A press conference of Anatoly Isaykin, General Director of Rosoboronexport OJSC, “15 years of Rosoboronexport: Stages of the Long Road” was held at the Cultural Information Center on Stromynka. The introductory remarks are offered to the readers of the Military Industrial Courier.
First of all, I would like to announce the results of Rosoboronexport for 15 years. This is exactly the time that has passed since the creation of our organization to this day.
What are these results?
Perhaps the most important one is that today, in a difficult market environment and unfair competition from a number of Western countries, I mean, first of all, sanctions, and not only against Rosoboronexport, but also the defense industry enterprises, the company does not reduce the planned annual indicators.
We expect that the plan for 2015 will be completed by us in full.
In November, 2013-th Rosoboronexport approved a development strategy for the period up to 2020 on the board of directors. Of course, then we did not think about all the negative manifestations that we see now. These are sanctions, ruble depreciation, and inflation. Nevertheless, on the whole, as it turned out, the general trends in the development of the global arms market were correctly determined, which helped to fulfill the main task - to maintain the rate of arms supplies at the level reached in 2012 – 2014. Let me remind you that in 2012, the volume of arms supplies through Rosoboronexport was 12,9 billion dollars, in 2013 and 2014 years - 13,2 billion.
Let's remember what we started with: in 2000, this volume was only 2,9 billion dollars. That is, over the past 15 years, we are talking about more than fourfold growth in export volumes. Over the 15 years, Rosoboronexport delivered Russian military and dual-use products to countries in 116 worth over 115 billions of dollars.
As you understand, this is a very large-scale work not only of the Rosoboronexport team, but also of the defense industry of Russia as a whole.
I would also like to note the following: today, on average, only in Rosoboronexport, which accounts for about 80 percent of the total volume of Russian arms exports, annually considers about one and a half to two thousand foreign customers for the supply of Russian military equipment.
Over the 15 years, Rosoboronexport has provided work in Russia for more than five thousand foreign delegations headed by defense ministers, their deputies, chiefs of general staffs, commanders of the armed forces. As a result of the marketing work of Rosoboronexport, almost 20 of thousands of various contractual documents were signed.
Rosoboronexport’s export order book now stands at 45 billion dollars. In general, over the years that have elapsed since the foundation of the 15 company, the annually fixed volume of the portfolio of orders for Russian MPP has increased fivefold.
Rosoboronexport's order book has become more stable and balanced in terms of types of armed forces. I think you all remember very well the beginning of the formation of Rosoboronexport, when almost 81 percent of all delivered products accounted for aviation technique. Now the portfolio of orders has been distributed more or less evenly across all types of armed forces.
The share of aircraft is 41 percent of the total supply. Equipment and weapons for ground forces - 27 percent. This is a pretty solid change, because in 15 years it means a more than tenfold increase in the supply of equipment and weapons through the ground forces. Air defense equipment - 15 percent and naval equipment - 13 percent. Four percent accounts for exported products in other areas, including space-related topics, special technical equipment, etc.
In the regional aspect, the largest in terms of volumes of deliveries of defense products today are carried out in countries of the Asia-Pacific region (42%). Next come the states of the Middle East and North Africa (36%), Latin American countries and CIS countries (approximately by 9%). The remaining markets account for about four percent.
What do we associate with the prospects for exporting Russian military goods?
Let me remind you that over the years, Russia confidently occupies the second place among the world's major suppliers of weapons. And we are aimed at further strengthening Russia's position on the world arms market and maintaining high export performance.
We are encouraged by the high competitiveness of Russian military products. We associate the greatest prospects with Sukhoi and MiG fighters, Yak-130 combat training aircraft, Mil and Kamov helicopters, S-400 and Antei-2500 anti-aircraft missile systems, and anti-aircraft missile systems Buk-M2E ”,“ Tor-M2E ”,“ Shell-C1 ”, ships of projects 22356 and 20382, submarines“ Amur-1650 ”, modernized tanks T-90SM, BMP-3 infantry fighting vehicles, new Typhoon and Tiger armored vehicles, Iskander-E missile systems and other models.
I believe that the project “Integrated safety of large administrative entities, critical facilities and state borders” developed in Rosoboronexport will also be in demand in the world. He is now causing considerable interest among our customers. Based on an in-depth analysis of possible threats, 10 model projects of integrated security systems were created (to protect borders, ports and the coastal zone, ensure the safety of cities, important industrial facilities, conduct mass events, etc.). Such a system forms a single information space for the purpose of coordinating and managing the actions of power structures, significantly increasing the effectiveness of the fight against criminals and terrorists, with unrest, illegal migration, which is very relevant in the world today.
In general, we are exporting thousands of unique products. At the same time, accounting and cataloging of the entire range of spare parts, materials, tools, auxiliary and training equipment, which are supplied to ensure the operation of exported military equipment, is carried out. The volume of this nomenclature is more than three million supplies, including those cataloged according to international rules and NATO standards.
If before military equipment was sold as such, now it provides a range of services to ensure the entire life cycle of the supplied military equipment: this is maintenance, modernization, repair and disposal of the old weapons. In many customer states, Russian specialists are creating repair bases, service centers, upgrading is being provided, and combat and technical personnel are being trained. All these are very important elements of Rosoboronexport’s integrated approach to military-technical cooperation, an approach that our military-technical cooperation partners rate highly enough.
As you can see, the past 15 years were for Russia and for us large-scale, significant and interesting. Of course, we took into account in our development the vast experience of our predecessors, including working closely with veterans of the military-technical cooperation system.
For the results achieved only in 2010, that is, over the past four years, state employees of Rosoboronexport, awards of the Ministry of Defense of Russia - 19 employees, FSMTC of Russia - 286 employees, the state corporation “Rostec” - 845 people, awards of others ministries and departments - 62 employees.
It is important to note that Rosoboronexport, speaking as a conductor of state policy in the field of military-technical cooperation, does not forget to actively participate in charitable and sponsorship activities. Over the years 15 we have spent several hundreds of similar events. Only this year, over 40 charity and sponsorship projects have been implemented.
In brief, this is the main thing that I wanted to say in the opening remarks.
Then Anatoly Isaikin answered questions from journalists
- How did the situation in Ukraine affect the export of Russian weapons and military equipment?
- A complete halt to cooperation between the military-industrial complex of Ukraine and the Russian Federation could not but affect export supplies. Of course, we had some time to look for options for replacing those components that came from Ukraine. But the main thing - our deliveries do not change to the smaller side. We carry out the plan. It is now October, the busiest month this year in terms of military-technical cooperation. And we are going ahead, not backward. For the future - either we will produce what was supplied earlier from Ukraine, or we will look for other options.
- Can you name the volume of deliveries of weapons and military equipment to Syria and what do we deliver there specifically?
- A lot has been said about Syria lately by the leadership of our country. The supply of weapons and military equipment to Syria is absolutely legitimate. And the very fact of these shipments is not a secret. They are aimed at combating terrorist organizations. There is nothing wrong with that. And no violations of international obligations. As for the nuances and details, you need to understand how sensitive this topic is. The quantity, the nomenclature and everything that is supplied to Syria is left out of our discussion.
- How would you describe relations with the Arab world in general and Egypt in particular over the past 15 years?
- When the “color revolutions” occurred in the Arab world, we were predicted of a recession, a sharp curtailment of military-technical cooperation and a reorientation of the Arab world to the states of the West. In fact, exactly the opposite happened. We not only preserved the traditionally friendly relations with such countries as Egypt, Iraq, Syria, Lebanon, I’m not even talking about more stable countries such as Algeria, but these ties in the area of military-technical cooperation have become stronger. We now have great prospects for the development of military-technical cooperation with these states. And now there are already quite good results: there are concrete agreements, negotiations are held for the future. So far I see only positive dynamics in this regard. The countries of this region today account for 37 percent of the supply of our weapons and military equipment. As a rule, these are complex agreements and they are designed for long-term supply, maintenance and modernization of the types of weapons that we supply and will supply there.
- How do the sanctions affect the activities of Rosoboronexport and what are the prospects in this regard?
- We were already under unilateral US sanctions. The result of these sanctions was that we increased the supply of weapons and military equipment by one and a half times. Now the stencils of the sanctions are already declared in the standard formulation, which is absolutely untrue for Rosoboronexport. We have never supplied missile technology to countries listed by the United States. Of course, sanctions affect in a negative way. First of all, it complicates financial calculations. The sanctions primarily concern US manufacturers, companies, banks, their branches and those who cooperate with them on the MTC line with Russia. Naturally, we feel some difficulties. Nevertheless, the calculations under our contracts go. We have become more flexible in this direction. With our traditional partners, we try to make payments in national currencies. And it already works on many contracts. Therefore, in the field of financial support of contracts, we do not see great difficulties. What else could be the difficulty? There was a certain share of imports of weapons and military equipment. More precisely, it was in previous years. We ordered it at the request of our partners on Russian equipment. Most often it was the desire of our customers and partners. They could take the Russian equipment either in the original configuration, or, at their request, they would install some elements of these systems that had been produced in this country for many years. We bought imported units, in particular, in France, in Italy. These were our main suppliers. Now deliveries are almost stopped. We began to look for options to replace products that are not shipped to Russia due to sanctions. But in general, this does not affect the supply. We find options for replacing with Russian or completing other countries. In fact, sanctions are beating more on the countries that introduced them.
- Please name the top five Rosoboronexport partners.
- India as was our leading partner, and remains. China is also our major partner. The rest of the five unstable. There is actually no such five. There are 10 countries that are our main partners. This we can do. It used to be like this: India and China - 80 percent, the rest - 20 percent. Now the situation is different - 10 countries occupy the volume of 70 percent.
- What are the prospects for Rosoboronexport cooperation with the countries of the Persian Gulf?
- We are now experiencing a new stage of development of cooperation with the Gulf countries. This is a state where traditionally the influence of Western European countries and the USA was strong. A few years ago we had close contacts with some Gulf countries, primarily with Saudi Arabia and the United Arab Emirates. Already then we conducted a successful series of contacts at the highest political level and at the level of the ministries of defense of these countries. And already then we established a good relationship. We began to understand each other more. If at that time we were not close to signing contracts, although there were such intentions with Saudi Arabia and for a significant amount, then a number of circumstances prevented this, which I will not list. Now, especially the last year and a half, there has been a sharp revival of contacts at all levels. Both at the highest political level and through military-technical cooperation. We have very good prospects with these countries for the development of military-technical cooperation. This applies not only to the supply of Russian weapons, but also joint development, primarily in the field of transfer of Russian technology and the creation of some samples of military equipment on the territory of these states. We already had such experience. You know that the Pantsir-С1 complex was created jointly with the United Arab Emirates. They partially participated in the investment of this project. And this experience just became the first swallow. He showed that cooperation between Russia and the Gulf countries at this level could lead to the creation of completely new types of weapons and military equipment that will be in demand not only in this region, but throughout the world. Now "Pantsir-С1" is in great demand. We received a large number of applications for it from different countries and deliver this ZRPK to different regions of the world. The instrument design office in Tula is busy.
Now there are negotiations with the Gulf countries on a very wide range of issues. But from the desire to cooperate to the transition to specific applications and further to the contracts, a rather significant period passes. It takes time for specialists to familiarize themselves with the equipment, then to form a technical image for the equipment that they need in the specific conditions of this or that country. After that it is necessary to carry out tests. Any state of the Persian Gulf, according to its legislation, should conduct tests of the selected equipment on the territory of these countries. The passage of bureaucratic procedures also takes considerable time. Therefore, it’s too early to talk about what this active work with the states of the region will result in, when and with what volumes of supplies. But these contacts are very progressive and fruitful.
- Egypt buys from France "Mistral". Will Cairo hand over Russian equipment and weapons intended for these ships?
- As for the "Mistral", an addition to the contract was signed, which said about the cancellation of the contract. This supplement contains all the conditions for the termination of this contract. One of the conditions is the dismantling of Russian equipment installed on these ships. It is now on the ships, and our brigades together with French specialists are engaged in this work. As soon as the dismantling will be carried out and the equipment from these ships will go to the Russian Federation, France will use these ships at its discretion. They can recycle them, they can sell them to some countries. This is the property of France. If the treaty is between France and Egypt, it will be an agreement of these countries. If Egypt asks to install Russian equipment on these ships or to buy Russian helicopters, it will be logical, since the ships were built under Russian Ka-52K helicopters. We, of course, go forward. And there will be no problems. But while there are no official appeals. It is early to say that more will be done.
- Tell me, please, how actively does Rosoboronexport take in equipping military equipment and other weapons with the Collective Collective Security Treaty Organization Collective Response Forces and do these structures have a priority right to purchase innovative products?
- Of course, we pay special attention to the development of military-technical relations with our closest neighbors and friends, and Kazakhstan is one of our main partners. The CSTO has agreements that allow for the so-called preferential deliveries, which differ for the better in price from commercial deliveries to other countries. Through our line with Kazakhstan over the past 5 – 10 years, contacts have become more intense. The latest joint statement by the heads of state of Russia and Kazakhstan speaks about cooperation in the field of not only the supply of weapons, but also the transfer of technology, the development of entire sectors of the national defense industry, a new step in the space field, which will give impetus to the development of space exploration, satellite launches and cosmonauts.
- Does Rosoboronexport have information on the safety of the Djigit man-portable air defense systems delivered in large quantities to Libya and Iraq? Is there a danger that these missiles will fall into the hands of terrorist groups?
- I have no data that anti-aircraft missile systems like "Dzhigit" were delivered to Libya. Any types of weapons can fall into any hands if the state is torn apart, there is no unified leadership and there is no unified army. It is difficult to say in whose hands are arsenals. There may be weapons from different parts of the world. The latest information suggests that in Iraq most of the weapons transferred by the United States have passed into the hands of ISIL and other terrorist organizations. In Iraq, we supply weapons only to the central government. Naturally, the contracts have a mandatory article on the prohibition of the transfer of arms supplied from Russia to other hands. We are confident that the Iraqi government will firmly adhere to this rule, as well as the Syrian one. Of course, war is war, and during hostilities, weapons can change hands. But in general, we do not supply weapons to hot spots, there is no such condition anywhere about the transfer of weapons and military equipment supplied to third parties. If such facts, violation of conditions are revealed, the corresponding decisions will be taken at the level of the Russian Federation. Contracts are not concluded with countries that violate these conditions. Similar rules exist not only in the Russian Federation, but also in other countries.
- How is the volume of imports of weapons and military equipment estimated at 2015?
- We have not summed up yet. Now we can name only approximate numbers. The volume of imports in previous years was about 100 – 200 million dollars. This year it will be much lower. I don’t think it will exceed 70 – 80 million dollars. This is an indicative figure.
- Describe the situation with the claim of Iran by C-300. How are the negotiations going and are there any deadlines, will there be results?
- The result will be positive. It's long история, the contract has been suspended. But at present there are no obstacles. Commercial negotiations are ongoing, this work is close to completion.
“Has Iran withdrawn its lawsuit from court?”
- I can say that this issue has been resolved and resolved positively. There is an agreement with the Iranian side that the claim will be withdrawn as soon as the contract enters into force.
- What is the situation with the supply of Mi-17B-5 helicopters to Afghanistan?
- Delivery of Mi-17 helicopters to Afghanistan was carried out under the contract of the Russian Federation and the United States. 63 helicopters were delivered. We know from personal contacts that Russian helicopters are very much in demand in Afghanistan. Only our helicopters are able to work in the mountain-desert terrain of this country. The fighting takes place there, as a rule, in the mountains, and Russian helicopters meet these conditions. Afghans are accustomed to reliable Russian helicopters with simple controls. Therefore, appeals from Afghanistan are constantly being received. But there are problems in that Rosoboronexport can supply equipment, but so far the supply of weapons and military equipment to Afghanistan at the expense of the United States. And in the face of sanctions, this will not happen. Therefore, the problem with Afghanistan is that it is necessary to find the means to purchase these helicopters in a commercial version or to receive in the form of assistance from Russia. But it depends on the leadership of the country and the Ministry of Defense. That Afghanistan needs these helicopters is obvious.
- How do you rate the prospects for military-technical cooperation with Vietnam?
- Vietnam is our old friend and traditional stalls. We are tied up by partnerships across all lines, both socially and politically. I rate the prospects for military-technical cooperation with Vietnam very high. The country is on the rise. And Vietnam can not only buy, but also produce military equipment. I think this direction will develop very actively in the near future.
- Tell us about the deliveries of C-400 ZRS to China and the prospects for concluding a contract, which has been discussed for a long time, on Su-35.
- China was the first country to sign the C-400 ZRS. Deliveries will be made on time. As for the Su-35, I will say only one thing - negotiations are underway.
- It so happened that the main supplies of aviation equipment were associated with the Sukhoi brand. In this regard, what are the future prospects of the MiG fighter? In which direction can this move and who are the possible customers for these machines?
- Indeed, Sukhoi airplanes are more popular. Prior to this, the MiG was more in demand, especially in India. The MiG brand has very good prospects. The MiG-35, for example, is an excellent aircraft. He has the opportunity to develop to the fifth generation lightweight fighter. Interest in him is very big. In addition, the MiG-29 in various versions is available now. Many customers are interested in these aircraft.