Shipbuilding Overtakes Aviation
// New rating of Russia's top defense enterprises
The Center for the Analysis of Strategy and Technology (CAST), an independent Russian analytical organization in the weapons export field, released its annual rating of companies by volume of military production today. CAST experts say that the Russian arms industry has stopped being export-oriented. The center estimates that the domestic market share of the top 20 defense companies increased from 32 percent in 2004 to 38 percent in 2005. “That tendency was especially notable in the activities of individual companies and sectors,” CAST director Ruslan Pukhov said. “By volume of proceeds of Almaz-Antei, Sukhoi and Tactical Missile Weapons, the share of the domestic military order reaches 30 percent.” Those companies are working on new-generation weapons systems – fifth-generation PAK FA, Su-27SM2 and Su-34 fighter jets at Sukhoi and the S-400 ballistic missile at Almaz-Antei.
Shipbuilding experienced a major upswing in 2005 as well. Total sales in that industry reached 59.5 billion rubles last year, up from 28.5 billion rubles in 2004. While aircraft builders' sales fell from a record 74.2 billion rubles to 50.4 billion rubles, the shipbuilding sector has become the leader of the military industrial complex for the first time since 2001,” center deputy director Konstantin Makienko noted. It can also be seen from CAST data that helicopter-makers' sales grew last year after falling the year before, but still have not reached 2003's record level. Engine-makers also had record sales, after a slight loss in 2004. “However, taking inflation into consideration, we should probably speak of stabilization of sales,” Makienko noted of the helicopter market.
Certain factors remained constant, the predominant export orientation of the main defense industries, for instance. Export accounted for 60 percent of their production, in spite of growing state orders. The low level of diversification in the aircraft industry also remains. Its level of civilian production does not exceed 7 percent, which is an indication that Russia still does not have a competitive product for the civilian market. Air defense manufacturer Almaz-Antei has been the leader in the rating since its inception in 2003, with sales of 50 billion rubles this year. It united more than 40 enterprises. Its air defense systems for ships accounted for 15 billion rubles of its proceeds, in state and export orders. It also had 5-billion rubles' worth of civilian orders.
CAST predicts that aircraft construction will regain its leading position next year, thanks to orders from India and Algeria and a possible order from Indonesia.
Konstantin Lantratov, Ivan Safronov
All the Article in Russian as of June 13, 2006
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Photo: Alexey Kudenko
