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Many Ukrainian defense companies have financial problems - official

May 24, 2012, 3:21 UTC+3
Тhe official noted that Ukrobornprom continues actively military cooperation with other states
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KIEV, May 24 (Itar-Tass) — Deputy director general of the state-owned Ukroboronprom concern Vladimir Kuratchenko said many defense sector companies are in deep crisis which has "a systemic nature."

"At the stage of the establishment of the country's independence, Ukraine had a huge research and production potential in the defense sector, which brought together more than 700 companies and one million specialists," Kuratchenko said at a parliamentary hearing on Wednesday.

But ineffective defense conversion, a considerable decrease in defense orders, and state support "under the leftover principle," idled part of the companies, and some shut down for good.

"It should be stated that out of the 126 state-owned companies, a majority have an extremely difficult financial and economic situation. Just 10 percent of companies posted growth rates thanks to active exports of defense products. The debt of defense firms exceeds 2 billion hrivnas /250 million dollars/.

The state concern official stated that despite systemic problems, "there remain considerable internal reserves and research and production potential" that can and should be used for boosting the state's defense capability.

The official noted that Ukrobornprom continues actively military cooperation with other states. In 2011, the concern supplied one billion dollars of armaments to foreign markets. "The traditional markets" for Ukraine are Asian and African countries."



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