Last week, the Moscow-based Zhukovsky hosted the “ground MAKS” - the international forum “Engineering Technologies - 2014” and the international exhibition of weapons and technologies “Oboronexpo-2014”.
The forum traditionally brought together a representative audience: heads of companies from Germany, France, Switzerland, India, China and other countries came to participate in conferences, seminars and round tables. A number of corporate contracts were concluded. Traditionally, for the second time, the general sponsor of the business program was VTB Bank.
The context of the event was very disturbing. The sanctions of the Western states touched upon the supply of military and dual-use products to Russia, including the machines and industrial equipment necessary for us, as well as the cooperation of domestic and foreign companies in the development and production of weapons. The Ukrainian defense enterprises made a negative contribution at the request of the Kiev authorities to cooperate with Russian partners - which is extremely unpleasant, because defense enterprises of Russia and Ukraine were once formed as part of a single Soviet complex and therefore were closely cooperated.
In such a situation, it is advisable to consider what awaits our gunsmiths.
It is worth recalling that now there is a cardinal renewal of our Armed Forces. Since 2011, the rearmament program has been implemented in Russia, calculated for the period up to 2020. The program is very ambitious: the total amount of funds for the acquisition of new types of weapons by 2020 should be about 20 trillion rubles (for comparison: the nominal annual GDP of the country is 66 trillion rubles).
In accordance with the planned figures, the share of the new weapons in the Armed Forces, by the year 2015 should be 30%, by 2020 -m - 70%. The rearmament will affect all branches of the military and all types of weapons and military equipment.
The growth of interest in the army in Russia is noticeable even in international comparisons. So, last year, our country ranked third in the world in military spending, beating the UK and Japan. The military expenses of the Russian state over the past year amounted to 68,8 billion dollars. Only the “super heavyweights” of the world economy spend more: the USA (578 billion dollars) and China (148 billion dollars).
The dynamic picture is even more impressive. Russia in the 2013 year, not only came in third place in terms of costs for the army, but also became the leader in terms of growth in military spending. The country's military budget in the next three years will increase by more than 44%. In 2014, Russia will spend 78 billion dollars on defense.
For completeness, we can mention that Russia also remains the second largest (after the United States) arms supplier to foreign markets.
It would seem that with such volumes of military orders there is no reason for concern among domestic gunsmiths. However, problems remain.
To bottom and back
Firstly, it is still the impact of the collapse of the industry in the 1990's. By the middle of the last year’s decade, the Russian defense industry complex, with a rare exception of the industries that had established export deliveries, was essentially in ruins. The enterprises of the industry “lost their form”, lost valuable personnel, having failed to carry out timely modernization of production because of chronic lack of money, lagged behind Western companies in technical terms. And all these production problems must be urgently resolved in the process of implementing the rearmament program.
Secondly, it creates difficulties and the already mentioned need for the supply of equipment and elements of weapons from abroad. Russia is heavily dependent on imports of precision machine tools, electronic components. Traditionally, for our defense industry, the deliveries of engines for helicopters from the Ukrainian company Motor Sich were important, the role of the Dnepropetrovsk Yuzhmash in rocket armament was great, and the Khartron Kharkov (former Elektropribor) was in military electronics.
In principle, the question is solved. To reduce the technical lag, together with the re-equipment program, a federal target program for the development of the defense industry complex of 3 trillion rubles in size is being implemented.
All last year, the country sought to reduce the dependence of ship maintenance and repair on foreign shipyards. In August, 2013-th was banned the use of foreign machines, if there are available domestic counterparts. The emerging system integrator “Stankoprom” was tasked to bring the volume of its own competitive equipment to one third.
The production of engines for helicopters on the state defense order was transferred to the power of the United Engine Corporation. In particular, in the 2012 year, the UEC for 6,2 billion rubles of investments put into operation a new enterprise - the Petersburg Motors plant.
Established in 2009, under the auspices of "Rostec", the corporation Radioelectronic Technologies actively develops domestic military electronics.
“We carry out a detailed analysis with regard to imported components manufactured in Ukraine, the European Union countries and NATO. In general, we plan to complete all this work by November of this year ... Within two to three years we will be ready to completely get rid of dependence on components and components imported by defense industry enterprises from abroad, in particular from Ukraine, ”says the deputy chairman. Russian government Dmitry Rogozin.
In general, according to the President of the Institute for National Strategy Mikhail Remizov, disruption of the rearmament program is not threatened. Although certain delays are possible: “The program may be revised to extend the deadlines. First of all it concerns shipbuilding. Somewhere weaponry is not yet brought. Somewhere else under Serdyukov, enterprises entered into contracts at obviously unrealistic, low prices. Tried to stake out a contract, but can not fulfill it for this price. Plus, the situation with Ukraine and the need for import substitution may somewhat slow down the rearmament. We will have to create in Russia the production of products that were previously imported, and not to engage in the development of new technologies. ”
And of course, all this will require financial investments in the industry.
One of the possible options for promoting the development of the defense industry in addition to direct state subsidies could be more active participation of financial institutions in supporting gunsmiths.
In 1990, this did not spread for obvious reasons: banks preferred to go into more profitable areas of capital investment, gunsmiths had no opportunity to attract loan financing. If loans were given, they were small and short-term - for salary payment.
In 1999, the situation improved slightly. The state has pledged to settle with defense industry enterprises on the debts that have been formed, and no payments have begun. It became more interesting to maintain the state defense order, as money began to be allocated more or less in a timely manner. Some payment delays remained, but their maximum period did not exceed three months, which was associated with such a concept as the fiscal year. In cases where payment for government orders falls at the end of the year, it usually shifts to the first quarter of the next year.
Now the state order is approved this year. And by the end of December, every enterprise operating under such programs knows what it has to do, how much its own funds it can spend, and how much it will need to attract, including through borrowing in the banking sector.
Today, all the largest domestic banks, both state and private, work with the defense industry. In the regions of the traditional dense concentration of defense enterprises, for example in the Urals, regional banks are also actively cooperating with smaller sized banks. The banks did not disclose the share of investments in the defense sector in the total volume of loan portfolios, but they are estimated by different banks at the level of 7 – 25%.
With the implementation of the rearmament program, this interest is growing. As, for example, the sponsor of the above-mentioned “ground MAKS” VTB Bank. This credit organization has always actively supported the enterprises of the Russian defense industry. Only on the first day of the forum, VTB signed two agreements on strategic cooperation: with the Morins-Agat concern (the leading enterprise in the Russian shipbuilding in information systems) and NPP Radar Mms (the leader in the production of radio electronic systems and complexes). “The credit portfolio of the VTB Department of Government and Defense Sector Customer Relations for the first half of 2014 alone increased by 23 percent, or 146 billion rubles. The defense sector accounts for more than 70 percent of all departmental loans, ”says the board member of VTB Valery Lukyanenko.
It is likely that the demand for loans from defense enterprises will only grow. The industry is facing global modernization. Most likely, in the coming years we will see a growing interest of banks and defense enterprises in cooperation. Competition in this market is just beginning.