In a 29 December interview on Vesti’s Rossiya-24 program, Deputy Prime Minister Sergey Ivanov addressed modernization, development, arms sales, and defense industry. He said international demand for Russian air defense systems has led the government to take a decision to extend credit for Almaz-Antey to build two new factories.
As written in an earlier post about shortfalls in productive capacity in the OPK, this possibility has been under discussion since at least last February.
Military Parity picked up additional RIA Novosti coverage of Ivanov’s remarks:
“This year we decided on additional support to ‘Almaz-Antey’ and the allocation of credit for the construction of two more factories.”
Ivanov explained that most of Almaz-Antey’s production is going to satisfy the Russian Army’s requirements, and:
“Now they don’t have production capacity for large volume exports. But this good, if it’s possible to call it that, is in great demand on the international market.”
A bit from the video . . . Ivanov’s interviewer asks about the state of military-technical cooperation (i.e. arms sales), and aviation’s role in it. Ivanov says it got along “not badly” in 2010. Arms sales exceeded $10 billion for the first time. This, he says, attests to the competitiveness of, and demand for, Russian equipment, and so, in many areas, the defense sector isn’t doing badly. Aviation represents more than a third of arms sales, or more than $4 billion. He thinks military transport aviation sales have a good future, and, of course, buyers stand in line for Almaz-Antey’s PVO systems. Thus, with internal and external demand, the need for two completely new factories.
Of course, saying they’ve decided for two factories is not the same as actually building them and starting new production lines.
Things arent going all that well on the export side. Rosboronexport’s order book stood at +/- $40 billion at the end of 2009. At the start of December of 2010 that number had dropped to +/- $30 billion. +/- $10 billion was successfully exported. At the end of December they got the order book back to $40 billion thanks entirely to India signing off on the PAK-FA and the truth is a final Indian order could still turn out to be vapor. Essentially no major contracts were signed in 2010 to take the place of the orders that were fulfilled during the year.