In an email interview with Defenseworld.net, Sergei Gromov, Director-General of Ukroboronprom talks about the Ukraine-based company's massive growth in the past year and how challenges that lie ahead.
DW : Your company has managed to gain a strong foothold in this year. The first half profits rose 520 percent compared with last year’s $12 million loss. How did the company overcome last year’s challenges?
Sergei Gromov: During 2011-2013, a series of administrative measures were taken to reduce operating costs, stabilize the solvency, financial recovery and storage technology and production process, settled the issue of debts, the purchase of a balanced policy to improve internal cooperation between enterprises of Concern, searching and conquer new markets. Concern activity aims to solve two priorities: implementation of defense order and international contracts in the military-technical cooperation. Financial and economic indicators confirm, that Concern's course is correct.
DW : Your position in Vietnam has fortified over the past year. Can you tell us about the contracts you’ve won and future programs you will pursue in the country?
Sergei Gromov: The major partners of Ukraine in the sphere of military- technical cooperation are India, Iraq, China, Kazakhstan, Thailand and Russia. Our lead partner is India. The volume of revenue from trade with your country for 2012 amounted to $119.3 million. The largest contract in the history of Ukrainian-Indian military-technical cooperation agreement is about $ 400 million to repair and upgrade 105 machines AN-32 of Indian Air Force. It was signed in July 2009 between the Indian Air Force, Ministry of Defence of India and the State Foreign Trade Enterprise SpetsTechnoExpor, which is part of SC Ukroboronprom. In 2012 and 2nd quarter of 2013 Ukraine not only maintained its position in our traditional regional markets , but also expanded the geography of the military- technical cooperation. Thus, during the period of military goods and services and special purpose delivered in 62 countries. The main consumers of Ukrainian defense products are Asia (45%), Africa (30%), Europe and the CIS countries. Production of military and dual-use Ukrainian production is in great demand in the global markets of arms and military equipment. First of all, it’s about aviation engineering, armored and armored vehicles, high-precision equipment damage and air defense weapons.
DW : Can you talk about countries that have expressed interest in Ukrainian weapons?
Sergei Gromov: Ukroboronprom generally cooperates with more than 70 countries worldwide. An important task of concern is developing new areas for production Ukrainian defense industry. In September, an Ukroboronprom delegation visited several countries in Latin America, particularly Uruguay and Paraguay. During the meetings with the heads of departments of Uruguay, an agreement was reached on the preparation and signing of the Memorandum of military- technical cooperation between Ukraine and Uruguay. This document is a first step to complete the signing of a bilateral agreement on military-technical cooperation. We agreed soon make proposals on the use of Ukrainian weapons and technology to increase combat effectiveness of Uruguay. The Minister of Defence of the Republic of Paraguay expressed readiness to sign an agreement on military-technical cooperation with Ukraine. During a series of meetings representatives of Ukroboronprom with the leadership of Paraguay, we talked about deliveries of various types of military equipment.
DW : You can tell us about the naval weapons system you manufacture?
Sergei Gromov: Our companies produce various classes of ships and destination deadweight up to 150-180 thousand tons. Industrial and technological opportunities allow Ukraine to modernize the army navy and other navies to the highest international standards. This is reflected, the implementation of the state program for the construction of Corvette. This class of vessel has considerable export potential and several countries in the Asia-Pacific, Middle East and South American regions are interested in it. In April, Ukroboronprom representatives passed foreign customer world's largest amphibious hovercraft "Project 958 ". The ship was built at Feodosia shipbuilding company "Sea", which is part of SC Ukroboronprom. Currently, the company continued the construction of the second ship. Company "Zorya"-"Mashproekt" is one of the world's leading gas turbine. We design and manufacture gas turbines for marine vessels and ships, for electricity and gas pipelines. This product comes to Russia, Belarus, India, China, Vietnam, Singapore, South Korea and others countries.
DW : Can you tell us about the company’s future plans and efforts?
Sergei Gromov: In 2013 we planned to increase the volume of manufactured products, primarily through the implementation of export contracts. Strategy Concern include increasing the volume of production, capital and other targets by twice before 2015. Concern introduced the concept of consolidation of management research and production enterprises of the defense industry for divisional basis. This mechanism recommended by leading management consulting company «McKinsey» and successfully implemented the most powerful business entities in Ukraine. The implementation of the said concept involves the creation of Concern vertically integrated specialized research and production association (divisions) in the following areas: aircraft building and repair, production of armored, automotive, engineering and special equipment, shipbuilding and marine engineering, precision weapons and ammunition, radar, radio and air defense systems.
DW : Can you give us an overview of your company and its subsidiaries?
Sergei Gromov: The main strategic objectives of Ukroboronprom are to improve the defense capabilities of the newest and upgraded models of military equipment and expand military-technical cooperation of Ukraine with foreign countries. Directly to the defense production in Ukraine attracted nearly 160 enterprises, 134 of which are managed by Concern, the rest - in the management of other government agencies and private companies. In the management of the company are aviation industry, shipbuilding and marine engineering, radar equipment, air defense, armored vehicles, missile and artillery weapons and ammunition. Integration of functions sale of military products and its production in a control structure provided Ukroboronprom the ability to solve strategic tasks in the sphere of military-technical cooperation , open for new partners in foreign markets, centralizing financial flows and use clear pattern of results obtained according to the participation of performers in this process.