ's profit from product sales increased, at the same time, the net profit of the former increased almost fourfold, the latter more than doubled.
The main profit of UMPO came from the export of arms. Three quarters of the contracts were concluded for the production of 108 engines for the AL-31 of various modifications. And also contracts for the maintenance of equipment were signed with the Air Forces of Vietnam, India, South Korea, Algeria and China. The contracts were concluded both directly and through Rosoboronexport and Russian aircraft manufacturers. For example, 30 fighters of the Su-27/30 family equipped with 60 AL-31F engines were exported from Russia for Indian aviation alone, each with an approximate cost of about $ 3 million. Supplies to the Russian market also increased: profit from the internal state defense order increased in 2010 by 911 million rubles.
UOMZ also increased production volumes. Mainly due to the growth in sales of special products (by 10% to 3 billion rubles). This growth is primarily due to an increase in the volume of aviation products (64%): aiming systems and optical location stations were exported either through the Sukhoi holding company or through the Irkut NPK. On the Russian market, an important event for the manufacturer was the transfer of four Ka-52 combat helicopters with Ural optics to the Russian Air Force.
Undoubtedly, in the next two years, the financial performance of UMPO and UOMZ will stabilize. Namely, the UOMZ portfolio of applications for four years at the beginning of 2011 amounted to approximately 16 billion rubles. This year, it is planned to deliver 16 Su-30MKI fighters to Algeria ($ 1 billion). Until 2012, it is planned to fulfill the contract for the supply of 12 Su-30MK2 fighters to Vietnam ($ 1.3 billion). It should also be taken into account that Rosoboronexport is participating in negotiations on the supply of a batch of Ka-52 and Mi-28 helicopters with Brazil. This information was provided by Anatoly Isaikin, General Director of Rosoboronexport. The only negative factor for both of these companies was the introduction of an embargo on military-technical cooperation with Libya in early 2011: it was planned to produce 12-15 Su-35 fighters for this country. The Ural plant was supposed to supply an aiming system for each fighter (each cost 1 million dollars), UMPO - 2 AL-31 engines.
The loss of markets in Libya for these Ural enterprises will not be a critical phenomenon: in 2011, the market for large domestic orders will become more active. Based on the estimates of the Ministry of Industry and Trade of the Russian Federation, in view of the conclusion of a contract between the Russian government and Sukhoi, the share of the state defense order at UMPO will grow to 40%, including products for the new Su-35 fighter. By 2015, the Russian Air Force must supply 48 such aircraft. This means that UMPO will manufacture 96 "117S products" for them - the improved AL-31F.
It should also be taken into account that by 2015 UMPO plans to increase the production of a larger share of components for TV-3-117 helicopter engines, as well as the latest version of VK-2500, which are installed on Mi24 / 28 and Ka-50/52. According to the project participants, by 2016 the demand for VK-2500 will be at the level of 2.5 thousand units. The cost of each is 210 thousand euros.
Sergey Maksin, General Director of PA UOMZ, in 2011 expects to increase production volumes by 2.5 times in the aviation sector. This increase is associated primarily with the start of serial production of the latest Ka-52 (Progress) and Mi-28N (Rostvertol) combat helicopters for the Russian army. In addition, UOMZ has successfully tested sighting and surveillance systems for naval ships. Now the company has in stock a full line of optical systems for various applications. Thanks to this, within the framework of the SDO, medium-term contracts were signed for the supply of optoelectronic systems for commissioned warships and auxiliary vessels, anti-sabotage boats with commissioning until 2013.
The growth of the positive dynamics of the profitability of the enterprises of the Urals defense industry complex could inspire some optimism. But analysis shows that this is a temporary phenomenon.
And how is the situation on the ground developing? NPK Uralvagonzavod came out of losses in 2009, but mainly due to the multiple growth in sales in 2010 of railway cars under contracts between Russian Railways and private customers. Revenues in the military sphere from the sale of products fell slightly: from 25, 3 to 22 billion rubles. During 2010, the last 20 T-90S tanks and about 160 assembly kits at the Avadi plant left the plant in India. The contract was estimated at 1.237 billion dollars for 223 vehicle sets and 124 tanks. In 2010, the Russian army also upgraded 200 T-72B tanks to the parameters of the T-72BA and purchased 63 new T-90A tanks.
In the long term, apparently, UVZ will keep its focus on civilian products on the domestic market the same, since the company does not have specific orders in the field of large military supplies for 2011. In fact, there are only three orders left. The first is the modernization and repair of one thousand T-72 tanks to the performance of the T-72M1M tank with a total cost of $ 500 million. This agreement was concluded in 2007 with Syria and is already coming to an end. The second contract refers to an agreement with India for 2011-2012, but only within the framework of providing components for the production of T-90 tanks, mainly engines from ChTZ-Uraltrak worth $ 77 million. The enterprise is a part of NPK UVZ. The third agreement was recently announced by Interfax. According to this publication, ten tank support combat vehicles (BMPT) will be delivered to Kazakhstan by the end of 2011. This is the latest development of UVZ. The Russian Ministry of Defense has no intention of buying it yet. Apparently, the implementation of the project will partially compensate for the end of large export tank contracts.
It is known that in relation to domestic supplies by the end of 2011, the leadership of the Russian Federation intends to spend 12 billion rubles on rearmament. Moreover, these funds will not be spent on the purchase of the T-90S tank, but on the improvement and overhaul of the outdated T-72. The military believes that upgrading the outdated T-72 to the T-90 level will be three times cheaper than purchasing a new one. The Defense Ministry, in turn, reported that the army expects that Uralvagonzavod will provide a fundamentally new tank called the Armata in two years.
The largest manufacturer of rocket and artillery multiple launch rocket systems in Russia, the Motovilikhinskiye Zavody group of enterprises in Perm, intends to develop and manufacture weapons under government orders and export contracts, and consider this to be one of the key areas of their activities. Therefore, based on the results of 2011, Motovilikha has planned to more than double its consolidated revenue compared to 2010. And in the future, by 2015, the company intends to increase the internal state defense order and reach the level of the times of the USSR, increasing the profitability of its weapons production to 60%. In the next four years, this is precisely why they intend to carry out a complete reconstruction of production here. To begin the development and production of artillery systems of 100 mm and 152 mm caliber (at the moment, production of 120 and 122 mm has been established). In 2010, the company also developed a lightweight version of the Smerch MLRS. The weight of the system has been reduced from 43.7 (the weight of the basic version) to 25 tons.
In 2011, the Russian Defense Ministry actually doubled the volume of state defense orders for Motovilikha. According to unofficial data, the cost of the special products planned for delivery is estimated at 2 billion rubles. Konstantin Makienko, a specialist at the Center for Analysis of Strategies and Technologies, believes that the growth in SDO volumes is primarily associated with the modernization and delivery of MLRS: "Which the Ministry of Defense intends to acquire this year."
The rise in the state defense order is, of course, a positive phenomenon. However, will the profit on it overlap the income from export deliveries? Until that time, the share of exports was 40%. Based on the reporting data for the past years, it is he who owns the main profit of Motovilikha. In 2009-2010, the plant exported Smerch multiple launch rocket systems to Turkmenistan and India. At the same time, a contract was signed for the export of six MLRS to Turkmenistan. But already throughout 2011, there are no data on new export deliveries.
According to experts, the worst situation is at Kurganmashzavod (KMZ). In 2010, the rise in profits from 3, 2 to 5, 6 billion rubles in the military sphere here is due to large export contracts (the plant supplied BMP-3 to Turkmenistan, Indonesia, Kuwait and Libya) and over the past 12 years, a large state defense order. There was a significant increase in the size of the state defense order (by 56%) thanks to export supplies against the state debt of the former USSR and the state loan of the Russian Federation, as well as a large order for the supply of BMP-3 to the Russian army. There was an increase in the volume of supplies to the domestic market of military products by 44%. Together with additional volumes of applications for the Ministry of Defense of Russia and under agreements with foreign countries, it was possible to fully ensure the workload of the enterprise in 2010, and also partially in 2011. But already in the future, KMZ has every chance of losing all sales markets and being left without profit. The bottom line is that in 2010 the enterprise failed to fulfill its contracts for the supply of ordered military equipment. The department of the department of army equipment of the machine-building and industrial group of the concern "Tractor Plants" (which includes KMZ) gave the following explanation: the order book for 2010 for BMP-3 was 314 units (75% of capacity), this is truly an unprecedented demand from the beginning production in 1997. But the suppliers of components let down: Barnaultransmash could not increase the supply of engines in any way - instead of 314 units of production it supplied only 200. Only by the beginning of 2011 Motovilikha mastered the production of 100-mm guns. As a result, the implementation of the state defense order also shifted by six months. This was followed by a delay in the implementation of the contract for the supply in 2011 of 10 BMD-4M vehicles and 10 unified BMD-4M armored personnel carriers based on BMD-4M for the Airborne Forces. According to the report of the commander of the Airborne Forces, Lieutenant-General Vladimir Shamanov, the Kurgan Machine-Building Plant did not guarantee that it would be able to produce them. As a result, Igor Barinov, deputy chairman of the State Duma Defense Committee, said in the middle of summer that they would no longer buy airborne and infantry combat vehicles at Kurganmashzavod. Of the new applications, KMZ has only the modernization of 135 BMP-3s, which have been in service in the UAE since 1991 (the contract value is $ 74 million). No deadline has been set, but one thing is known that the modernization process will take place in several stages. Kovrov Mechanical Plant says that by the end of 2010, drafts of several large export agreements have been prepared, the implementation of which is planned from 2011 to 2013. If these agreements are signed, a good prospect of stable work load of the enterprise is possible. However, there is still no complete clarity about this.
Possible prospects. Rosoboronexport experts argue that the conflicts in the Middle East did not prevent the export of Russian military products. According to him, in the first half of the year, the share of weapons for the ground forces amounted to 31% of total exports (the share of aviation products - 38%, air defense - 18%). Although earlier the share of arms deliveries for the ground forces did not exceed 20% per year. So all the Middle East revolutions have contributed to the increase in supply.
And yet, according to the results of the already concluded contracts, it follows that only manufacturers of components for the navy and aviation have every chance to rely on permanent orders. Why? The answer lies on the surface. One of the main proofs of this is that they are ready to provide the market with the latest models of military equipment. An example of this is the 117S UMPO engine. But the Armata tank with the latest tactical and technical characteristics of UVZ has been promising the military for almost 10 years.
