Military Review

Alignment on its

Russia slowed down arms exports for its own army

As a result of 2013, Russia once again increased its exports of armaments and military equipment, but relative to previous years, the rate of increase in supply volumes somewhat slowed down. The main reason for this was the implementation of the State Arms Program of Russia. The overwhelming majority of the production capacities of enterprises of the military-industrial complex are currently engaged in meeting the needs of the Russian military. This situation will persist over the next three to four years, after which the “braking” of exports will gradually cease.

Last year, the volume of deliveries of Russian weapons and military equipment for export amounted to 15,7 billion dollars. In early February of this year, this indicator was announced by the deputy director of the Federal Service for Military-Technical Cooperation of Russia, Vyacheslav Dzirkaln. Of this amount, 4,78 billion dollars fell on the supply of military equipment of India, the main Russian buyer of weapons. A little earlier, Rosoboronexport CEO Anatoly Isaikin announced that, through the state-owned company, the export of weapons and military equipment amounted to 13,2 billion dollars.

“Today, the only full-fledged exporter of military equipment and weapons is the state-owned company Rosoboronexport.”
In terms of export of equipment, Rosoboronexport slightly exceeded the planned figures, which for the last year were determined at the level of 13 billion dollars. The growth in military exports has increased over the past few years. So, in 2012, Russia's total military exports amounted to 15,16 billion, in 2011-m - 13,2 billion, in 2010-m - 10 billion, and in 2009-m - 8,8 billion. In terms of exports, Russia traditionally ranks second after the United States. Moreover, in terms of the quantity of weapons supplied, and not in terms of their value, Russia can confidently give the first place: the price / quality ratio has always been a strength of the Russian defense industry.

Supplies of Russian weapons and military equipment in 2013 were carried out in 60 countries of the world, six of which accounted for 75 percent of total military exports. In the next few years, export volumes will be able to be maintained at the level of 13 billions of dollars and the threshold of 14 billions are unlikely to be crossed. We are talking about the supply of finished weapons through Rosoboronexport. According to Isaikin, only after the enterprises of the military-industrial complex complete the main supplies of military equipment to the Armed Forces of Russia, the volume of military exports will exceed 15 billions of dollars.

On the basis of all these indicators, several pleasant conclusions can be made at once, the first of which is the intensive re-equipment of the Armed Forces of Russia.

The first conclusion is the intensive re-equipment of the RF Armed Forces

Until the second half of the 2000s, our Armed Forces received such an insignificant amount of new technology that it is even embarrassing to talk about it. The current state armament program of Russia before 2020, adopted in 2011, provides for the cost of upgrading the Armed Forces in the amount of 23 trillion rubles. Three trillion of them will be directed to sensitive research and development work. The document provides for the supply of the Air Force over 1,5 thousands of new aircraft, a hundred surface and submarine ships, upgrading existing equipment and so on. Thanks to the state program for the 2020 year, the share of new technology in the country’s weapons should increase to at least 75 percent, and in some branches of the military, to a hundred percent, for example, in the Strategic Missile Forces.

Alignment on itsThe conclusion about the favorable impact of the State Weapons Program is also indirectly confirmed by a recent study of sales volumes prepared by the Stockholm Peace Research Institute (SIPRI). At the beginning of February of this year, this institute announced the rating of one hundred of the largest defense companies in the world, counting their sales for 2012. According to the study, sales of weapons and military equipment of the largest companies in the world have declined over the past few years. The sales of weapons and military equipment of the hundred largest defense companies in the world at the end of 2012 amounted to 395 billion dollars, having decreased by 4,2 percent compared to the previous year. In 2011, the drop is 6,6 percent compared to a year earlier. In many ways, this is facilitated by the continuation of the global financial and economic crisis and the reduction of military spending undertaken by many countries. In 2012, one more reason added to these reasons - at the end of 2011, the United States left Iraq, reducing the volume of arms purchases. Nevertheless, sales of defense enterprises by 29 percent exceeded the figures for 2003 of the year.

In the ranking of the hundred largest defense companies, 42 represents American companies, which in 2012 accounted for 58 percent of the total sales of all counted enterprises. Another 30 companies - European, their share in total sales - 28 percent. The SIPRI list also included six Russian enterprises (not counting Sukhoi, which included but did not receive a place in the rating, since the company is a part of the United Aircraft Building Corporation (UAC), in the present study), whose sales two years ago amounted to 19,6 billion dollars or 4,9 percent of the total volume of military-made products rating implemented by participants. For comparison: a year earlier, Russian enterprises sold weapons on 15,2 billion dollars. Here we are talking about the total sales of companies both on the external and on the domestic market.

All the Russian defense enterprises on the list showed a significant increase in sales, surpassing 20 percent. The only exception is the United Aircraft Corporation, its sales compared with 2011-m increased "only" by 40 million dollars - to 4,44 billion. According to SIPRI, the growth in sales of Russian enterprises was due both to success in the arms export market and to substantial domestic orders. According to Rosoboronexport, in 2012, export contracts were signed for a total of 17,6 billion dollars. To this can be added an internal order, which is closely approaching a trillion rubles.

SIPRI specialists are confident that it was thanks to the State Weapons Program that Russian enterprises were able to show such a significant increase in sales, which will continue in the coming years. From 2016, Russia will adopt a new state armament program for the period up to 2025.

In general, the largest volume of sales among Russian companies was shown by the Almaz-Antey Air Defense Concern, which sold 2012 billion dollars in military products in 5,51. Compared to 2011, this company has risen eight lines in the SIPRI ranking and took the 14 rank. According to the Stockholm Institute, the company from Russia took such a high position in the ranking for the first time since 2002, when Russian enterprises were included in the list. In 2011, Almaz-Antey sold military products for a total of 3,86 billion dollars. KLA in the list dropped one place and took 18-e place with sales, as already mentioned, 4,44 billion dollars (4,4 billion - a year earlier).

Holding "Helicopters of Russia" in 2012 year sold military equipment on 3,52 billion dollars, rising from 35-th to 25-th place. A year earlier, the result of this company was 2,74 billion dollars. The growth of indicators was facilitated by the purchase of US Mi-17 helicopters for Afghanistan and a large contract with Iraq for the supply of Mi-28HE, as well as dozens of military equipment of the Russian Air Force. United engine corporation took the 38-place in the ranking, having risen to 11 positions for the year. Its sales amounted to 2,5 billion dollars, an increase of 2011 billion compared to 1,56. Although this company (as well as Russian Helicopters) is part of the Oboronprom holding, it participates in the rating as an independent company, since SIPRI could not find open sales data for the parent company.

United Shipbuilding Corporation sold military equipment for 1,95 billion dollars (1,57 billion in 2011-m) and took the SIPRI 46-place (57-e - a year earlier). Finally, military sales of Uralvagonzavod in 2012 amounted to 1,63 billion dollars. This company was in the ranking on the 53-th place, rising immediately to the 14 lines. A year earlier, the company's sales were 1,2 billion dollars.

In general, it can be assumed that the outlined trend of reduction in sales of Western companies will continue. Formerly, the USA was the largest buyer of new weapons and military equipment of these enterprises. But now the United States has introduced austerity, gradually reducing military spending and abandoning various procurement programs. At the same time, the Russian Ministry of Defense continues to increase the volume of purchases of military equipment as enterprises modernize their production facilities. Together, these factors suggest that by the end of 2013, Russian companies in the rating will significantly improve their positions. For example, the same "Almaz-Antey", if it does not enter the top ten of the world's largest "defenders", then in any case, as close as possible to it.

Conclusion two - attention to after-sales service

The second conclusion that can be made by studying data on Russia's military exports over the past few years is that the country has finally begun to pay more attention to the after-sales service of equipment and weapons. This conclusion follows from the general functioning of the system, which began to take shape in the 90-ies and was finally formed by 2007. To make this conclusion clearer, it is necessary to briefly describe the current military export system.

Today, the only full-fledged exporter of military equipment and weapons is the state-owned company Rosoboronexport. She has the right to participate in the negotiation processes, to supply abroad the entire range of Russian military products, including fully assembled products. The state-owned company accounts for about 80 percent of the total volume of export supplies of weapons and military equipment. At the same time, Rostec, which includes Rosoboronexport, thanks to its numerous foreign missions, assists in the promotion of domestically produced military products to foreign markets, and also organizes international exhibition campaigns in Russia and abroad.

In addition, there is a list of subjects of military-technical cooperation, which currently includes 26 companies and enterprises that have the right to independently sell military products. Three of them - UAC-Transport Aircraft, United Shipbuilding Corporation and Oboronservice can operate only within narrow frameworks of previously approved joint projects with foreigners, such as programs for developing military transport aircraft, missiles or equipment modernization packages.

The remaining 21 company (with the exception of Rosoboronexport and Russian Technologies) is able to supply spare parts, various units abroad, as well as provide services for the repair, maintenance and modernization of military equipment and to train technical and military personnel. Despite the opportunity to independently export their products, these companies still more often use the services of Rosoboronexport, which has extensive experience in conducting international negotiations with due regard for the international political situation.

We are talking about the enterprises of RSK MiG, the Design Bureau for Instrument Engineering, the NPO Mashinostroeniya, the Engineering Design Bureau of the Mashinostroeniya, the Federal Scientific-Practical Scientific Production Center Pribor, the SPT of the Gas-Turbine Engineering Salyut, the Sukhoi State Research and Production Enterprise Splav, the NPO Kvant, the Ural Optical Mechanical Plant Yalamov, Uralvagonzavod, Zvezdochka Ship Repair Center, Admiralty Shipyards, Aerospace Equipment Corporation, Novosibirsk Instrument Engineering Plant, Tactical Missile Weapons Corporation, Almaz-Antey Air Defense Concern, Ilyushin Aviation Complex, corporation uu "Oboronprom" SSPE "Basalt" and concern "Vega".

At the top of the Russian export pyramid stands the Federal Service for Military-Technical Cooperation, which controls and supervises export and import supplies. It is this body that decides on the import and export of weapons and military equipment, the issuance of export licenses to subjects of military-technical cooperation, or on the organization of exhibitions and demonstration of military products. The decisions of the FSMTC must be approved by the President of Russia.

As already mentioned, in 2013, the export of weapons and military equipment through Rosoboronexport amounted to 13,2 billion dollars and about 13 billion dollars according to the results of 2012. This means that even a slight increase in military exports was provided by the very supply of spare parts, components and the provision of various services. Such a trend could not have emerged without some effort on the part of the Russian authorities. In July, 2012, Russian President Vladimir Putin announced that the after-sales and service system should be seriously improved. Since then, the development of changes that can be made to the already existing system of export of military products, which, according to Soviet memory, has paid little attention to the repair, maintenance and upgrading of previously supplied military equipment, has begun.

In February, 2011, director of the Federal Service for Military-Technical Cooperation Mikhail Dmitriev, admitted that the USSR underestimated the advantages of repair and modernization of the equipment supplied, the supply of spare parts, tools and accessories: “Unfortunately, we inherited this and it was not so easy to overcome this legacy.” As a result, buyers often make claims to the Russian side on after-sales service and interaction. According to Putin, consideration of official appeals from buyers, all sorts of approvals sometimes drag on for too long, because of which, of course, Russian military exports also suffer, and this means that part of the state budget is full. Now we can confidently say that Russia has managed to partially abandon the Soviet traditions. And there have been plenty of examples of this lately.

So, at the end of March 2013, a service center was opened in South Africa - a joint venture between Denel and Russian Helicopters. It will serve helicopters of the types Mi-8 / 17 and Ka-32. The fleet of such vehicles, which are in operation in African countries, is about 600 units. In the future, the possibilities of this center will expand - it will be able to engage in maintenance, repair, minor modernization of combat helicopters and domestic production. At the beginning of 2014, a similar service center was launched in South Korea. All this suggests that in the next few years, Russia has every chance to significantly strengthen its position in the global market for weapons and military equipment. It is only necessary to speed up development somewhat, because every year China is beginning to step on its heels.
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  1. ispaniard
    ispaniard 21 March 2014 08: 24
    It is high time!)))
    1. AVV
      AVV 21 March 2014 11: 45
      Quote: ispaniard
      It is high time!)))

      Yesterday, and in the light of recent events, even earlier !!!
      1. jjj
        jjj 21 March 2014 11: 52
        Projects - worked out, "childhood diseases" - treated. Now is the time to quickly rearm
  2. - = Rusich = -
    - = Rusich = - 21 March 2014 08: 35
    Well, the good news is that they begin to realize what their own needs. Although, without foreign orders, our defense industry would not have survived not so long ago. So today the trend is correct.
  3. Kuvabatake
    Kuvabatake 21 March 2014 08: 35
    Not a word. It's time, it's time, it's time.
  4. ken
    ken 21 March 2014 09: 24
    Napoleon Bonaparte said: "A people who do not want to feed their army will feed someone else's"
  5. Hort
    Hort 21 March 2014 09: 54
  6. inkass_98
    inkass_98 21 March 2014 10: 11
    As far as I remember, the main income comes not from sales, but after-sales services, because it is not for nothing that the contracts of foreign companies include two parts - the sale of equipment itself and its subsequent maintenance, as well as an option for modernization. It’s good that even now it has begun to reach our production workers that you can make money on it unnecessarily.
  7. buzer
    buzer 21 March 2014 10: 50
    Do not forget that many customers are waiting for the appearance and adoption of new, promising projects ... The same T-50, Armata, Kurganets, Boomerang, Coalition, AK-12 and other, other, other ... I am tormented by vague doubts that only for the sake of obtaining such technologies, many are ready to join the TS ... Otherwise, how to explain applications to the TS for example Turkey ???
    KOSMOS 21 March 2014 14: 28
    The world is becoming more aggressive. Already respect only the strong. You give the modern weapons of the native army ..
  9. apollo
    apollo 21 March 2014 14: 55
    Now, if we eradicate corruption in the country and clean up the government ...
    1. St Petrov
      St Petrov 21 March 2014 19: 47
      our government is normal. It is necessary to clean the NPO and all the Ponomarevs with other agents. Everyone knows them. The Ministry of Education urgently needs to be cleaned from them - yes. For this was the main goal of the Anglo-Saxons. Our Ministry of Science.

      At the second stage - you need to clean the media, Tough and uncompromising. From the same foreign agents

      And all these bribes and theft - this is the third thing. This is one of the sins and eternal vices of mankind. There is no escape from this, and executions in China, too, do not really rectify the situation.

      He is a thief and a thief in Africa, and I completely agree with Zhiglov about where the thief should be.

      But with the traitor, the demand must be terrible.
    2. The comment was deleted.
  10. Evgeniy667b
    Evgeniy667b 21 March 2014 15: 02
    It's time to throw off all suckers such as India and others like her !!! Hindus will not fight for us. All in the Russian army and navy
  11. Leshka
    Leshka 21 March 2014 17: 54
    it's time to increase supplies for our
  12. duchy
    duchy 21 March 2014 18: 15
    Of course, I understand that everyone wants to get the latest technology, the cheaper the better, but this does not happen. We need to get rid of the old fleet of equipment, modernize it and sell it at a self-sustaining price (disposal). Our equipment of the years 80-2009 is in demand, with the proceeds, to modernize the military-industrial complex.
  13. Aleksandr89
    Aleksandr89 21 March 2014 21: 49
    Quote: Leshka
    it's time to increase supplies for our

    Not just long ago it was necessary to increase supplies to ourselves, but to increase the day before yesterday! Otherwise, the day after tomorrow may not come.
  14. Heretik
    Heretik 21 March 2014 23: 08
    Definitely need to fully re-upgrade. Of course, not everything should be sold from old equipment - it is also necessary to update the range of positions in strategic warehouses :-), if 12 would be introduced faster. An interactive shooting platform ... What about Turkey and the TS? Looks infa jumped past me (((
  15. Max_Damage
    Max_Damage 23 March 2014 18: 05
    Rather, they would give the people a look at the armature and t50.
  16. The comment was deleted.