Interview with the First Deputy General Director of JSC Concern Radioelectronic Technologies (KRET)
Dear readers, we offer you the interview of the First Deputy General Director of Concern Radio-Electronic Technologies OJSC (KRET) Igor Georgievich Nasenkov.
General development issues of KRET
What are the main challenges / difficulties in the development of the company in your opinion now or may become relevant in the medium term (up to 2020 year)? What areas in KRET activity do you think are the most problematic and what are you supposed to do to correct them?
The main challenge for us today is the unconditional fulfillment of the state defense order of high quality and on time. As with the mass of other positions on the current GPV, the program for the release of electronic warfare and avionics equipment for combat aviation very stressful. We are faced with the shortage of high-performance jobs. Accordingly, our efforts to overcome this challenge lie in the priority implementation of projects to modernize the production base of enterprises participating in state defense organizations. And closer to 2020, I think that we will concentrate our main efforts on expanding our presence in the global market. Our strategic goal is to become a comprehensive supplier of electronic systems in the international markets of avionics, electronic warfare, for which today the Corporation implements a number of promising development projects to create unique electronic systems, products, and complexes of a new generation.
Which companies do you see as the main competitors of KRET in the international market?
For the Concern’s main activities, the cartography of our competitors is as follows. In the market of avionics and aircraft instruments, our rivals are Honeywell International Inc., Thales Group, Rockwell Collins. The main competitors of the Concern in the direction of EW are: American (Lockheed Martin, Northrop Grumman, Raytheon, ITT, BAE), European (Thales, Elettronica, Indra) and Israeli manufacturers (Elta, Rafael). The share of OJSC Concern Radioelectronic Technologies in the world market of EW funds today is about 3%.
In the segment of state identification in the foreign market, unlike the EW market, there is practically no competition. At the moment there are only 2 state identification systems - Russian ("Silicon", "Password", "Guard") and the US (MK-10, MK-12). The choice of system is carried out mainly under the influence of geopolitical factors, and not the conditions of supply, cost and performance characteristics. Switching to another system is extremely costly (it is necessary to equip all watercraft, air defense, etc.) in a short time and, therefore, is practically impossible.
The cable market is predominantly civil. The largest foreign manufacturers of cable and cable products are Radiall, Axon 'Cable SAS, Amphenol Industrial, Glenair, Inc., The Harting Technology Group, Tyco Electronics (TE Connectivity).
The instrumentation market includes both civilian and military / specialty product segments, where the level of competition differs significantly. The Concern is poorly represented in the segment of civil measuring equipment. Major competitors: Agilent, Tektronix, Fluke, Rohde & Schwarz.
The threat of sanctions and KRET
What is the current share of imported electronic components in the total ECB used by KRET?
We are very closely monitoring the situation in this area. When developing critical CST samples of CST, the electronic component base of foreign production is not used at all. When developing non-critical samples of VVST, the electronic component base of foreign production is used in insignificant amounts. At the same time, in order to exclude dependence on foreign suppliers, the Concern is actively working on import substitution of the ECB to domestic equivalents.
Is there any impact of sanctions already imposed by the West on the work of KRET, how painful for the Concern could be the “third package” sanctions, what production programs could they affect?
No, neither the introduction by the West of the first and second package sanctions, nor the possible sanctions of the third package, have had and will not have a significant impact on the progress of the current production and development work carried out by the Concern's enterprises. The fact is that the Concern does not depend on foreign investments and has almost no bank accounts in Europe.
Some of the consequences of the imposed sanctions may appear in the case of the need to purchase or update licensed software when performing promising R & D.
Separate difficulties may be caused by the policy of the current authorities of Ukraine, aimed at breaking the production links between Ukrainian and Russian enterprises. Today, the Ukrainian partners declare the preservation of all business contacts. But, there are facts of delays in the receipt of funds when delivering our products to Ukrainian enterprises, which is caused by the adoption in Ukraine of a legal norm setting the maximum period (80 days) from the moment money is transferred to the Russian Federation until the goods are received, which contradicts the production cycle and current conditions payment of finished products. Naturally, we are taking measures to reduce the Concern's dependence on the fluctuations of the political situation in Ukraine. To reduce the impact of the effects of sanctions and the supply of products for the Russian special machinery from Ukraine, we are already creating insurance stocks and consistently implementing import substitution programs for components and components.
How can the introduction of sanctions affect the course of the Concern's technical re-equipment program, after all, it is not a secret that most of the machine base and equipment is purchased abroad?
Indeed, at present, most of the equipment expected to be procured as part of the programs for the technical re-equipment of enterprises is produced in the EU and the USA. And the introduction of a ban on the supply of high-tech equipment, of course, will lead to certain difficulties. But, in our opinion, they are completely surmountable.
Firstly, it is very unlikely that a potential ban will be introduced simultaneously for all manufacturers in all sectors of the industry. This will allow us to restructure in a timely manner and gradually work out the issues of finding alternatives to prohibited goods. Such work, by the way, is already underway. Interest for us, for example, are Asian countries that are ready to cooperate with Russian consumers.
Secondly, most of the imported equipment of interest to KRET is produced in the countries of the European Union, which we still have access to the markets for. In general, the industry supplies thousands of units of expensive equipment per year. The loss of such a market will be very noticeable for the economy of European companies, which indirectly may indicate a low probability of a complete ban on all types of high-tech equipment. At the same time, today, manufacturers and suppliers from Asia are just waiting for the moment when Russian enterprises and distributors are reorienting on the supply of machine tools and equipment from Japan, Korea, Malaysia, China, and other countries whose products are not inferior to their European counterparts.
Finally, Rostec State Corporation is currently actively working on various import substitution programs, including the organization of domestic production of metalworking and other production equipment.
Questions about production programs
What is the share of the main production areas (on-board radio-electronic equipment, systems and means of electronic warfare, systems and means of state identification, detachable connectors, measuring equipment) in the revenue structure of the concern in 2013?
In 2013, the share of the direction of the on-board radio-electronic equipment is 55,8%, systems and means of electronic warfare - 29,1%, systems and means of state identification - 7,2%, connectors and cables - 4,5%, measuring instruments - 3,5%.
Are there any planned indicators of the ratio between production programs that the Concern would like to achieve?
Share in the revenue of the main production areas in 2014-2016. basically remain at the level of 2013. The planned revenue of the Concern by 2016 should reach 146 billion rubles.
What is the share of civilian products in the Concern's revenue in 2013?
In 2013, the share of civilian products in revenue was 23%.
What priority defense programs does the Concern currently perform? Does the concern conduct research and development in the field of creation of EW systems of a new generation, which will replace the systems “Krasukha-4”, “Mercury-BM”, “Vitebsk”?
The concern participates in the implementation of activities of the State Armaments Program for the period 2011-2020 (GW) and the Federal Target Program Development of the Defense-Industrial Complex of the Russian Federation for the period 2011-2020 (Federal Target Program).
In the framework of the state-of-art organization, it develops, manufactures and overhauls EW equipment, state radar identification and measuring equipment for various purposes.
In the framework of the Federal Program - the development of industrial critical and basic technologies that ensure the creation of technology, as well as the development and manufacture of electronic component base products: electrical connectors and cable products.
Currently, the Concern conducts R & D to improve existing and develop new EW tools. In particular, to replace the system "Krasukha-4" is developing a more powerful, complex and resistant to the effects of the enemy ground complex.
Promising EW systems for aircraft protection are also being developed. They will have improved, in comparison with the Vitebsk complex, technical characteristics, use new physical principles of work, have the ability to repel attacks of practically the entire range of anti-aircraft defense systems.
Does the Concern have any programs in terms of creating EW facilities for their use on unmanned aircraft platforms?
Yes, within the framework of state programs, the Concern prepared proposals regarding the development of technologies ensuring the creation of unmanned aerial vehicles (UAVs).
The level of existing Russian technologies for creating equipment for UAVs basically corresponds, and in the field of EW facilities, in many respects it exceeds the world level. At the same time, to ensure compliance with the ever-increasing requirements for efficiently solving EW problems, it is necessary to develop existing and create new technologies for developing EW equipment for UAVs.
These are, above all, technology:
- creation of high-precision equipment for determining the coordinates of radio-emitting objects;
- creation of ultra-wideband high-power transceiver AFAR;
- creation of optoelectronic equipment using radiophotonics;
- development of high-speed devices for converting microwave signals from analog to digital and vice versa;
- the creation of a unified small-sized wideband digital equipment EW and others.
The development activities of the listed technologies formed the basis for the Concern's participation in projects for creating EW facilities for UAVs.
Such a scope of the Concern as the production of instrumentation equipment always remains in the shadow of the achievements of enterprises specializing in the development of EW systems and avionics. What advanced developments of the KRET instrumentation cluster would you mention and how do you see the future of this line of activity of the Concern?
The holding of measuring equipment will soon be somewhat reorganized. Part of the enterprises will be merged in order to more efficiently use the existing production capacity, while the head enterprises of the holding company remain Nizhny Novgorod - NPO. Frunze and NNPI "Quartz", on the basis of which the main development and production of measuring equipment is planned.
The main types of instrumentation traditionally remain high-frequency and microwave signal generators, spectrum analyzers, frequency and time standards, high-precision voltage and current calibrators, measuring instruments for coaxial and waveguide paths, measuring noise parameters, monitoring and radiation monitoring instruments, and space measuring instruments troops, the equipment of a single time system and integrated synchronization of the NEV automation equipment.
Along with this, the production of new measuring complexes, such as automated workstations for calibrating the navigation equipment of consumers of the GLONASS satellite navigation system and automated workstations for checking measuring instruments of parameters of fiber-optical transmission systems, has begun.
New developments of the enterprises of the IA holding include the following areas:
- development of technologies for creating measuring equipment of the millimeter and submillimeter wavelength ranges;
- development of high-precision means in the field of time-frequency measurements (quantum frequency standards of the new generation) for the metrological support of the GLONASS system;
- creation of means of metrological support of radar systems, radio communication systems and radio navigation;
- development of a unified automated complex for the metrological maintenance of the armament of the space forces and the corresponding Roscosmos systems of enhanced metrological autonomy.
In addition, in order to fully satisfy the enterprises of the Concern and the State Corporation "Rostec" in general with advanced measuring equipment on the basis of the Nizhny Novgorod NPO im. Frunze, in 2014, the production of high-frequency signal generators and spectrum analyzers began, organized in conjunction with the leading instrument-making company of West German Rohde & Schwarz (Rode Schwarz). And in the near future it is planned to organize a similar production of power meters and signal analyzers.
How do you see the future directions of development and production of the state identification system?
The system of state identification currently and in the future remains the main system ensuring the protection of our troops against erroneous use of them. weapons their troops.
The development of the state identification system is closely connected with the development of the main weapon systems and troop control systems and should take into account and respond to two challenges. First, to increase the existing requirements from the side of the provided objects to the authenticity of identification. Secondly, the emergence of new requirements, including the need to ensure the identification of fundamentally new types of armament complexes (for example, combat robotic systems).
As for the directions of improving the serial production of state identification means, here the main attention will be paid to improving the manufacturability, reliability of equipment, and reducing its cost.
Economic, personnel and corporate structure issues
Tell us about the plans of the Concern to move to the divisional structure. What divisions will be created and what will it give in the organizational plan?
As part of our strategy, a model of an integrated avionics system for various vehicles has been defined. This predetermined the target structure of the Concern. We do not create so-called subholdings, transferring the shares of enterprises there (thus limiting the development horizons for the enterprise), but form a business unit responsible for a specific customer segment of the market (civil aviation, military aviation, land and sea equipment, EW equipment). This allowed us to load our enterprises (design bureaus, factories) more efficiently with orders for several market directions, and to specialize them in core technologies. This allowed our assets to diversify orders within their technical profile and maximize the use of production capacity.
The structure of the holding company remained, as before, vertically integrated, that is, all enterprises are directly subordinate to the Concern. At the same time, organizations responsible for client segments work with factories and design bureaus in the framework of industrial cooperation coordinated by the Concern.
In connection with the introduction of Western sanctions and the general deterioration of the economic situation, do the plans for the release of KRET to IPO remain in force in the near future?
Let's say that we introduce all the necessary corporate, production and other standards in order to be ready for an IPO, but the decision to enter the stock exchange will be made by our shareholder (Rostec GC) later.
What is the average salary at the Concern's enterprises? Is there competition within the Concern between enterprises for the best personnel?
The average salary in 2013 was 28,8 thousand rubles. This is 5% higher than our planned figure and 12% higher than the same indicator 2012 of the year. Raising employees' salaries is a priority for the Concern, because only in this way can we remain competitive in the labor market, and the qualifications of the involved specialists directly depend on this, and therefore the level of equipment produced. Competition for the best personnel in closely located enterprises is of course present. And this is good, because it forces management to create modern and comfortable working conditions, to offer competitive pay, and this, of course, leads to an increase in the efficiency of the enterprise.
What is the average age of the Concern employees? What efforts does the Concern undertake to train, attract and retain young professionals?
Today, the average age of KRET employees is 48. To retain young people, we constantly implement various social, motivational and educational programs. Among them, such as, the transition to automated and automatic processes in production and design, the creation of scientific and technological alliances with universities to share knowledge and experience, the implementation of joint research of fundamental and applied nature, the development of new products, technologies, etc. In addition, enterprises various kinds of social security, benefits, benefits. For this, the Concern allocates from 5 to 10% of the net profit of enterprises.
Military technical cooperation
What is the share of exports in the group's revenue structure in 2013?
The share of direct exports in revenue 2013g. amounted to about 3%. In addition, in the framework of cooperation on military-technical cooperation, the Concern supplied products by almost 13 billion rubles. ($ 370 mln.) In the first half of 2014, the Concern established corporate control over Aerospace Equipment Corporation OJSC and included it in the control loop. It is the largest exporter of aviation avionics (including radar systems). Due to this, the volume of direct export of military products of the Concern in 2014 and the following years will be about 150 - 200 million dollars.
Is work being done to create export versions of the electronic warfare complexes "Krasukha-4", "Mercury-BM", "Vitebsk"? How do you assess the prospects for the export of these products?
The concern is interested in the development of military-technical cooperation with foreign countries; therefore, work on creating export variants of EW complexes is ongoing. In terms of ground-based equipment, an export passport and an advertising passport for the Mercury-BM complex have been developed. Issued an appeal to the FS BTS. As for the complex "Krasuha-4", the work on the formation of a package of permits is not yet completed.
We believe that Krasuha-4 and Mercury-BM have a high export potential. Complex "Mercury-BM" can successfully perform tasks in military conflicts of any intensity. The capabilities of the complex "Krasuha-4" allow you to fend off threats from virtually all onboard electronic systems of aircraft of the attacking side.
The export variant of the aviation complex “Vitebsk” is the “President-S” complex of electronic warfare. He is able to protect against the defeat of any aircraft that is being attacked by missiles of modern man-portable air defense systems. The Concern’s exposition at the HeliRussia-2014 international exhibition of the helicopter industry presented a laser station for optical-electronic suppression of the Presidential-S complex, providing individual protection for the Mi-28H “Night Hunter” attack helicopter from guided missiles with infrared homing heads. In our opinion, President-S is also a very promising model for export to foreign customers.
Can you name potential foreign customers of EW systems of your development?
Any foreign country in respect of which there are no restrictions on the supply of military products by the Russian Federation may be a potential customer of EW systems and facilities. But we count, first of all, on the receipt of orders from our traditional partners - Belarus, India, China, Vietnam, Malaysia, the Czech Republic, Indonesia, and Egypt.
Earlier in one of the interviews you promised that the volume of export supplies of the concern within the framework of military technical cooperation will grow by 20-30% per year in order to achieve export volumes in 1,6-1,7 billion rubles to 2017 year. At the expense of what programs or production directions do you plan to ensure such growth?
The basis for ensuring this growth will be the implementation of the Development Strategy of the Concern Radio-Electronic Technologies OJSC for the period up to 2020 of the year, which has been approved by the Rostec State Corporation. Concern enterprises supplied military products to Belarus, Vietnam, Egypt, India, Indonesia, Italy, China, Malaysia, the Czech Republic. The Concern includes 2 enterprises that, according to the established procedure, have received the right of foreign trade activities for the supply of military products - OAO NPO Kvant and OAO Aerospace Equipment Corporation.
Currently, the Concern's enterprises together with Rosoboronexport OJSC are working on the supply of spare parts, repair and modernization of military dual-use and civilian products in Algeria, Belarus, Vietnam, Egypt, India, Indonesia, China, Kuwait, Malaysia, the Czech Republic, and Also, an assessment is made of the prospects for promoting an integrated after-sales service system and upgrading previously supplied Russian (Soviet) equipment.
In cooperation with Rosoboronexport OJSC, the conditions for the supply of state recognition funds to Algeria are being worked out.
At the same time, the Concern takes part in obtaining an independent right to carry out foreign trade activities in relation to deliveries of military products, and also develops the necessary contacts for independent access to foreign markets.
As part of the phased implementation of the Development Strategy, a competitive level of systems and complexes of onboard radio-electronic equipment will be achieved, in comparison with world analogues, a transition has been made from the supply of individual systems to the supply of integrated military-electronic radio complexes to the world market; unparalleled in the world.
Recently in China, the UAC and the Chinese corporation SOMAS signed a memorandum of cooperation on the program of passenger wide-body long-haul aircraft. Does KRET plan to participate in this ambitious program?
KRET is aware of the signing of the United Aircraft Corporation Corporation of the Chinese corporation COMAC by the Memorandum of Cooperation on the program of a promising passenger wide-body long-haul aircraft.
The new program should be one of the largest international cooperation projects in the field of aircraft manufacturing and in the high-tech sphere of both countries, and we cannot stand aside from it.
Taking into account the fact that in the near future, the parties will begin a more detailed study of this project. KRET is ready to take part in the implementation of the program of a prospective passenger wide-body long-haul aircraft already at the stage of determining the procedure for developing the main aircraft systems.
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