Rostec Сorporation

Created to further the development, manufacturing and export of high-tech industrial products

 

ROSTEC is a Russian industrial company consisting of 700 organizations, which also includes 22 direct management companies and 14 holding companies, five of which specialise in the manufacture of civilian products, and nine, in the manufacture of products for the military and industrial sectors. Rostec organizations are located in 60 regions of the Russian Federation. Company products are delivered to markets in more than 70 countries.

LINES OF BUSINESS

Having brought together and developed  many unique production operations and technologies within its structure, along with a significant share of the nation’s research potential, Rostec has become a reliable government partner for innovative industrial development. The corporation operates in the following areas:

•    automotive manufacturing;
•    aircraft manufacturing;
•    engine manufacturing;
•    metallurgy;
•    construction;
•    optics;
•    composite and other modern structural materials;
•    medical equipment;
•    pharmaceuticals;
•    industrial biotechnologies;
•    radio electronics;
•    instrumentation technology;
•    information technologies, and telecommunications;
•    machine tool technology and the manufacture of equipment to revitalize industry;
•    manufacturing of arms and military equipment.

CORPORATION OBJECTIVES

• to further the development, manufacture, and export of high-tech industrial products;
• to support Russian developers and manufacturers of high-tech industrial products in both domestic and foreign markets;
• to retool production;
• to develop the country’s research and human resources potential;
• to develop relationships with large international and Russian industrial companies.

PRINCIPAL FUNCTIONS OF THE CORPORATION

•  To support Russian developers and manufacturers of high-tech industrial products in both domestic and foreign markets;
•  To participate in the implementation of state policy in the area of military and technical cooperation between the Russian Federation and foreign governments and the state arms programme.
•  To attract investment to create competitive examples of high-tech industrial products.
•  To engage in promotional exhibits and marketing activities and to participate in demonstrating examples of civilian, military, and dual-use products within and outside of Russia.
•  To promote applied research in promising areas of scientific and technical development.
•  To bring advanced technologies to fruition, so as to improve the level of home-grown technologies and to reduce the time and cost required to create products.
•  To facilitate foreign trade activity with respect to core strategic industries.

PROJECTS

•  In 2008, the Pirelli Group and Rostec signed a Memorandum of Understanding with regard to a joint venture to manufacture tyres for automotive passenger and cargo vehicles. Initially, the parties had planned to construct a specialised tyre production plant in Togliatti, but these plans were later changed. In 2011, the decision taken to setup tyre production at the Kirov and Voronezh tyre plant facilities, which were acquired from Sibur Holding CJSC at an overall cost of EUR 222 million. Currently, the parties are upgrading the manufacturing capacity, which will permit the volume of products manufactured at the Voronezh tyre plant to increase to 4 million tyres by 2014 from 2 million tyres in 2012 . The manufacturing volume at the Kirov tyre plant is around 6.5 million tyres annually. Thus, by 2014, 11 million tyres for passenger and cargo vehicles will be produced, resulting in sales revenue of more than EUR 500 million.

•  In February 2008, through the active participation of Rostec, AVTOVAZ (JSC) and the French automotive manufacturer Renault signed a strategic partnership agreement. The agreement initiated a full-scale restructuring of the domestic automotive manufacturing company: Renault representatives assumed positions in the AVTOVAZ management team, and company shares were divided between the consortium participants. In doing so, the French company acquired a blocking stake in AVTOVAZ, i.e., 25% plus one share. In 2009, Renault and AVTOVAZ signed a supplemental agreement, in accordance with which Renault made an asset contribution that included the transfer of technologies, manufacturing equipment, as well as expert knowledge and experience in an amount equivalent to EUR 240 million. These assets were used to upgrade the AVTOVAZ production line and prepare it for the manufacture of Renault and Nissan vehicles, as well as new models of the Lada, created with the aid of foreign innovations. This should enable AVTOVAZ to recover its profitability and maintain the leading position of the Lada, Renault, and Nissan brands in the Russian market. The Renault-Nissan Alliance has been negotiating with AVTOVAZ co-owners Rostec and Troika Dialog since 2011 to buy a majority stake in the Russian automotive manufacturing company. In May 2012, the parties reached preliminary agreements on the creation of a joint venture that will own 74.5% of AVTOVAZ, with the Renault-Nissan Alliance having a 67.13% stake in the venture. As expected, judicial approval of the agreement will occur in December 2012, and by 2014, the parties will have bought out the share belonging to Troika Dialog.

•  In 2006, VSMPO-AVISMA reached an agreement with the Boeing Company on the creation of a joint venture to perform primary machining of titanium forgings for the Boeing 787 Dreamliner and Russian airliners; a corresponding contract was signed in 2007. Plant construction, selection and training of employees, and installation of machine tools took only two years, and in 2009, Ural Boeing Manufacturing, one of the most modern plants in the world created in collaboration with Rostec, began operations.

•  In July 2008, Rostec signed an agreement with Metalloinvest that called for the creation, in the event a bid was won, of a joint venture to develop the Udokan copper field in Chita Oblast. The field reserves are estimated at 20 million metric tons of copper or 1.3 billion metric tons of ore, which comprises 30% of all explored reserves in Russia. In September of that year, the Mikhailovsk Mining and Ore-Processing Plant (part of Metalloinvest) was announced as the winner of the bid. As of mid-2012, preparatory activities are under way at Udokan to develop the field. Per the plan, ore production should commence no later than June 2014.

•  On November 11, 2008, Rostec acquired a 25.1% stake in WiMAX Holding Ltd, which was the principal shareholder in Skartel, the operator of the Yota WiMAX network.

•  In November 2009, Rostec and Thales signed a memorandum of partnership and cooperation in the area of electronic systems for the defence and aerospace industries. This document governed the relationship between the companies regarding the exchange and joint use of high-tech achievements in both civilian and military spheres. in 2010, the parties decided to expand the relationship and signed a supplemental cooperative agreement, in accordance with which they agreed to create a joint venture for collective development, manufacture, and after-sales service in the fields of air traffic management and integrated modular avionics for civilian aircraft. The joint venture was created on the basis of the Vologda Optical & Mechanical Plant and engages in the licensed manufacture of Catherine FC and Catherine XP thermal imaging cameras and the Sophie MF hand-held thermal imaging binoculars.

•  In 2010, Russian Helicopters, which is part of Rostec, signed a contract with AgustaWestland, which is part of Finmeccanica, to create the HeliVert JSC joint venture to assemble AW139 helicopters at a new plant in the village of Tomilino, in Moscow Oblast. In 2012, the parties decided to expand the scope of their cooperative efforts and signed a preliminary framework agreement regarding the joint development, manufacture, and sale of a state-of-the-art single-engine helicopter weighing 2.5 metric tons.

In addition, Rostec is actively developing a relationship with other foreign partners and the largest Russian transportation and power companies, industrial groups, government institutions, local and regional government authorities, and Russian Federation regions.