State-owned technology conglomerate Rostekh reports that the Russian government purchases imported electronics four and a half times more often than comparable domestic products.
The complaint came from Sergey Sakhnenko — industrial director of Rostekh’s radioelectronics cluster (REK) — at a joint meeting of the Bureau of the Union of Machinebuilders of Russia and the Bureau of the Association “League for Assistance to Defense Industries” on May 31.
“The volume of sales of products from REK enterprises to federal government executive organs in the medical equipment, computing technology, telecommunications equipment segments and other electronics in 2018 amounted to 18 billion rubles [$275 million]. Meanwhile, the volume of state purchases just in the sphere of IT and telecommunications came to not less than 100 billion rubles [$1.5 billion] for the year.
In Sakhnenko’s words, foreign products dominate Russian government purchasing despite the existence of Russian-made analogues comparable in quality and characteristics to imported equipment.
Replying for the government, Deputy PM and arms tsar Yuriy Borisov could only state the obvious. The Russian radioelectronics industry faces the task of dominating its internal market. Domestic technology should be introduced dynamically and commercialized. Besides dominating its home market, Russian technology has to be better positioned in foreign markets. “Only under such a state policy can we raise this sector,” he said.
Pretty thin stuff for Russian electronics manufacturers.
Suffice it to say, Russia’s import substitution policies since 2014 haven’t dented Moscow’s dependence on foreign high technology products. It’s a lingering pressure point the U.S. and NATO could exploit but for the greed of their politicians and companies still more than willing to do business with Russia.
Is the Russian MOD’s procurement declining? It’s difficult to say, but a quick survey seems to show it hasn’t, at least not yet or by much.
Although Russian procurement data is far from independent and probably far from complete, what Moscow claims was procured for the military is still useful. Below find a side-by-side comparison of what the MOD says it bought in the third quarter of 2015 and in the third quarter of this year.
The reporting comes from Krasnaya zvezda for 2015 and 2016, and from TASS and Bmpd.
Year-on-year in the third quarter, procurement of aircraft and helicopters appeared down. Purchases of air-delivered ordnance were higher in 2015 because the MOD needed to replenish stocks of missiles, rockets, and bombs expended in Syria. Deliveries of ICBMs and ships were lower in the quarter just completed. But the navy received substantial numbers of new cruise missile systems.
The MOD reported that 62 percent of the state defense order (GOZ) was complete in the third quarter. It also said the armed forces’ inventory of weapons and equipment is now 48 percent modern.
This week Sergey Chemezov, head of government-owned defense industrial conglomerate Rostekh and friend of Putin, echoed the president’s recent warning to firms to plan for a time without large military orders. Chemezov said Rostekh believes GOZ procurement will peak in two years and be no more than 50 percent of its total output by 2025.
Some Russian defense news for April 19-20, 2012 . . .
Krasnaya zvezda covered First Deputy Defense Minister Aleksandr Sukhorukov’s briefing on the progress of GOZ-2012. He said contracting is at 77 percent, ahead of the last two years (50 and 47 percent). The Defense Ministry’s GOZ funding was trimmed by 25 billion rubles, from a planned 704 to 677 billion (isn’t that 27 billion?). GOZ money will be advanced in full, and 53 percent of contracts will be “long term,” according to Sukhorukov.
Sukhorukov's Press Conference
Sukhorukov told the media this year the Armed Forces will receive 28 Pantsir-S1, 58 aircraft, and 124 helicopters. He discussed supplemental contracts for Mi-35, Mi-28N, and Mi-8MTSh helicopters. The total GPV purchase of helicopters will apparently be 1,124.
ITAR-TASS reported Borey-class SSBN Yuriy Dolgorukiy will be accepted not later than mid-June. Unit 2 Aleksandr Nevskiy will be accepted in August according to Sukhorukov.
This item also indicated Borey contracting for this year was almost done, and that units 4-8 will have 20 launch tubes.
Sukhorukov had no other specifics on defense procurement this year.
In its coverage of the press-conference, Arms-Expo.ru asked if GOZ-2012 isn’t broken already, at least in the munitions sector.
Meanwhile, in other OPK-related news . . .
Topwar.ru writes that small arms maker Izhmash’s bankruptcy is “going according to plan.” Rostekhnologii’s plan, that is.
VPK.name reported the chairman of Ukrainian engine manufacturer Motor Sich’s board claims Russia will sign a contract for its first An-70 transport this year. The GPV may include up to 60 of these aircraft.