Rus News Journal

We have united everything that could

During the last years Russia began to increase actively deliveries of helicopter technics and engines - both for internal needs, and for export. How relations from the Minister of Defence develop and it is necessary to resort to what strategy for fastening in the world market, in interview to the correspondent to Ivan SAFRONOV the head of corporation " has told; Oboronprom ANDREY REUS.
In hi-tech branches there is only a world competition
- In oboronno - an industrial complex there was a tendency to association of the enterprises in holdings. So has occurred and with Oboronpromom . You supported this idea?

- I took direct part in working out of those strategy, in which frameworks this integration was carried out. It was in 2004 - 2007 when I held a post of the deputy minister of the industry and power and supervised mechanical engineering and oboronku including. Working out and realisation of strategy of similar cooperation became our answer to country leaders instructions on formation of an industrial policy as that. The thesis that the best industrial policy is its absence up until that time dominated.

is a correct way for mechanical engineering?

- I am convinced that we sorientirovany is correct. My work in Oboronprome last five years has convinced me of that, as financial, both organizational, and political tools have played defining role in mechanical engineering revival. In world vertoletostroenii, for example, operates five recognised players: Sikorsky, AgustaWestland, Eurocopter, Bell and Boeing. Now it some kind of club have joined and Helicopters of Russia . And after all in the beginning 2000 - h years Russian vertoletostroenija as world business - the factor did not exist. Yes, there were some separate factories which struggled for a survival and let out the smallest volumes of technics. The share of the Russian helicopters was estimated at this time in 3 %, was issued about 80 helicopters in a year. Us have simply ceased to notice!

starting conditions of competitive struggle at us and our foreign partners were initially different. Competitors Helicopters of Russia as the holdings definitively generated during post-war time, by the time of disintegration of the USSR already were serious world players. It, by the way, concerns also to a situation in dvigatelestroenii where United dvigatelestroitelnoj the corporation (ODK) should to start compete to such grandees, as General Electric, Pratt and Whitney, Safran, Rolls-Royce. Therefore if you want to rise level with leaders it is necessary to concentrate intellectual, industrial, financial, personnel potentials in very deadlines and to create such structure which can be accepted in this elite club. We have generated such company which for eight years became the third on sales volumes of helicopter technics in money terms. helicopters of Russia occupy already 14 % of the market in cost expression and are recognised by the leading world companies as the real player. On my belief, such policy at least on an example vertoletostroenija has shown the efficiency. It should continue development.

- you do not agree what creation of similar holdings reduces a competition in the country and by that slows down rates of development?

is a clinical nonsense! In modern mechanical engineering there is only a world competition. All leading players - both in aircraft construction, and in vertoletostroenii, and in dvigatelestroenii - practically always represent one country and one company. And we were offered to create at home some structures which would compete among themselves. And that we it would achieve? That any of them would not be the player in the world market and eventually would be absorbed by the world leader. We at the expense of one only consolidations have straight off received a synergy about 15 % to efficiency growth.

- only at the expense of consolidation?

- With helicopter branch, of course, to us has very much carried: after all we had very talented designers, fine engineering schools. Thanking their reserves to us it was possible to make jerk quickly enough. Now we have necessary resources to develop new products. We have united everything that could, for definite purpose achievement. Other chance of the world market to leave simple was not.

When in the country result the direct competitor to own manufacturer it it is unpleasant
- Now there is a dispute concerning orientation of the enterprises of the industry on internal or on a foreign market. What this proportion in production Oboronproma ?

- Now this proportion is displaced towards the internal order. Some years ago the parity was 70 % on 30 % in favour of deliveries abroad. Now the parity of export production and internal was levelled and became parity.

in growth of the internal order an important role long-term contracts in the area of the Minister of Defence with whom we have signed large and strategically important contracts up to 2020 have played. Oboronzakaz makes to 30 % of volumes of our production. Thus we at all do not want to lose a foreign market - after all it is an indicator of the status of the company. If your production buy in the world market, means, you trusted by consumers. As a whole Helicopters of Russia grow from year to year - and quickly enough: in 2011 we have let out 265 cars, and in 2012 - m we are going to increase quantity to 300 units.

it is real?

is a serious jump. But in development strategy Helicopters of Russia are defined both necessary resources, and ways of realisation of such problem. By 2015 the company in general should leave on level of 400 cars.

- the Ministry of Defence declared the tender for easy helicopters. From tender conditions it is visible that it will be not Ansat and not Ka - 226, and any foreign analogue. Your opinion?

- When the state department actually results in the country of the direct competitor to own manufacturer is an unpleasant news. At Helicopters of Russia there are necessary technologies in this segment - in particular, named you Ansat and Ka - 226. We offered them the Minister of Defence. We constantly hold on control a situation with their manufacture and are ready to gather as much as possible and after a while to put this technics not only for the Minister of Defence, but also on the market. World practice of mutual relations of military men and the industry shows necessity of inclusion of research and development for structure of the defensive order.

- and in what condition now there is Ka - 226?

- Ka - 226 is a working car: it is made and on sale. There is still car Ka - 226 which batch production will begin shortly. We have involved the investment credit of Foreign trade and investment bank, have concentrated design and industrial resources on this project, have equipped the car with the French engine Arrius. Thereupon for me the Indian tender for 197 easy helicopters is extremely important. And the direct competitor in this tender at Ka - 226 - just one of cars Eurocopter (AS - 550 Fennec. - ) which the Ministry of Defence plans to buy.

- What, in your opinion, chances of Russia in this tender?

- I consider that very high. This car (Ka - 226. - ) on 100 % corresponds to all specifications of the tender.

- at you plans on creation of joint venture with Eurocopter have remained?

- With Eurocopter different joint projects were discussed, but any of them has not gone to life from - for contradictions in strategy of development of our companies. But we are aimed at cooperation with world leaders in those segments which will make us more strongly. Creation of joint venture - a question uneasy. For example, on creation of joint venture with AgustaWestland at us has left two and a half a year of work. And only this year we will start to do the first cars AW 139, and then and AW 119. In comparison with our volumes release of these cars is not so considerable, but to us cooperation was important. We train the personnel according to modern business - standards, we study in the modern organisation of manufacture and an aftersales service. Certainly, we will expand manufacture localisation. But taking into account that we are focused on the world market, localisation for me is that we are able to do for the whole world in what we are competitive.

- let`s remember that was with gosoboronzakazom in 2011. You then have signed the first long-term scale contracts. How many cars Ka - 52 will be bought the Minister of Defence?

- the Order of 140 units.

- problems at the conclusion of contracts arose?

- With customers negotiations always go rigidly enough. The question often rests against profitability. I consider that the mechanical engineering is not that place where receive superprofits. The planned norm of profitability should be above as it allows branch to develop and be put in new products. But under the contract on Ka - 52, I consider, conditions were comprehensible. For us the long term of relations because five - or the seven-year contract is possibility there and then synchronously was important to conclude long-term contracts with suppliers and komplektatorami. It is perfect other economic model as there is a clear formula of the price. And if there is an understanding of the price, that is possibility it to keep.

- that will sign from the Minister of Defence in 2012?

- variety of documents and on dvigatelestroeniju, and in addition on helicopter subjects Now prepares. In dvigatelestroenii as earlier and in vertoletostroenii, we pass to long-term contracts. This year our teamwork goes much faster, than in the past. Now we discuss the additional agreement on delivery of Mi - 35. In total till 2020 we plan to put to military men about 1 thousand helicopters.

- workings out on a fighter of the fifth generation of PAK FA now are actively conducted. Who will be the main developer of the engine for it?

- Structure ODK is under construction on divizionalnomu to a principle: earlier the power battalion, and in the end of the last year - battalions of helicopter engines and engines for fighting aircraft has been created. In the last all management of the project of creation of the engine for PAK FA is concentrated. To base design offices under this project became Scientifically - the technical centre of a name of the Cradle. But, as a matter of fact, this project became cooperation within the limits of ODK, and factories are included in it in Ufa, Rybinsk, Moscow. Very actively works in this cooperation and Salute which de - fakto already is participant ODK.

for the sake of purchase we will not make Purchase
- whether claims from outside " Were shown; Civil planes Dry (GSS) on engines for passenger SSJ 100?

- There is no that manufacturer of planes who would not abuse the manufacturer of engines. ODK is in the closest contact with GSS on deliveries of engines. There were problems, for example, with terms of certification SaM146, but it is problems of any new product. The schedule of deliveries of engines literally for each car is now confirmed.

though program SaM146 for us, we will softly tell, is not effective in the monetary plan. For this reason we will bring an attention to the question on subsidising of this project. It is normal world practice: for a conclusion of the new engine to the set cost price the certain help is necessary from the state. It, of course, renders it and now, but it is necessary to understand that for a conclusion of the new car to the market and self-support the long time interval is necessary.

- What is the time should pass to pass a break-even point?

- Under that starting order on SaM146 which we have, - about seven years.

- the decree project on occurrence Salute in ODK now is highly readiness for signing. Do not think Ukrainian Motor Sich to include in structure ODK?

- We work with Motor Sich on the basis of five years` contracts, we have a number of joint programs - for example, on the engine for Mi - 26. Whether it is interesting to us as the company? Yes. But now we about purchase do not conduct negotiations, though earlier the question was studied.

- that became a key occasion to refusal?

- the question Price. For the sake of purchase we will not make purchase.

- and engine NK - 93 in what now a condition?

- ODK works in existing market conditions: There is a demand - there will be an offer. On NK - 93 we have not found demand. OAK does not plan to apply this engine on developed and maintained aircrafts. Engine NK - 93 was developed alternatively to the base engine of type PS - 90 for planes Silt - 96 and They be 330. But in plans of aviabuilders release of these types of planes is not provided.

with NK - 93 I see that case when received during performance OKR on this engine results become a basis scientifically - a technical reserve and can be used by working out of perspective engines of average and big draught for passenger and cargo or military - transport aircraft. But I will underline that ODK in this case acts in a role komplektatora and will start with requirements of aviabuilders.

- integration of the enterprises into branches dvigatelestroenija is actual?

- the Answer to this question is obvious. We have collected all intellectual and industrial resource of branch, the enterprises have ceased to struggle among themselves and have started to work in the world markets. In ODK the uniform engineering centre which unites design shots of all enterprises of holding already operates. In corporation the list of the basic projects which should provide competitiveness of domestic products in the world markets in the nearest 40 - 50 years is already made. It is the project of family of engines PD - 14, the engine for PAK FA and the perspective high-speed helicopter, gazoturbinnoj installations for small power. The industrial policy has innovative character, it is aimed at support of such projects that substantially facilitates to us this work. We plan that by 2020 ODK should be fixed in the five of world leaders.

- the government helps your enterprises?

- the Help of the state for some enterprises was, it is possible to tell, solving: about ten factories were on the verge of bankruptcy. But the toolkit of an industrial policy - direct investments in an authorised capital stock, subsidising of interest rates, state guarantees under credits, etc. - has allowed to stabilise a situation and to begin normal development, modernisation and manufacture modernisation. Practically all proryvnye projects - the same PD - 14 and the engine for PAK FA, the perspective high-speed helicopter (PSV) - are financed from means of budgetary target programs. In particular, 400 million rbl. have been directed on project PSV, 2,5 mlrd rbl. - on the project of Mi - 38, 652 million rbl. - on the project of Ka - 62, nearby 14 mlrd rbl. - on project PD - 14.

Sometimes it is possible to hear that to India and China it is possible to sell everything, everything
- In what condition now there is a contract from the USA on delivery in Afganistan 21 helicopters Mi - 17 - 5? How many cars are put?

- the Contract is carried out according to the conditions, nine units are already delivered in a disposition place. It is a sign for business - communities - some kind of the certificate of that recognition that our technics of very high quality.

- as our helicopters have proved in India? The customer was happy?

- When the customer is dissatisfied, he does not buy. Still sometimes it is possible to hear opinion that to India, China, other countries it is possible to sell everything, everything. It not so! The Indian and Chinese partners, for example, very carefully concern selection of technics and purchases of arms. As a whole I can tell that India and China are our strategic partners. Now there is a realisation already signed on a line Rosoboroneksporta The contract on delivery to India 80 helicopters Mi - 17 - 5, we participate in the tender for easy helicopters with our Ka - 226, there works as the joint venture on service of helicopters and factory on assemblage of engines under the licence.

- what countries, in your opinion, are most important for Russia as partners? Now and in the future?

- Was and there is India. Now, after some break, we have started to increase deliveries of helicopter technics to China. Traditionally much we delivered engines: now the volume of deliveries gradually grows. In 2012 we plan to leave for a boundary of $2 mlrd on deliveries in this country.

- what technics deliver?

- Last deliveries is a contract on 32 units of Mi - 171. We deliver also Ka - 3211 which also buy from us and the Indian customers.

- what relations with Latin America?

- Yes, it too very important market for us. We long for it struggled. On a line Rosoboroneksporta there are deliveries of Mi - 35. From the civil technics Helicopters of Russia have started to deliver there Mi - 8/ 17 and Ka - 3211. On a hand plays that in Brazil the principle of the open sky, including over big cities operates. Now this question is studied in China and India. The density of use of helicopter technics will raise that considerably expands our possibilities.

- whether creation of joint venture with China is possible?

- We consider offers of the Chinese party on co-production of actual helicopters in territory of China, we discuss joint designing and release of the heavy car. Besides, in a province of Tsingtao the helicopter service centre is completed. Speaking about creation of the international network of the service centres, would like to underline that we in the work with consumers pass to the new logic of business dealing. The demand of our technics is defined not only characteristics of the product, but also presence of accessible and effectively working system of service. Therefore we learn to build business on sale of all life cycle of a product.

when the price of money in the markets differs, our mechanical engineering starts to lose
- Now the government has allocated for maintenance OPK nearby 3 trln rbl. How many will get to you?

- In the area of various FTSP in 2012 on projects and programs Oboronproma it will be directed nearby 10 mlrd rbl. of All to the period with 2013 for 2015 it is planned to receive nearby 40 mlrd rbl.

- Credits take?

- It is necessary. In the state banks annual in roubles manage in 7 - 10 %, in currency - in 8 - 12 %. And here in the USA, Great Britain, Germany and France our competitors obtain long-term credits under 2 - 4 % annual. For a real competition financial conditions not worse, than at competitors are necessary. When the price of money on domestic and world financial the markets differs, our mechanical engineering starts to lose in competitive struggle.

- in the near future you will change structure Oboronproma ?

- In helicopters of Russia basic changes have occurred last year and they have been connected with a company exit on IPO. Helicopters of Russia have passed on MSFO, independent directors have been entered into structure of board of directors. And, even in spite of the fact that placing has not taken place, Helicopters of Russia today works as the public, open company. In ODK structural changes as I already spoke, have been connected with transition on divizionalnuju a control system. If to speak about new kinds of business here it is necessary to mention subjects of pilotless flying machines which we develop with use of technologies of Israeli company IAI. We see prospect of this market.

- what financial indicators Oboronproma for 2011?

- the Gain Oboronproma as holding structure has made 229 mlrd rbl., net profit - 15 mlrd rbl. In 2011 for the first time dvigatelestroenie left on break-even.

- and what indicators put this year?

- At least 15 - percentage growth we will give. By 2015 we should make production and render services on 500 mlrd rbl. It I promised to Vladimir Putin during an exhibition MAX - 2011.