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Putin warns Rostec against overexpansion

The share of nondefense products made by Russian state corporation Rostec will grow to 50% by 2025, according to Vladimir Putin

© Mikhail Metzel/TASS

NOVO-OGAREVO, December 7. /TASS/. Russian President Vladimir Putin cautions state-owned corporation Rostec against overexpansion in order to prevent efficiency impairment.

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"Another danger is present in this regard: one should not expand endlessly and without control. It should be clearly understood, what is the goal of corporation establishment, where it should progress to and within what parameters it should function, so that its operations are optimal, the most efficient and competitive," the head of state said.

The share of nondefense products made by Russian state corporation Rostec already achieved 25% and would grow to 50% by 2025, Putin said.

"Rostec is consistently developing the output of nondefense products. I know their share has already reached 25% of total production output and 50% are planned to be achieved by 2025," Putin said. "I want to say that this is a critical task and it should be implemented on a going basis," he added.

"I would like to reiterate that the increase in output of high-technology products of nondefense and dual use and production diversification is the task for the whole Russian defense industry segment," the president said.

Rostec is proactively working in the import substitution sphere and making a sound portfolio of orders from small and medium enterprises, Putin said.

The corporation is active in mechanical engineering, machine tool industry, aircraft systems and components, pharmaceuticals, electronics, medical equipment and development of digital and crosscutting technologies.

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"Huge and intensive work on development of new markets, expansion of the product range and improvement of its quality is ahead. Therefore, it is highly important to proceed with improvement of corporation’s efficiency," the Russian president said.

Chief Executive Officer of the company Sergei Chemezov said Rostec will made a proposal of selling shares in its subsidiary holdings in 2018.

"I think we will make a proposal again to sell a portion of shares in certain our holding companies in 2018," the top manager said.

Rostec’s assets value is 3 trillion rubles ($50.6 bln) and tripled in recent years, Chemezov said. This attracts foreign and domestic investors, he added.

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