Uralvagonzavod anniversary arguments for Premier Putin

19.09.2011 — Analysis

The Russian Expo Arms - 2011 exhibition that took place in Nizhny Tagil showcased a record-wide range of Russian armament. Military products were displayed by about 300 enterprises. Despite the impressive number of participants, the Uralvagonzavod Research and Production Corporation came up with the largest display. It was prepared by nine defense enterprises. Vladimir Putin's visit to the Urals and his assessment of the defense manufacturers' performance came into focus of the RusBusinessNews reporter.

New tank and overseas allies

The exhibition was timed to coincide with the 75th anniversary of Uralvagonzavod; the main and broadly advertised event was the visit of Russian Prime Minister Vladimir Putin to the tank T-90AM display.

De jure, it is a profoundly upgraded tank T-90S, which is supplied to the Russian and foreign armies. De facto, T-90AM is virtually a brand-new tank. The engine power reached 1,130 horsepower - by 130 more than the engine power of T-90S. In addition, the steering wheel control system replaced the former lever system used in its predecessors. The Relikt explosive reactive armor of the fifth generation protects the tank turret and hull against all existing anti-tank shells and missiles. The vehicle is equipped with a remotely-operated machine gun, and the upgraded gun is designed to hit the target within the 5 kilometer distance. It has already been nicknamed a "long arm", as none of the world's existing tanks can shoot a shell or a missile to such a distance.

Having spent some time at the steering wheel of T-90AM, the Russian Prime Minister gave positive assessment to the new vehicle. "Today's achievements of the enterprise are impressive. The armor and weapons have been improved", Vladimir Putin stated, while pointing out the importance of giving primary attention to future-targeted advanced technologies.

However, to the manufacturers' dismay, the way to advanced technologies is not as smooth. In his conversation with the RusBusinessNews reporter, Oleg Sienko, General Director of the Uralvagonzavod Corporation, said that the government defense order is inefficient in its present-day form. "It gives no opportunity to companies operating in the military industrial complex to apply new technologies. Therefore, they have to upgrade old hardware. The system of defense orders must be modified to make us more interested in filling the product line with new products", he pointed out.

In 2011, the RF Ministry of Defense lingered on signing contracts with defense enterprises, and the order was actually torpedoed. The military tend to criticize defense enterprises for either obsolete hardware or inflated prices. However, the products manufactured by Uralvagonzavod are in demand on the market. The CIS countries are the main "ally" of the corporation with their armament represented by hardware manufactured during the Soviet period.

A spectacular example is the cooperation between the corporation and the Republic of Kazakhstan. Uralvagonzavod supplied several tank support fighting vehicles (BMPT) for the Kazakh army; the BMPT vehicles were also showcased at Russian Expo Arms - 2011. The Russian Ministry of Defense was not interested in the new product, though the vehicle passed successfully the government tests. BMPT is designed for the upgraded chassis of the T-72 tank. BMPT can destroy tanks, infantry combat vehicles, helicopters and low-altitude aircraft.

Talgat Zhanzhumenov, Deputy Defense Minister of the Republic of Kazakhstan, esteemed BMPT most highly and assured that Astana will buy more vehicles of this type. Besides, the Kazakh army is interested in upgrading of its tank fleet, which is represented by T-72 tanks. Therefore, the republic is conducting negotiations with Uralvagonzavod regarding purchasing of T-90 tanks.

Peaceful track of the defense holding company

The 75th anniversary of Uralvagonzavod was commemorated not only by the new tank. The main civil products manufactured by the corporation are freight gondola cars. The recent product is the 12-196-01 model on the 18-194-1 truck. Having the axle load equal to 25 ton-force, the gondola car features the overhaul life increased to 500 thousand kilometers.

After the global financial crisis of 2008, the demand for railway products has increased several times. Based on the performance during the first half of 2011, the corporation's revenue from sales of rolling stock and components amounted to 3,665 billion rubles, exceeding the revenue received from January to June last year by 225.43%.

By the way, in this production segment Uralvagonzavod also places its priority on exports, to Iran and Canada, in particular. For this purpose, the corporation renovated its production facility for wheels sets and installed an advanced process line for car axles and modular unit for press-forming of car wheel sets. The amount of investment totaled 130 million rubles. Due to the new equipment, the corporation will be able to increase its output to 135 thousand wheel sets a year.

Modernization is the backbone for development of the corporation's civil product sector. The upgrading of manufacturing processes takes place at another two enterprises - CHTZ-Uraltrac (Chelyabinsk) and the Design Bureau for Transport Machine-Building (Omsk). For example, the investment in the Chelyabinsk factory specializing in road-building machinery will amount to 15 billion rubles. The corporation's management expects that the construction and road-building machinery division will be expanded within the facilities of CHTZ-Uraltrac. The Chelyabinsk factory manufactures vehicles that are in demand both on the Russian and CIS markets. In 2011, several B-10M bulldozers and TR-12 track-mounted pipe layers were supplied to the Ministry of Water Management of Turkmenistan and the Turkmenneft state concern.

The long-term plans of CHTZ-Uraltrac include cooperation with Caterpillar, an American company, to extend the model range and the output of tractors. Foreign partners will help the company to introduce new technologies and upgrade the production.

Government armor

Generally speaking, the Russian Expo Arms - 2011 show did not bring any milestone agreements to the Uralvagonzavod Research and Production Corporation. Oleg Sienko explained to the RusBusinessNews reporter that the corporation did not seek new contracts. "All our agreements with partners have been signed; all the negotiations take place according to the schedule. The corporation has a lot of orders; we go on working and growing", he noted.

The Russian government authorities demonstrate their interest in Uralvagonzavod's growth. In fact, the establishment of the corporation in 2007 can be deemed as the government's most successful attempt aimed to help more than 20 defense enterprises to recover after the crisis. In the next few years, the government intends to invest more than 64 billion rubles in the corporation. Uralvagonzavod remains one of the most important components of the industry, while the Urals is the armory and industrial center of Russia", stated Vladimir Putin.

Dmitry Vasiliev