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Sergey Chemezov reported to the Federation Council on the progress of diversification

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Image source: © РИА Новости / Евгений Биятов

TSAMTO, April 13. Sergey Chemezov, General Director of Rostec State Corporation, spoke at the Federation Council on April 13 as part of the "Expert Time" on the topic "Diversification of production of Rostec State Corporation organizations".

The head of Rostec told the senators at what pace the enterprises of the military-industrial complex are adapting to the production of civilian products, noted the key developments of the State Corporation in this direction, and also called the difficulties faced by the defense industry and ways to overcome them.

According to Sergey Chemezov, Rostec organizations not only successfully solve the diversification task set by the president, but also do it ahead of schedule: "according to the results of last year, the revenue of our organizations from the sale of civilian products has already reached 45%. In monetary terms, this is more than 900 billion rubles." Thus, over seven years, the revenue of Rostec State Corporation from the sale of civilian and dual-use products has tripled, from 316 billion in 2014 to 928 billion in 2021. As an example, Sergey Chemezov cited the Kalashnikov concern, which in recent years has mastered the production of vessels for various purposes, unmanned aerial vehicles, medical devices (under the Baikal brand) and equipment for athletes, hunters.

Sergey Chemezov also noted that the sanctions pressure from Western countries opens a "window of opportunity" for Russian defense industry enterprises. "On the one hand, we have already faced a refusal to supply foreign-made components to our organizations. On the other hand, the withdrawal of Western companies from the Russian market opens up new prospects for us, primarily in the supply of modern and popular civilian products. Rostec organizations are already producing products that are in no way inferior to foreign analogues, and I am sure that in the future there will only be more of them. We are ready to fight for the domestic consumer, and we are confident that we will be able to earn his recognition and trust," he explained.

The success of diversification, Sergey Chemezov stressed, largely depends on the staffing of enterprises. To this end, Rostec organizations enter into partnerships with leading universities in the country in order to jointly create the most high-quality and modern educational products.

The head of the State Corporation elaborated on the key developments of the holdings included in the Rostec contour. Thus, by 2023, the leading domestic manufacturer of KAMAZ trucks will assemble K5 family cars: mainline tractors, transport vehicles, heavy dump trucks and other equipment – entirely from Russian components. In addition, Rostec is working on localization of an engine with a capacity of up to 500 hp, which will be in demand not only at KAMAZ, but also at other Russian vehicle manufacturers.

Another innovative development of the Kama automaker, electric buses, has also proved itself positively: during the year of operation in Moscow, they reduced the amount of greenhouse gases by 30 thousand tons.

In-demand special equipment is produced by enterprises of the holding company "High-precision Complexes": mini-loaders, excavators and tractors. In 2021, the holding's enterprises shipped more than 500 units of such equipment in total, including for export to Kazakhstan, Armenia and Venezuela.

In addition, Rostec enterprises produce agricultural machinery under the brand "Rusich". Over the past five years, the output of these products has tripled.

Covering the topic of aircraft construction, one of the most relevant today, Sergey Chemezov noted that the first six serial MS-21 airliners with a domestic PD-14 engine will be delivered to customers in 2024. "Also, from 2024, we plan to establish production of an import-substituted Sukhoi Superjet aircraft with domestic PD–8 engines in the amount of 20 units per year," he added.

At the same time, the head of the State Corporation named the main barriers to the development of civilian production: high interest rates on loans, a shortage of large-scale projects for the development of civilian products, as well as a shortage of own funds and the creditworthiness of defense industry enterprises.

According to Rostec CEO, it is possible to overcome them by involving private investors in the diversification process and creating public-private partnerships. "In addition, proposals for the development of diversification in terms of financial institutions include: granting the Government of the Russian Federation the right to establish key performance indicators of state banks for financing the civil activities of defense industry organizations and the development of a tool for preferential lending of working capital of defense industry enterprises," Sergey Chemezov stressed.

Another measure designed to accelerate and expand the diversification of defense industry production, Sergey Chemezov called the creation of a "virtual SEZ", as well as the equalization of support for the domestic defense industry and foreign companies in Russia. According to him, defense industry enterprises "should be able to use the full range of benefits and support mechanisms that have proven themselves in the creation and development of special economic zones and territories of advanced development." In order to achieve these goals, the Ministry of Industry and Trade of the Russian Federation should become the administrator of a special "virtual economic zone". Any defense industry organization will be able to work on the site of such a SEZ if it produces civilian products included in the list of the Ministry of Industry and Trade.

The head of Rostec also called for forming a system request for civilian defense industry products for several years ahead, noting that "it is necessary to organize interdepartmental groups at the government level that will form a system request for civilian products with a planning horizon of 5-10 years. In addition, they will evaluate programs and projects of state corporations and large enterprises in terms of eliminating import dependence on basic and critical technologies."

The message is posted in open access on the website of Rostec Group of Companies.

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