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Rosoboronexport: Russian weapon systems were exported to 43 countries in 2018

JSC Rosoboronexport (a subsidiary of the state corporation Rostec) is the sole Russian arms exporting company. In 2018, Russia held the second place in the global arms market: the country gained a defense revenue of some USD15 billion, with Rosoboronexport accounting for USD13.7 billion.

VPK's Tigr-M, now widely distributed in the Russian army, is also a success story on the export market (Picture source: Army Recognition)

Director General of Rosoboronexport Alexander Mikheev told about the relevant tendencies of the global arms market development and the company`s strategy under current conditions. in an interview with the news agency TASS.

Alexander Mikheev headed Rosoboronexport in January 2017, when the sanctions imposed by Western countries (including those against Russia`s subjects of military-technical cooperation system) were gaining momentum. Since that moment, the sanctions have become much tougher; however, the volume of Russian defense exports through the medium of the company has increased. In 2018, it exceeded the planned figure and reached USD 13.7 billion.

- How could you describe Russia`s position in the global arms market?
In 2018, Russia held the second position in the global arms market with a defense export revenue of approximately USD15 billion.

- France is reported to be close on Russia`s heels, planning to get ahead of it…
Considering France, this country has been holding the second place in the global arms market for a long period of time. Due to large arms exporting contracts signed between France and its partners, this gap might be narrowed. However, this case will be temporary.

- What methods are you planning to use to hold the company`s positions?
The development of industrial partnership is our main trend. Along with the evolvement of industrial sales models and technological cooperation with our partners, we are working on the transfer of technologies and conduction of research-and-development programs. The history of military-technical cooperation between Russia and its foreign state partners has seen many examples of successful implementation of such projects.

Among recent cases is the establishing of a Russian-Indian joint venture (JV) to build 200 Kamov Ka-226T ‘Hoodlum’ light utility helicopters (the rotorcraft has been developed by Rostec’s holding Russian Helicopters), of which 60 vehicles will be produced in Russia and 160 in India. In March, a JV to manufacture Kalashnikov AK-200-series in Korwa, India started functioning under the ‘Make in India’ program announced by Prime minister of India Narendra Modi. The licensed production of the Kalashnikov assault rifles has already been established in a number of other countries. India previously launched a licensed manufacturing of a wide range of Russian-designed weapon systems, including the Sukhoi Su-30MKI ‘Flanker-H’ multirole combat aircraft, T-90S/SK main battle tanks, and Mango [armor-piercing fin-stabilized discarding sabot] rounds. We have also implemented the BrahMos project with India and Hasheem with Jordan. Joint R&D works are being conducted at both Russia`s design bureaus and scientific facilities of our foreign state partners.

- Modern and cutting-edge weapons are mostly in high demand in the global arms market. Does Russia have something to offer in this area?
We offer a full range of ready-use products for all military services and branches. The maintenance of a portfolio that comprises advanced and competitive systems, ranging from naval to space platforms, is a priority for Rosoboronexport.

Some of our partners exceed Russia in the field of high-technological industry. For instance, the People`s Republic of China owns a sophisticated industry that produces unmanned aerial vehicles, composite materials, and electronic components.

Someway or other, every technological area has its own leader. At the same time, pay attention to Russia`s cutting-edge unmatched developments, namely, the Sarmat missile system, unmanned underwater vehicles, the Kinzhal [Dagger] air-launched missile system, and laser and hypersonic weapons. These systems incorporate technologies that will sustain the country`s security in years to come. Thus, Russia has exceeded our partners in this field and not the reverse as you say.

- However, the above-mentioned systems cannot be exported…
Of course, the issue is not about it. We are speaking about the rapid development of Russian high technologies.

- Are you aware of your competitors?
We have nothing to be aware of. We are against unfair competition, including the sanctions imposed by the United States of America and the state members of the European Union. This is the main negative tendency. The exerting of a heavier pressure on Russia and, particularly, Rosoboronexport in recent half-decade has caused some issues in the area of military-technical cooperation.

- Could you describe these issues?
The disintegration of our international cooperation divested us of [foreign-made] engines, various components, electronic items. This case gave us an opportunity to develop our own production of these classes, and an import replacement program was initiated. Now we do not have such a problem.

The sanctions imposed by Western countries are the main instruments of unfair competition. They affect our industry, partners, and the complete global arms market. I am certain that the sanctions also have a negative impact on their introducers. The rules of conventional international trade cannot incorporate such a philosophy: "they are bad guys, do not buy their products; you`d better procure something from us". Any pressure and intimidation shall be excluded from this field.

- Do you think you have dealt with temporary issues?
Yes, of course. The defense industry has also overcome its problems [in this area]. Our backlog of orders has reached USD50 billion and will be implemented in the upcoming three or five years. One can Imagine a number of works behind these figures.

- What are the changes in Russia`s geography of arms sales?
One can state that the Asia-Pacific Region is now inferior to the Middle East and North Africa [MENA] in terms of our geography of sales. More than 100 countries operate Soviet- and Russian-made weapon systems, support and maintain them, and acquire new items. In 2018, we deliver hardware to 43 foreign countries. We know our capabilities, and if it was not for sanctions, we would have expanded the geography of our sales in a more substantial way.

- What was the potential for the geography of your sales last year?
We have almost ceased cooperation with the USA and the countries of Western Europe. This situation has affected our partnership with other countries. For instance, the Afghan military successfully operates Mi-17 ‘Hip-H’ utility helicopters that were procured by the Pentagon. The United States has now decided to replace these air platforms by their Black Hawk-family rotorcraft, the payload capacity and robustness of which cannot even match those of the Mi-17.

- How did the structure of the Rosoboronexport`s deliveries change in 2018?
The main trends remain the same. Neither the volume of the backlog of orders nor structure of the deliveries was subject to any drastic changes. In 2018, combat aviation accounted for 45% of our deliveries, land platforms for 20%, and air defense systems for 17%.

- In your opinion, how long will the sanctions remain in effect?
Unfortunately, we do not see any positive changes. Russia calls the United States and other countries for a balanced approach and revising of the previously made decisions. All things must pass, and the sanctions are not an exception, we hope. At the same time, we have mastered working under these harsh conditions.

- What breakthroughs would you name?
In the last half-decade, we have introduced several new weapon systems to the market. This list includes the S-400 Triumf ‘SA-21 Growler’ air defense system, Sukhoi Su-35 ‘Flanker-E+’ supermaneuverable multirole combat aircraft, Kamov Ka-52 ‘Hokum-B’ combat helicopter, and BMPT Terminator tank support combat vehicle. In 2018, we offered Sukhoi Su-32 ‘Fullback’ frontline bomber, Ilyushin Il-76MD-90A(E) military transport aircraft, Sprut-SDM1 light amphibious tank, tor-E2 surface-to-air missile system, Pantsir-ME naval anti-aircraft gun-missile system, Kalashnikov AK-200-series assault rifles, and other weapons. We are planning to strengthen the portfolio pf our products with cutting-edge counter-unmanned aerial vehicle (C-UAV) systems as these devices are in high demand.

I do not want to label our achievements breakthroughs or less important events. The work of several hundred thousand workers and several thousand defense enterprises is behind our efforts. One shall treat this fact with unlimited respect.