From 11 to 13 September, the first Azerbaijani international defense industry exhibition ADEX 2014 will be held at the Baku Expo Center. It will be initiated and supported by the Ministry of Defense Industry and the Ministry of Defense of the Republic of Azerbaijan. On the eve of holding a Caucasus review of military products, the head of the Rosoboronexport delegation at ADEX 2014 - Advisor to the General Director Esen Topoev gave an interview to the Military Industrial Courier weekly.
- Esen Tolenovich, Azerbaijan has become the fourth state on the territory of the former USSR, where an exhibition of defense industry, armaments and military equipment will open. What caused this trend?
- Indeed, exhibitions of military products are held in Russia, Belarus, Kazakhstan, and now Azerbaijan. In my opinion, this is due to the significant defense-industrial potential that these countries have, and the growth of export opportunities for the supply of military products to foreign customers.
- But Azerbaijan has always been associated with oil production, and not with the production of weapons and military equipment.
- This is not quite true. The first enterprises of the defense industry of Azerbaijan were created in 1918 year. They consisted of workshops for the repair of various military equipment and small weapons. After the establishment of Soviet power, the defense factories of the republic became part of the Soviet military-industrial complex.
During the Great Patriotic War, various military products were produced in Azerbaijan for the needs of the Red Army. Two aircraft factories were operating, where UTI-4 and Yak-3 fighter aircraft were manufactured and repaired, and missiles for legendary Katyushas were made in Baku.
Of course, the nineties of the last century did not have the best effect on the defense industry of an independent state. Now the government of Azerbaijan has decided to localize the production of main types of military products directly in the country. This is one of the points of the state’s strategic development for the next decade.
- The intensive development of the country's defense industry began with a decree of President Ilham Aliyev of December 16 of 2005 on the establishment of the Ministry of Defense Industry of the Republic of Azerbaijan.
- Yes it is. This is confirmed by investment programs aimed at developing the local defense industry.
Today, Azerbaijan is a dynamically developing regional power, one of the world leaders in GDP growth, whose budget is able to allocate about four billion dollars in the interests of the military sphere. In recent years, Baku not only imports a large amount of modern military equipment, but also seeks to organize its own production of main types of military products. According to some estimates, the country's defense industry is already producing more than 900 items for military products - from sniper rifles, artillery shells, bombs to armored personnel carriers, multiple launch rocket systems and unmanned aerial vehicles. The result is not only supplies to the national Armed Forces, but also access to the international market of weapons and military equipment. According to the Ministry of Defense Industry of Azerbaijan, cooperating with foreign companies of more than sixty countries, the country exported PPHs for 123 million dollars last year, exceeding the previous year’s results several times. Since 2009, Azerbaijan has been participating in international gun salons. An illustrative comparison: while at the international exhibition IDEEF-2009 in Istanbul, the country presented the 27 names of its products as the debut foreign show, then the Malaysian DSA-2014 already demonstrated the 132 sample of weapons and military equipment with the “Made in Azerbaijan” brand.
But the development of exports of drugs requires a wider advertising. That is why it was decided to organize an international exhibition ADEX 2014, which will be held in Baku from 11 to 13 in September. In addition, this forum does not start from scratch. In September-October last year, the Azerbaijan for 10 Years exhibition was successfully held in Baku, where defense and civilian products produced by enterprises of the country's Ministry of Defense Industry were displayed. It is planned that ADEX will become an authoritative exhibition platform to demonstrate the country's military potential and develop military-technical cooperation with foreign partners.
- What is the reason for Rosoboronexport’s decision to participate in the international exhibition ADEX 2014?
- Rosoboronexport has an active interest in almost all major international and Russian exhibitions, where the best military products are displayed. This is one of the leading directions of our marketing policy, the opportunity to once again demonstrate to potential foreign buyers the best export samples of Russian military equipment.
The defense industry exhibition in Baku is the first and only in the Caucasus. Azerbaijan, where it will be held, is an important economic partner of Russia, occupying the fifth line in the general trade turnover with our state.
We should not forget that historically Azerbaijan has an important geographical position in the region at the strategic crossroads of Europe and Asia, which has not lost its significance even today. The state has direct and easy access to the extensive and rapidly developing markets of Central Asia, the CIS and the Middle East. The current exhibition ADEX 2014, in which more than 170 companies from more than three dozen countries participate, is a clear proof of this.
ADEX will become a unique platform for organizing meetings of representatives of the armed forces, developers and manufacturers of military equipment of a very important and promising region in terms of weapons supplies. The combination of all these factors makes the exhibition site in Baku extremely interesting for Rosoboronexport. By the way, the participation of Rosoboronexport in debut shows becomes a good sign and a symbol of the success of new exhibitions.
- But participation in foreign shops is a very expensive pleasure.
- Nevertheless, Rosoboronexport annually participates in about two dozen foreign exhibitions. We select the most prestigious, world-famous displays of weapons and military equipment in Paris, London, China, India, Brazil, Malaysia and other countries, which bring together representatives of the world's best manufacturers of military products. Of course, participation in a foreign exhibition is costing us dearly. Payment for exhibition space, development and construction of an exposition, delegation flights, a hotel ... That is why we do not always have the opportunity to export abroad and show full-scale samples of domestic military equipment. In this sense, Russian exhibitions, which demonstrate dozens of aircraft, ships, air defense systems, cars, tanks, BMP and other armored vehicles are more interesting. But no matter where the exhibition takes place - at home or abroad, the delegation of Rosoboronexport meets with representatives of the political leadership and military elite of foreign countries, holds talks, shows and presentations of Russian military products. Largely thanks to this work, contracts are signed, the geography and range of military equipment supplied to our foreign partners are expanded, and Russian manufacturers receive profitable orders. As a result, our country has for many years been confidently taking the second place in the world arms market.
- What Russian enterprises and companies will present their products on ADEX 2014?
- Under the auspices of the state corporation Rostec, about ten domestic enterprises were included in the Russian delegation to participate in the Baku exhibition. In addition to Rosoboronexport, the best models of modern armored vehicles will be demonstrated by Uralvagonzavod Research and Production Corporation. One of the oldest enterprises in Russia, Kovrov Electromechanical Plant, OJSC, a manufacturer of weapons stabilization and guidance systems of all types of tanks and infantry fighting vehicles produced domestically, will show its best products. I think this is a worthy representation of the Russian defense industry at an exhibition in Baku.
- What will be the exhibitors and guests of the exhibition in Baku at the Rosoboronexport exposition?
“Today, Rosoboronexport’s foreign customers are showing an active interest in noiseless submarines, including anaerobic power plants, ships built using stealth technology, and high-speed boats for various purposes. In this segment, we pin some hopes on the further promotion of the 11356 and Cheetah-3.9 frigates to the world markets, the 636 and Amur-1650 submarines, and the Svetlyak and Molniya boats.
В aviation potential buyers are interested in looking at multifunctional stealth aircraft, new helicopter models and unmanned aerial vehicles. Promising directions for us are the Su-30, MiG-29, Su-35 aircraft, the Yak-130 combat training aircraft, and the Mi and Ka family helicopters.
The armored vehicles demand high-speed maneuverable samples that ensure the survival of the crew and the landing, as well as equipped with powerful weapons. These are modernized T-90С tanks, infantry fighting vehicles BMP-3 and vehicles based on them, Tiger armored vehicles.
As for air defense, here customers are ready to stand in line for virtually the entire range of systems and complexes we offer - C-400 Triumph, Antey-2500, Buk-M2E, Tor-M2E, ZRPK Pantsir- С1 ”, Igla-S MANPADS. Today, these systems and complexes are on guard of the peaceful sky of many states of all continents. Soldiers of the customer countries have already appreciated their reliability and efficiency. Indeed, in this technique, the best achievements of previous versions, which have successfully manifested themselves in the course of real hostilities, are preserved and multiplied.
I want to note that the qualitative and quantitative alignment of Russian exports of military products meets global trends. At the end of last year, exports of defense products in the interests of the air force amounted to slightly more than 38 percent of all contracts concluded. The naval equipment occupied in the order book the order of 17 percent, the ground and air defense - respectively 14,2 and 26,2 percent.
- What are the recent trends?
- New direction of interests of foreign customers of Rosoboronexport - requests for high-precision weapons of increased power, as well as low-sensitivity ammunition. More and more attention is paid to the problems of the disposal of morally and physically obsolete ammunition. This is due to the fact that over the past 15 years, 40 has occurred in military depots in various countries around the world with serious casualties and heavy damage, which caused serious damage not only to the armed forces, the economy, but also the environment.
By supplying foreign customers with military products, transferring technology and providing various services as part of military-technical cooperation, Rosoboronexport always seeks to help its partners skillfully and organically adapt the equipment obtained to the existing national defense structure, to ensure that the whole system acts clearly, quickly, smoothly and reliably. This reduces their total cost, the cost of building and maintaining the relevant infrastructure.
- Will there be full-scale samples among ADEX 2014 exhibits?
- Of course. Both specialists and ordinary visitors of the exhibition are always interested in seeing not only layouts, booklets and photographs, but also real combat equipment. On the static platform, full-scale samples of the Ka-52 combat reconnaissance and attack helicopter, the BMPT-72 combat support vehicle and the Msta-S self-propelled howitzer will be presented. I am sure that these active exhibits will become a real decoration of the exhibition, a point of attraction for the genuine interest of participants and guests of ADEX 2014.
- What are the proposals in the Rosoboronexport case for discussion with foreign customers at the upcoming talks in Baku?
- The defining direction of our work are the requests of Rosoboronexport partners. Of course, we are interested in supplying our customers with a wide range of modern military products. It can be both large quantities of weapons and military equipment, as well as individual samples.
But I would like to emphasize that in the states of this region there is a large amount of previously purchased Russian military equipment. And no matter how reliable this weapon may be, it requires routine maintenance, repair, and resource renewal. And with the help of modernization, it is possible to significantly increase the combat potential of this technology, expand the boundaries of its use, bring it to the level of the requirements of a modern and prospective battlefield. This is an effective and inexpensive way to maintain the country's defense capability at the proper level.
There is another important vector of our activity. With Azerbaijan, as well as with other states, the organization and creation of service centers for servicing previously supplied samples are being actively discussed. Positive practical experience in this direction already exists. Also in the territory of Azerbaijan, licensed production of certain types of defense products is organized. Almost ready for production plant for the production of ammunition for grenade launchers RPG-7. The implementation of the contract for the organization of the licensed production of AK-74M machines is in full swing.
If we talk about the general trend, today in the process of military-technical cooperation with foreign countries it is necessary to move from one-time transactions to long-term cooperation with foreign partners, aimed at further integration in the development and production of modern high-tech military products, its effective service over whole life cycle. It is also important to acquire advanced technologies and equipment, to train highly qualified personnel, to create joint ventures.
- How rich will the schedule of work of the Rosoboronexport delegation with foreign representatives be within the framework of ADEX 2014? What technique will you promote in this region and how to do it?
- For the three days of the exhibition, we have planned a rather tense and tight schedule of meetings and negotiations with foreign delegations. With the help of multimedia presentations we will talk about our aviation, sea, land equipment, ammunition, small arms and air defense systems. The most in demand on the ADEX 2014 are aviation and helicopter technology - the Yak-130, Su-35, MiG-29М and Ka-52, Ka-226Т, Mi-26Т2 helicopters. Also at the talks will be discussed the stages of the fulfillment of our contractual obligations, to address issues of new deliveries. But this plan is not a dogma, but a guide to action. As the practice of exhibition activity shows, in addition to the pre-arranged visits, high-ranking guests, specialists and the military constantly come to the Rosoboronexport stand, asking to show and tell about the Russian military equipment. And we are actively working with these unscheduled visitors.
- What contracts are planned to sign on the basis of these meetings?
- Signing a contract at an exhibition is not an end in itself. It is much more important for us to meet with our partners, to present Russian military equipment, and an active negotiation process, during which the terms of future agreements are discussed. This is a huge, important and painstaking work. It is necessary not only to convince the potential buyer of the mutual benefit of the forthcoming transaction, but also to discuss the range of supplies, prices, equipment, terms, forms of payment, methods of delivery of equipment and hundreds of other nuances, each of which is of great importance. And the silence of the meeting rooms is more suitable for this activity than a noisy exhibition show. And when agreement on all points is reached, tens or even hundreds of pages of various documents are prepared, then the contract will be signed. And it is not so important whether it happens while the salon is in operation or somewhere else and at another time.
- Esen Tolenovich, I am sure that at the exhibition you will not be able to avoid questions about sanctions against the military-industrial complex of Russia in connection with the events in the east of Ukraine. After all, the delegations of Ukraine, the United States and many other countries that have imposed restrictions will work under the roof of the Expo Center in Baku.
- It does not bother us at all. We are accustomed to fierce competition and keen political overtones that permeate the entire world arms trade. And the US sanctions for us are not news. In recent years, the United States has repeatedly introduced various restrictions on the interaction of its enterprises and firms with Rosoboronexport. But we continued and continue to conduct our work, including with the United States. In any case, the contract with the Pentagon for the supply of Mi-17B-5 helicopters for Afghanistan is carried out in accordance with the schedule.
- In connection with the Western sanctions, the Russian defense industry complex has sharply raised the question of choosing a path: cooperation or import substitution. The success of Russian arms exports will not be able to develop without effective work of the military-industrial complex. Your opinion on this issue?
- I would not oppose these two directions. We need both.
In the era of globalization, no country can do one hundred percent without interstate cooperation in the production of modern weapons and military equipment. Russia is no exception. Moreover, after the collapse of the USSR, the historically established ties of the Russian defense industry complex with many enterprises of the military-industrial complex of some former Soviet republics remained. Now, for example, about one hundred factories of Belarus supply about two thousand items of military products for 300 enterprises of the Russian military-industrial complex. In turn, Belarusian manufacturers of PvPs need 900 products from Russian partners. Of course, there is no point in breaking off these mutually beneficial contacts. Moreover, it is necessary to develop and strengthen cooperation ties with other countries.
But today there is an example of Ukraine, which completely ceased cooperation with the Russian Federation on the MTC line. However, in the import of Ukrainian defense products, our country ranks fifth, behind China, Iraq, India and Azerbaijan. And although less than one-third of all defense companies in Ukraine are engaged in exporting military products to Russia, our country is forced to create production facilities that could replace Ukrainian supplies. Of course, this is a difficult process for us, but we can handle it. But for Ukraine, the situation is stalemate. Without the Russian components, how will the state deliver final products to its foreign partners on MTC? And there are simply no economic resources to create their own import-substituting base in Ukraine.
“But back to ADEX 2014.” In April, the Assistant Minister of the Defense Industry of Azerbaijan, Azad Mammadov, said that in the total volume of the country's military-technical cooperation, Russia ranks first. On the second - Turkey, then South Africa. Rosoboronexport not going to surrender leading positions in the Azerbaijani arms market?
- Of course not. And this is not just my opinion. It is confirmed by the statements of the leaders of the Ministry of Defense Industry of the country. They note that recently the republic has received from Russia T-90 tanks, heavy flamethrowing systems (TOC), Msta self-propelled artillery mounts, attack helicopters Mi-35М, infantry fighting vehicles BMP-3, armored personnel carriers BTR-82 and another technique.
I believe that military-technical cooperation with Azerbaijan is also ensured by such factors as the lack of a language barrier, similar state standards and industry standards, the presence of production and military personnel trained on common principles.
I want to believe that at the ADEX 2014 exhibition in Baku, our mutually beneficial cooperation will reach a new, even higher level.