“We combined everything we could”
The head of "Oboronprom" on the situation in the engine and helicopter
In recent years, Russia has actively begun to increase deliveries of helicopters and engines for both internal needs and for export. The head of the Oboronprom corporation ANDREY REUS told in an interview with Kommersant about how the relationship with the Ministry of Defense is developing and what strategy has to be used to consolidate on the world market.
- In the military-industrial complex, there was a tendency towards cooperation of enterprises in holdings. It happened with the "Oboronprom". Did you support this idea?
- I was directly involved in the development of the strategies in which this integration was carried out. It was in 2004 – 2007, when I served as deputy minister of industry and energy and oversaw engineering and defense industry as well. The development and implementation of a strategy for such cooperation was our response to the guidance of the country's leadership on the formation of industrial policy as such. Up to this point, the thesis that the best industrial policy is its absence has dominated.
- Is this the right way for engineering?
- I am convinced that we are oriented correctly. My work at Oboronprom for the last five years has convinced me that both financial, organizational, and political tools have played a decisive role in the revival of engineering. In the global helicopter industry, for example, there are five recognized players: Sikorsky, AgustaWestland, Eurocopter, Bell and Boeing. Now Russian Helicopters have joined this kind of club. But at the beginning of 2000-s of the Russian helicopter as a global business factor did not exist. Yes, there were several separate factories that struggled for survival and produced extremely small amounts of equipment. The share of Russian helicopters at that time was estimated at three percent, and about 80 helicopters were produced annually. We just stopped noticing!
The starting conditions for the competition between us and our foreign partners were initially different. The competitors of Russian Helicopters, as holdings that were finally formed in the post-war period, were already serious world players by the time the USSR collapsed. This, incidentally, also applies to the situation in engine building, where the United Engine Corporation (UEC) will have to start competing with such giants as General Electric, Pratt & Whitney, Safran, Rolls-Royce. Therefore, if you want to become on a level with the leaders, then you need to concentrate intellectual, production, financial, human potential in a very short time and create a structure that can be accepted into this elite club. We have formed a company that has become the third largest helicopter sales volume in terms of money in eight years. Russian Helicopters already occupy 14% of the market in value terms and are recognized by the world's leading companies as a real player. In my opinion, such a policy, at least by the example of helicopter construction, has demonstrated its effectiveness. She must continue to develop.
- In this environment, competition is possible?
- As our experience has shown, it is difficult, but possible. I believe that it is only in such a competitive environment that it is possible to form an effective structure capable of creating new products, carrying out modernization, and developing a service system. It concentrates sufficient intellectual potential and competencies that allow the company to develop along with global trends.
- You do not agree that the creation of such holdings reduces competition within the country and thereby slows down the pace of development?
- This is clinical nonsense! In modern engineering there is only global competition. All the leading players in aircraft manufacturing, helicopter engineering and engine building almost always represent one country and one company. And we were invited to create several structures in our country that would compete with each other. And what would we do with this? That none of them would be a player in the world market and, in the end, would be absorbed by the world leader. We, due to consolidation on the move, received synergy around 15% to efficiency gains.
- Only through consolidation?
- Of course, we were very lucky with the helicopter industry: after all, we had very talented designers, excellent engineering schools. Thanks to their backlog, we managed to make a breakthrough fairly quickly. Now we have the necessary resources to develop new products. We combined everything we could to achieve a specific goal. There was simply no other chance to enter the world market. He was the only one. And we used it.
- Now there is a dispute about the orientation of industrial enterprises in the domestic or foreign markets. What is the proportion in the production of "Oboronprom"?
- Now this proportion is shifting towards internal order. A few years ago the ratio was 70 percent on 30 in favor of shipments abroad. Now the ratio of export products and domestic leveled and became parity.
Long-term contracts with the Ministry of Defense, with which we signed large and strategically important contracts up to 2020, played an important role in the growth of internal order. The defense order is up to 30% of the volume of our products. At the same time, we by no means want to lose the external market, because this is an indicator of the status of a company. If your products are bought on the world market, it means that consumers trust you. In general, Russian Helicopters are growing from year to year, and quite quickly: in 2011, we released 265 machines, and in 2012 we are going to increase the number to 300 units.
- This is real?
- This is a serious leap. But in the development strategy of Russian Helicopters both the necessary resources and the ways to accomplish such a task are defined. By 2015, the company should generally reach the level of 400 machines.
- A few weeks ago, the Ministry of Defense announced a tender for light helicopters. From the conditions of the tender it is clear that this will not be “Ansat” or Ka-226T, but some kind of foreign analogue. Your opinion?
- When a government agency actually leads a country of a direct competitor of its own manufacturer - this is unpleasant news. Russian Helicopters has the necessary technologies in this segment, in particular, the Ansat and Ka-226T you named. We offered them to the Ministry of Defense. We constantly keep in control the situation with their production and are ready to get together as much as possible and after a while put this equipment not only for the Ministry of Defense, but also on the market. I would add that the world practice of relations between the military and industry shows the need to include R & D in the defense order.
- And in what condition is the Ka-226?
- Ka-226 is a working machine. It is produced and sold. There is also the Ka-226T, which will start mass production soon. We attracted Vnesheconombank's investment loan, concentrated the design and production resources for this project, equipped the car with the French Arrius engine. In this regard, the Indian tender for 197 light helicopters is extremely important to me. A direct competitor in this tender from Ka-226T is just one of the Eurocopter machines (AS-550 Fennec.- “Ъ”), which the Defense Ministry plans to purchase.
- What, in your opinion, are the chances of Russia in this tender?
- I think it is very high. This machine (Ka-226T.– “Ъ”) on 100% meets all the technical conditions of the tender.
- Do you have plans to establish a joint venture with Eurocopter?
- Various joint projects were discussed with Eurocopter, but none of them went into life because of contradictions in the development strategies of our companies. But we are focused on cooperation with world leaders in those segments that will make us stronger. The creation of a joint venture itself is a difficult question. For example, the creation of a joint venture with AgustaWestland took us 2,5 years of work. And only this year we will start making the first AW 139 machines, and then AW 119. Compared to our volumes, the output of these machines is not so significant, but cooperation was important to us. We train staff in accordance with modern business standards, we learn modern production organization and after-sales service. Of course, we will expand the localization of production. But given that we are focused on the global market, localization for me is what we can do for the whole world, in which we are competitive.
- Let's remember what happened to the state defense order in 2011 year. You then signed the first long-term large-scale contracts. How many machines Ka-52 will be purchased by the Ministry of Defense?
- The order of 140 units.
- Problems with contracting?
- Negotiations with customers are always rather tough. The question often rests on profitability. I believe that engineering is not a place where super profits are made. The planned rate of return should be higher, as it allows the industry to develop and invest in new products. But under the contract for Ka-52, I believe the conditions were acceptable. For us, the long-term relationship was important, because a five- or seven-year contract is an opportunity to immediately conclude long-term contracts with suppliers and packers simultaneously. This is a completely different economic model, as a clear pricing formula appears. And if there is an understanding of the price, then there is an opportunity to hold it.
- What will you sign with the Ministry of Defense in 2012?
- Now a number of documents are being prepared for signing, both for engine-building and, in addition, for helicopter-related topics. In the engine industry, as previously in the helicopter industry, we are moving to long-term contracts. This year, our collaboration is much faster than in the past. Now we are discussing an additional agreement on the delivery of the Mi-35. In total, up to 2020, we plan to supply the military about a thousand helicopters.
- We are currently actively developing the fifth-generation fighter, the PAKFA. Who will be the main engine developer for it?
- The UEC structure is being built on the basis of the divisional principle: the energy division was created earlier, and at the end of last year, the divisions of helicopter engines and engines for combat aviation. It is in the latter that all management of the project for creating an engine for PAKFA is concentrated. The basic design bureau for this project was the Lyulka Scientific and Technical Center. But in fact, this project has become cooperative within the framework of the UEC and it includes factories in Ufa, Rybinsk, Moscow. Salyut, which is already a de facto member of the UEC, is also very active in this cooperation.
- Have there been any complaints from the Sukhoi Civil Aircraft (GSS) on the engines for SSJ-100?
- There is no aircraft manufacturer that would not scold the engine manufacturer. JDC is in close contact with the GSS for the supply of engines. There were problems, for example, with SaM146 certification periods, but these are problems of any new product. Now approved the schedule of delivery of engines for virtually every car.
Although the program SaM146 for us, to put it mildly, is not effective in terms of money. That is why we will raise the issue of subsidizing this project. This is a normal world practice: to bring a new engine to a given cost price, we need some help from the state. It, of course, is having it now, but we must understand that a long period of time is needed to bring a new car to the market and self-sufficiency.
- How much time must pass to break-even point?
- By that starting order for SaM146, which we have is about seven years.
- The draft decree on the entry of "Salute" in the UDC is now in a high degree of readiness for signing. Do you think Ukrainian Motor Sich should be included in the UEC?
- We work with Motor Sich on the basis of five-year contracts, we have a number of joint programs, for example, on the engine for the Mi-26. Is it interesting to us as a company? Yes. But now we are not negotiating the purchase, although the question was previously worked out.
- What was the key reason for the refusal?
- The price of the issue. We will not make a purchase for the sake of purchase.
- What is the condition of the NK-93 engine now?
- JDC works in the existing market conditions: there is demand - there will be supply. We did not find any demand for NK-93. KLA is not planning to use this engine on aircraft being developed and operated. The NK-93 engine was developed as an alternative to the PS-90А type engine for the Il-96-Т and Tu-330 aircraft. But the plans of aircraft manufacturers issue of these types of aircraft is not provided.
With NK-93, I see the very case when the results obtained during the implementation of OCD on this engine will become the basis of the scientific and technical potential and can be used in the development of promising engines of medium and large traction for passenger and cargo or military transport aircraft. But I will emphasize that the UEC in this case acts as a set-up and will proceed from the needs of aircraft manufacturers.
- Is the integration of enterprises in the engine industry relevant?
- The answer to this question is obvious. We collected all the intellectual and production resources of the industry, enterprises stopped fighting among themselves and began to work in world markets. A single engineering center already operates in the UEC, which unites design personnel of all enterprises of the holding. The corporation has already compiled a list of major projects that should ensure the competitiveness of domestic products on world markets in the next 40 – 50 years. This is a project of the PD-14 engine family, an engine for PAKFA and a promising high-speed helicopter, a gas turbine installation for "small energy". Industrial policy is innovative in nature, it is aimed at supporting such projects, and this greatly facilitates this work for us. We plan that by 2020, the JDC should be fixed in the top five world leaders.
- Does the government help your businesses?
- State aid for some enterprises was, one can say, decisive: about ten factories were on the verge of bankruptcy. But the tools of industrial policy — direct investment in authorized capital, subsidizing interest rates, state guarantees on loans, etc. — made it possible to stabilize the situation and begin normal development, technical re-equipment and modernization of production. Almost all of our breakthrough projects - PD-14, a promising high-speed helicopter (PSV), engine for the PAK FA - are funded from the budget of targeted programs. In particular, 400 million rubles. were sent to the PSV project, 2,5 billion rubles — to the Mi-38 project, 652 million rubles — to the Ka-62 project, about 14 billion rubles — to the PD-14 project.
- What is the state of the contract with the United States for the delivery of the 21 th Mi-17B5 helicopter to Afghanistan? How many cars are delivered?
- The contract is executed in accordance with the conditions, nine units have already been delivered to the place of deployment. This is a sign for the business community, a kind of certificate of recognition that our equipment is of very high quality.
- How did our helicopters manifest themselves in India? Was the customer satisfied?
- When the customer is unhappy, he does not buy. Even sometimes you can hear the opinion that in India, China, other countries can sell anything. This is not true! Indian and Chinese partners, for example, are very careful about the selection of equipment and arms procurement. In general, I can say that India and China are our strategic partners. The contract for the delivery of X-NUMX helicopters Mi-80B17 to India already in progress through Rosoboronexport is in progress, we are participating in a tender for light helicopters with our Ka-5T, a joint venture for the service of helicopters and an engine assembly plant under license.
- Which countries, in your opinion, are most important for Russia as partners? Now and in the future?
- Was and is India. Now, after a break, we began to increase the supply of helicopters to China. Traditionally we supplied a lot of engines: now the volume of deliveries is gradually growing. In 2012, we plan to reach the milestone of $ 2 billion in deliveries to this country.
- What equipment is delivered?
- Last deliveries are a contract for 32 units Mi-171. We also supply Ka-32А11ВС, which is also bought from us by Indian customers.
- What is the relationship with Latin America?
- Yes, this is a very important market for us. We fought for him for a long time. Rosoboronexport supplies Mi-35M. From the civil technology "Helicopters of Russia" began to deliver there Mi-8 / 17 and Ka-32А11ВС. It plays into the hands of the fact that in Brazil the principle of "open sky" operates, including over large cities. Now this question is being worked out in China and India. The density of use of helicopter technology will increase, which greatly expands our capabilities.
- And the market of Southeast Asia?
- I would single out Vietnam.
- Is it possible to create a joint venture with China?
- We are considering the proposals of the Chinese side on the joint production of current helicopters in China, discussing the joint design and production of a heavy machine. In addition, a helicopter service center is being completed in Qingdao province. Speaking about the creation of an international network of service centers, I would like to emphasize that in our work with consumers we are switching to a new business logic. The demand for our technology is determined not only by the characteristics of the product itself, but also by the availability of an affordable and efficiently working service system. Therefore, we are learning to build a business on the sale of the entire product life cycle.
- Have you had any negotiations with Saudi Arabia?
- There were no deliveries of civilian equipment to this country. Rosoboronexport, as far as I know, negotiated with Saudi Arabia for the supply of military helicopters.
- Now the government has allocated about 3 trillion rubles to support the defense industry. How much will you get?
- Through the various federal programs in 2012, about 10 billion will be spent on projects and programs of Oboronprom. In total, in the period from 2013 to 2015, it is planned to receive about 40 billion rubles a year.
- take loans?
- have to. In state banks, annual rubles in rubles cost in 7 – 10%, in currency - 8 – 12%. But in the USA, Great Britain, Germany and France our competitors receive long-term loans at 2 – 4% per annum. Real competition requires financial conditions no worse than those of competitors. When the price of money in the domestic and global financial markets is different, our engineering begins to lose in competition.
- In the near future, will you change the structure of Oboronprom?
- In the "Helicopters of Russia" fundamental changes occurred last year, and they were connected with the company's IPO. Russian Helicopters switched to IFRS, independent directors were introduced to the board of directors. And even despite the fact that the placement did not take place, Russian Helicopters today operate as a public, open company. In the UEC, structural changes, as I have already said, were associated with the transition to a divisional control system. If we talk about new types of business, here we need to mention the subject of unmanned aerial vehicles, which we are developing using the technologies of the Israeli company IAI. We see the prospect of this market.
- What are the financial indicators of Oboronprom for 2011 a year?
- The revenue of Oboronprom as a holding structure amounted to 229 billion rubles, net profit - 15 billion rubles. In the 2011 year, for the first time, engine-building was breaking even.
- And what indicators do you plan for this year?
- At least 15 percent growth we will give. By 2015, we must make products and provide services for 500 billion rubles. I promised this to Vladimir Putin during the MAKS-2011 exhibition.
- What is the relationship with the rocket and space industry? Earlier, the head of Roscosmos, Vladimir Popovkin, said that engine-building is in crisis.
- Works on space issues remain one of the most stable areas of UEC activity. Over the last two years, Roskosmos has significantly increased orders at our Samara site. I believe that we are sufficiently concentrated to fulfill all the requirements of Roscosmos.
- Would you like to get other plants for yourself, for example, for the production of space engines?
- There is a certain logic in this. We have a team of crisis managers. Ten years ago, Oboronprom was created as a kind of business incubator, which from disparate enterprises forms an effective business organization capable of competing in world markets. The example of "Helicopters of Russia" and UEC is a confirmation of this. We are not asking for this job. But if we are assigned to manage these plants, we can handle it.
In recent years, Russia has actively begun to increase deliveries of helicopters and engines for both internal needs and for export. The head of the Oboronprom corporation ANDREY REUS told in an interview with Kommersant about how the relationship with the Ministry of Defense is developing and what strategy has to be used to consolidate on the world market.
- In the military-industrial complex, there was a tendency towards cooperation of enterprises in holdings. It happened with the "Oboronprom". Did you support this idea?
- I was directly involved in the development of the strategies in which this integration was carried out. It was in 2004 – 2007, when I served as deputy minister of industry and energy and oversaw engineering and defense industry as well. The development and implementation of a strategy for such cooperation was our response to the guidance of the country's leadership on the formation of industrial policy as such. Up to this point, the thesis that the best industrial policy is its absence has dominated.
- Is this the right way for engineering?
- I am convinced that we are oriented correctly. My work at Oboronprom for the last five years has convinced me that both financial, organizational, and political tools have played a decisive role in the revival of engineering. In the global helicopter industry, for example, there are five recognized players: Sikorsky, AgustaWestland, Eurocopter, Bell and Boeing. Now Russian Helicopters have joined this kind of club. But at the beginning of 2000-s of the Russian helicopter as a global business factor did not exist. Yes, there were several separate factories that struggled for survival and produced extremely small amounts of equipment. The share of Russian helicopters at that time was estimated at three percent, and about 80 helicopters were produced annually. We just stopped noticing!
The starting conditions for the competition between us and our foreign partners were initially different. The competitors of Russian Helicopters, as holdings that were finally formed in the post-war period, were already serious world players by the time the USSR collapsed. This, incidentally, also applies to the situation in engine building, where the United Engine Corporation (UEC) will have to start competing with such giants as General Electric, Pratt & Whitney, Safran, Rolls-Royce. Therefore, if you want to become on a level with the leaders, then you need to concentrate intellectual, production, financial, human potential in a very short time and create a structure that can be accepted into this elite club. We have formed a company that has become the third largest helicopter sales volume in terms of money in eight years. Russian Helicopters already occupy 14% of the market in value terms and are recognized by the world's leading companies as a real player. In my opinion, such a policy, at least by the example of helicopter construction, has demonstrated its effectiveness. She must continue to develop.
- In this environment, competition is possible?
- As our experience has shown, it is difficult, but possible. I believe that it is only in such a competitive environment that it is possible to form an effective structure capable of creating new products, carrying out modernization, and developing a service system. It concentrates sufficient intellectual potential and competencies that allow the company to develop along with global trends.
- You do not agree that the creation of such holdings reduces competition within the country and thereby slows down the pace of development?
- This is clinical nonsense! In modern engineering there is only global competition. All the leading players in aircraft manufacturing, helicopter engineering and engine building almost always represent one country and one company. And we were invited to create several structures in our country that would compete with each other. And what would we do with this? That none of them would be a player in the world market and, in the end, would be absorbed by the world leader. We, due to consolidation on the move, received synergy around 15% to efficiency gains.
- Only through consolidation?
- Of course, we were very lucky with the helicopter industry: after all, we had very talented designers, excellent engineering schools. Thanks to their backlog, we managed to make a breakthrough fairly quickly. Now we have the necessary resources to develop new products. We combined everything we could to achieve a specific goal. There was simply no other chance to enter the world market. He was the only one. And we used it.
- Now there is a dispute about the orientation of industrial enterprises in the domestic or foreign markets. What is the proportion in the production of "Oboronprom"?
- Now this proportion is shifting towards internal order. A few years ago the ratio was 70 percent on 30 in favor of shipments abroad. Now the ratio of export products and domestic leveled and became parity.
Long-term contracts with the Ministry of Defense, with which we signed large and strategically important contracts up to 2020, played an important role in the growth of internal order. The defense order is up to 30% of the volume of our products. At the same time, we by no means want to lose the external market, because this is an indicator of the status of a company. If your products are bought on the world market, it means that consumers trust you. In general, Russian Helicopters are growing from year to year, and quite quickly: in 2011, we released 265 machines, and in 2012 we are going to increase the number to 300 units.
- This is real?
- This is a serious leap. But in the development strategy of Russian Helicopters both the necessary resources and the ways to accomplish such a task are defined. By 2015, the company should generally reach the level of 400 machines.
- A few weeks ago, the Ministry of Defense announced a tender for light helicopters. From the conditions of the tender it is clear that this will not be “Ansat” or Ka-226T, but some kind of foreign analogue. Your opinion?
- When a government agency actually leads a country of a direct competitor of its own manufacturer - this is unpleasant news. Russian Helicopters has the necessary technologies in this segment, in particular, the Ansat and Ka-226T you named. We offered them to the Ministry of Defense. We constantly keep in control the situation with their production and are ready to get together as much as possible and after a while put this equipment not only for the Ministry of Defense, but also on the market. I would add that the world practice of relations between the military and industry shows the need to include R & D in the defense order.
- And in what condition is the Ka-226?
- Ka-226 is a working machine. It is produced and sold. There is also the Ka-226T, which will start mass production soon. We attracted Vnesheconombank's investment loan, concentrated the design and production resources for this project, equipped the car with the French Arrius engine. In this regard, the Indian tender for 197 light helicopters is extremely important to me. A direct competitor in this tender from Ka-226T is just one of the Eurocopter machines (AS-550 Fennec.- “Ъ”), which the Defense Ministry plans to purchase.
- What, in your opinion, are the chances of Russia in this tender?
- I think it is very high. This machine (Ka-226T.– “Ъ”) on 100% meets all the technical conditions of the tender.
- Do you have plans to establish a joint venture with Eurocopter?
- Various joint projects were discussed with Eurocopter, but none of them went into life because of contradictions in the development strategies of our companies. But we are focused on cooperation with world leaders in those segments that will make us stronger. The creation of a joint venture itself is a difficult question. For example, the creation of a joint venture with AgustaWestland took us 2,5 years of work. And only this year we will start making the first AW 139 machines, and then AW 119. Compared to our volumes, the output of these machines is not so significant, but cooperation was important to us. We train staff in accordance with modern business standards, we learn modern production organization and after-sales service. Of course, we will expand the localization of production. But given that we are focused on the global market, localization for me is what we can do for the whole world, in which we are competitive.
- Let's remember what happened to the state defense order in 2011 year. You then signed the first long-term large-scale contracts. How many machines Ka-52 will be purchased by the Ministry of Defense?
- The order of 140 units.
- Problems with contracting?
- Negotiations with customers are always rather tough. The question often rests on profitability. I believe that engineering is not a place where super profits are made. The planned rate of return should be higher, as it allows the industry to develop and invest in new products. But under the contract for Ka-52, I believe the conditions were acceptable. For us, the long-term relationship was important, because a five- or seven-year contract is an opportunity to immediately conclude long-term contracts with suppliers and packers simultaneously. This is a completely different economic model, as a clear pricing formula appears. And if there is an understanding of the price, then there is an opportunity to hold it.
- What will you sign with the Ministry of Defense in 2012?
- Now a number of documents are being prepared for signing, both for engine-building and, in addition, for helicopter-related topics. In the engine industry, as previously in the helicopter industry, we are moving to long-term contracts. This year, our collaboration is much faster than in the past. Now we are discussing an additional agreement on the delivery of the Mi-35. In total, up to 2020, we plan to supply the military about a thousand helicopters.
- We are currently actively developing the fifth-generation fighter, the PAKFA. Who will be the main engine developer for it?
- The UEC structure is being built on the basis of the divisional principle: the energy division was created earlier, and at the end of last year, the divisions of helicopter engines and engines for combat aviation. It is in the latter that all management of the project for creating an engine for PAKFA is concentrated. The basic design bureau for this project was the Lyulka Scientific and Technical Center. But in fact, this project has become cooperative within the framework of the UEC and it includes factories in Ufa, Rybinsk, Moscow. Salyut, which is already a de facto member of the UEC, is also very active in this cooperation.
- Have there been any complaints from the Sukhoi Civil Aircraft (GSS) on the engines for SSJ-100?
- There is no aircraft manufacturer that would not scold the engine manufacturer. JDC is in close contact with the GSS for the supply of engines. There were problems, for example, with SaM146 certification periods, but these are problems of any new product. Now approved the schedule of delivery of engines for virtually every car.
Although the program SaM146 for us, to put it mildly, is not effective in terms of money. That is why we will raise the issue of subsidizing this project. This is a normal world practice: to bring a new engine to a given cost price, we need some help from the state. It, of course, is having it now, but we must understand that a long period of time is needed to bring a new car to the market and self-sufficiency.
- How much time must pass to break-even point?
- By that starting order for SaM146, which we have is about seven years.
- The draft decree on the entry of "Salute" in the UDC is now in a high degree of readiness for signing. Do you think Ukrainian Motor Sich should be included in the UEC?
- We work with Motor Sich on the basis of five-year contracts, we have a number of joint programs, for example, on the engine for the Mi-26. Is it interesting to us as a company? Yes. But now we are not negotiating the purchase, although the question was previously worked out.
- What was the key reason for the refusal?
- The price of the issue. We will not make a purchase for the sake of purchase.
- What is the condition of the NK-93 engine now?
- JDC works in the existing market conditions: there is demand - there will be supply. We did not find any demand for NK-93. KLA is not planning to use this engine on aircraft being developed and operated. The NK-93 engine was developed as an alternative to the PS-90А type engine for the Il-96-Т and Tu-330 aircraft. But the plans of aircraft manufacturers issue of these types of aircraft is not provided.
With NK-93, I see the very case when the results obtained during the implementation of OCD on this engine will become the basis of the scientific and technical potential and can be used in the development of promising engines of medium and large traction for passenger and cargo or military transport aircraft. But I will emphasize that the UEC in this case acts as a set-up and will proceed from the needs of aircraft manufacturers.
- Is the integration of enterprises in the engine industry relevant?
- The answer to this question is obvious. We collected all the intellectual and production resources of the industry, enterprises stopped fighting among themselves and began to work in world markets. A single engineering center already operates in the UEC, which unites design personnel of all enterprises of the holding. The corporation has already compiled a list of major projects that should ensure the competitiveness of domestic products on world markets in the next 40 – 50 years. This is a project of the PD-14 engine family, an engine for PAKFA and a promising high-speed helicopter, a gas turbine installation for "small energy". Industrial policy is innovative in nature, it is aimed at supporting such projects, and this greatly facilitates this work for us. We plan that by 2020, the JDC should be fixed in the top five world leaders.
- Does the government help your businesses?
- State aid for some enterprises was, one can say, decisive: about ten factories were on the verge of bankruptcy. But the tools of industrial policy — direct investment in authorized capital, subsidizing interest rates, state guarantees on loans, etc. — made it possible to stabilize the situation and begin normal development, technical re-equipment and modernization of production. Almost all of our breakthrough projects - PD-14, a promising high-speed helicopter (PSV), engine for the PAK FA - are funded from the budget of targeted programs. In particular, 400 million rubles. were sent to the PSV project, 2,5 billion rubles — to the Mi-38 project, 652 million rubles — to the Ka-62 project, about 14 billion rubles — to the PD-14 project.
- What is the state of the contract with the United States for the delivery of the 21 th Mi-17B5 helicopter to Afghanistan? How many cars are delivered?
- The contract is executed in accordance with the conditions, nine units have already been delivered to the place of deployment. This is a sign for the business community, a kind of certificate of recognition that our equipment is of very high quality.
- How did our helicopters manifest themselves in India? Was the customer satisfied?
- When the customer is unhappy, he does not buy. Even sometimes you can hear the opinion that in India, China, other countries can sell anything. This is not true! Indian and Chinese partners, for example, are very careful about the selection of equipment and arms procurement. In general, I can say that India and China are our strategic partners. The contract for the delivery of X-NUMX helicopters Mi-80B17 to India already in progress through Rosoboronexport is in progress, we are participating in a tender for light helicopters with our Ka-5T, a joint venture for the service of helicopters and an engine assembly plant under license.
- Which countries, in your opinion, are most important for Russia as partners? Now and in the future?
- Was and is India. Now, after a break, we began to increase the supply of helicopters to China. Traditionally we supplied a lot of engines: now the volume of deliveries is gradually growing. In 2012, we plan to reach the milestone of $ 2 billion in deliveries to this country.
- What equipment is delivered?
- Last deliveries are a contract for 32 units Mi-171. We also supply Ka-32А11ВС, which is also bought from us by Indian customers.
- What is the relationship with Latin America?
- Yes, this is a very important market for us. We fought for him for a long time. Rosoboronexport supplies Mi-35M. From the civil technology "Helicopters of Russia" began to deliver there Mi-8 / 17 and Ka-32А11ВС. It plays into the hands of the fact that in Brazil the principle of "open sky" operates, including over large cities. Now this question is being worked out in China and India. The density of use of helicopter technology will increase, which greatly expands our capabilities.
- And the market of Southeast Asia?
- I would single out Vietnam.
- Is it possible to create a joint venture with China?
- We are considering the proposals of the Chinese side on the joint production of current helicopters in China, discussing the joint design and production of a heavy machine. In addition, a helicopter service center is being completed in Qingdao province. Speaking about the creation of an international network of service centers, I would like to emphasize that in our work with consumers we are switching to a new business logic. The demand for our technology is determined not only by the characteristics of the product itself, but also by the availability of an affordable and efficiently working service system. Therefore, we are learning to build a business on the sale of the entire product life cycle.
- Have you had any negotiations with Saudi Arabia?
- There were no deliveries of civilian equipment to this country. Rosoboronexport, as far as I know, negotiated with Saudi Arabia for the supply of military helicopters.
- Now the government has allocated about 3 trillion rubles to support the defense industry. How much will you get?
- Through the various federal programs in 2012, about 10 billion will be spent on projects and programs of Oboronprom. In total, in the period from 2013 to 2015, it is planned to receive about 40 billion rubles a year.
- take loans?
- have to. In state banks, annual rubles in rubles cost in 7 – 10%, in currency - 8 – 12%. But in the USA, Great Britain, Germany and France our competitors receive long-term loans at 2 – 4% per annum. Real competition requires financial conditions no worse than those of competitors. When the price of money in the domestic and global financial markets is different, our engineering begins to lose in competition.
- In the near future, will you change the structure of Oboronprom?
- In the "Helicopters of Russia" fundamental changes occurred last year, and they were connected with the company's IPO. Russian Helicopters switched to IFRS, independent directors were introduced to the board of directors. And even despite the fact that the placement did not take place, Russian Helicopters today operate as a public, open company. In the UEC, structural changes, as I have already said, were associated with the transition to a divisional control system. If we talk about new types of business, here we need to mention the subject of unmanned aerial vehicles, which we are developing using the technologies of the Israeli company IAI. We see the prospect of this market.
- What are the financial indicators of Oboronprom for 2011 a year?
- The revenue of Oboronprom as a holding structure amounted to 229 billion rubles, net profit - 15 billion rubles. In the 2011 year, for the first time, engine-building was breaking even.
- And what indicators do you plan for this year?
- At least 15 percent growth we will give. By 2015, we must make products and provide services for 500 billion rubles. I promised this to Vladimir Putin during the MAKS-2011 exhibition.
- What is the relationship with the rocket and space industry? Earlier, the head of Roscosmos, Vladimir Popovkin, said that engine-building is in crisis.
- Works on space issues remain one of the most stable areas of UEC activity. Over the last two years, Roskosmos has significantly increased orders at our Samara site. I believe that we are sufficiently concentrated to fulfill all the requirements of Roscosmos.
- Would you like to get other plants for yourself, for example, for the production of space engines?
- There is a certain logic in this. We have a team of crisis managers. Ten years ago, Oboronprom was created as a kind of business incubator, which from disparate enterprises forms an effective business organization capable of competing in world markets. The example of "Helicopters of Russia" and UEC is a confirmation of this. We are not asking for this job. But if we are assigned to manage these plants, we can handle it.
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