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Russian defense industry enterprises these days are doing their utmost to diversify business by mastering the production of new types of weapons and expanding the range of civilian products on offer. For instance, the concern Kalashnikov (an affiliate of Rostec and a small arms maker of world renown) is in the process of developing a 20-tonne reconnaissance and attack robot. Also, the company has plans for building drones and exporting gunboats.
Kalashnikov’s civil products division plans to participate in creating video games and protecting its copyrights in the related software projects, manufacturing strikeball weapons and providing its own sports rifle for biathletes. Kalashnikov’s CEO Aleksey Krivoruchko has shared these and many other plans and ideas in an interview granted to TASS.
- As follows from recent reports you are about to venture into the gaming industry market. What has Kalashnikov been doing to this end?
- As far as computer games are concerned, a partnership program is on today’s agenda. We are selecting partners to cooperate with. Protecting our copyrights in relation to our products used in different online games is another aspect of our activity. For instance, if in some games players can use the AK-12 assault rifle, we will seek a compromise with its developers regarding our copyrights.
- Will you begin to make strikeball weapons?
- This is a totally new business for us. As far as we understand, this segment will boom, so we will certainly make strikeball weapons. We have finalized the first samples already. Very soon we will present them to the federation of wargaming. We have plans for starting the production of strikeball weapons this year.
- Do you upgrade biathlon rifles?
- This segment is important for our concern. We’ve considerably amended the biathlon rifle we have. The Federation will have it in March, and I hope the athletes will like it. We are pretty certain this is a very decent product.
- What features of it have been improved?
- The accuracy, reliability, ergonomics and sight. Many nuances have to be borne in mind, because it is an Olympic sport and everything must be impeccable. Also, I would like to point out that creating a mobile service to repair and keep the biathlon rifles ready for use is an important component of our work. At a certain point German rifles began to be used on the massive scale, because Izhmash provided no services at all. We now have a mobile team that does repairs and maintenance on site.
- What progress has been achieved in creating a shooting club at the Patriot theme park?
- This work is at the final stage. The final touches will be put to it by the Rifle World Championship, scheduled to begin on May 30. We are the event’s general sponsors. It will be an up-to-date facility with many galleries, including those for shooting at a distance of 1,200 meters. We will try to make it suitable for night-time competitions, too. It will be Russia’s first-ever facility boasting such scale and functions.
- What prospects does the Lebedev pistol have? When will its testing be over?
- Testing is still in progress and we hope to be through with it this year. We believe it will be in great demand from the Defense Ministry and other law enforcement agencies. This pistol will have a practical shooting configuration, too.
- What’s the state of affairs in cooperation with US partners?
- For now we just meet at different events, but no commercial work is in progress, because they are faced with a ban. So are we. But they are looking forward to our return. I do hope that we will be able to get to the US market when the sanctions go. Many people there wish to have weapons made in Izhevsk.
- Have the sanctions affected the production or marketing of Kalashnikov weapons?
- Neither the sales nor the production have been harmed. We managed to identify new markets and create new products. True, the lack of access to the US market and problems with settlements are the worst effects of the sanctions. But our production facilities are now busy to capacity. Even if the United States lifts the sanctions right away and opens its market again, we will be unable to provide anything for another eighteen months, because we’ve found alternative markets and more lucrative prices elsewhere.
- Is there an agreement with partners in India over launching the production the AK-100 assault rifles?
- The way I see it, we have already identified a partner that looks interested and is capable of doing that. I hope that we will conclude a specific agreement this year and we will move on towards its practical implementation.
- Kalashnikov has had several trademarks registered in China. Are there any plans to do the same in other countries?
- Why, naturally. We have been taking measures to protect our brand and our trademarks in all markets, including China, Europe and the United States. The concern’s brand and trademarks must belong to us, and not some companies that have nothing to do with our products.
- When will the light machine-gun RPK-16 begin to be produced serially?
- This year we have already received a request from the Defense Ministry. In the near future a contract will be concluded, so we will be obliged to provide the first batch to the customer for testing. I believe that serial production will begin next year, when troops are through with testing it in the field.
- Are there any plans for making this machine-gun part of the personnel Ratnik combat system?
- We are not in the position to answer this question, but if the Defense Ministry makes such a decision, why not?
- When do you plan to start the government acceptance tests of the sniper rifles SVK and VSV-338?
- They will begin pretty soon, this year for sure. We are about to hand over the first products to the customer for initial tests. There is certain interest in these rifles. In fact we have already coordinated the requirements the rifles will be expected to match. I believe both will have a good future.
- And how the testing of the AK-12 been going on? When will it be over?
- We hope it will be completed in early summer. The last phase is to begin soon.
- A few words about the new products you have selected for the Army-2017 show.
- As I’ve already said, there’ll be new small arms, drones and a new boat. Apart from that we keep working on a number of projects I would prefer to keep quiet about for now.
- Are there any new types of small arms still in the design phase?
- A great variety of projects is underway. Several products will be on display at the Army-2017 show.
- Robots are one of you main lines of business. Are there any new projects in this respect?
- We are pushing ahead with this work and hope to show some of our achievements at the Army-2017. I’m talking not about one vehicle, but a whole family of reconnaissance and attack vehicles of different class that can operate as a team.
- Will the system of weapons installed on the Soratnik automated combat system undergo any change?
- It will depend on the customer. All of our robotized platforms are based on the modular principle. Weapons can be replaced promptly depending on the task.
- Any plans for making something bigger than the Soratnik?
- Yes, research and development is in progress. It will be a 20-tonne reconnaissance and attack system. It’s up and running.
- Are there any new plans for making drones? Any attack drone up your sleeve?
- Ideas are many, so are projects, but as far as attack weapons are concerned, this question should be put to the Defense Ministry, not us. We do have ideas. As for the new models, we offer new products all the time. Just recently we presented a drone boasting fundamentally new parameters. In 2016, sales by the ZALA company almost doubled. This year we prolonged some contracts and concluded others with partners in the oil and gas industry.
- Will there be more export contracts for the boats you make?
- We have been working with many partners in this field. For the time being, the greatest interest has been displayed by countries in the Middle East, but we maintain contact with other regions and expect that our efforts will be productive. At IDEX (the international weapons show in the United Arab Emirates - TASS) we held several meetings and we expect that some contracts will materialize later this year.
- Have you coped with the contract for providing guided missiles Vikhr-1 for the Russian Defense Ministry?
- We fulfilled one contract a long while ago. Now we’ve signed a second one. All works proceed on time. There have been no disruptions. This contract is extended over several years.
- Are you upgrading these missiles?
- That’s a question for the designer to answer. As for me, I can say yes, this work is underway and we participate in it.
- What are the financial achievements of 2016?
- If it’s 2016 gross revenues that you mean, it almost touched 35 billion rubles ($508 mln), and net profit, 4 billion rubles ($68 mln). In contrast to this, in 2015 we posted a net gain of 12 billion ($204 mln). The difference is obvious. First and foremost we owe this result to the emergence of new assets and to production growth shown by all of our operations. For instance, in Izhevsk production in fact doubled.
- Did you cope with the defense order?
- We executed all of our contracts last year, but there is one delay. For a variety of reasons we managed to start working on it as late as last autumn. We will be finished by the end of March. The Defense Ministry is well aware that coping with such a task as the upgrade of small arms within a ten-week deadline is impossible.
- Has the concern established contacts with new partners over the year under review?
- Yes, it has. The machine-building plant in Mytishchi and the ship-building company Vimpel are the largest.
- When do you hope to be through with the deal to purchase of a 30-percent stake in the Institute of Applied Physics in Novosibirsk?
- We will complete the transaction by the end of this year. A number of corporate and legal procedures have caused certain delays.
- Why did you conclude such a deal?
- Firstly, for the sake of expanding competences. It’s a major designer of missiles. We have plans for expanding this area of activity, for instance, certain components of the S-8 and S-13 missiles (unguided air-launched rockets – TASS) that the Novosibirsk institute develops are already batch-produced at the Izhevsk mechanical plant.
- What do your order books look like now?
- The contracts we’ll be working on in the near future are estimated at 300 million dollars. I’m referring to the already contracted amounts and the contracts to be finalized soon. No firm contracts exist on a number of other projects, but we hope that the agreements will be signed later this year.
- What are the clients the contracts will be signed with and what products will they acquire?
- We prefer not to mention specific countries, but I can say there are customers in the Middle East, Southeast Asia, Africa and Latin America. As for specific products, they range from small arms to ships. On the whole, under the contracts the concern will be working on this year 70% of products will be exported.