Prime Minister Vladimir Putin on Tuesday promised an additional 10 billion rubles ($330 million) of government support next year to indebted arms maker Uralvagonzavod in an attempt to stimulate the country’s flagging defense sector.
“Uralvagonzavod will receive a 10 billion ruble injection into its charter capital. This is direct state support for a financial recovery,” Putin said at a meeting on the development of Russia’s defense industry in Nizhny Tagil, Sverdlovsk region.
The sum comes on top of 4.4 billion rubles that the company has already received from the state to help restructure its debts, as well as 3.3 billion rubles of loan guarantees earlier in the year. The company’s debt currently stands at 61 billion rubles.
Uralvagonzavod, which is also the country’s biggest train wagon maker, did not come in for a scolding, however, as many companies that are about to received money from the government do. Instead, Putin praised the company’s anti-crisis efforts after its production volumes declined last year.
“Production volumes declined substantially at the end of 2008. … But during all these troubles, all of us — and the company’s new CEO — managed to exit from the crisis with minimal losses,” he said in comments posted on the government web site.
He said the company had received several new orders for 2010 to 2011, including from Transneft, which is seeking to build its oil transport capacity for its Eastern Siberia-Pacific Ocean project, Russian Railways and other export orders. “I hope that the new CEO and a new [Sverdlovsk region] governor will do their best to see that all these plans are fulfilled,” Putin said.
In April, Oleg Siyenko replaced Nikolai Malykh as the company’s CEO following a dust-up in March in which Uralvagonzavod threatened to halt production after Russian Railways said it would cut back its purchases. Russian Railways shot back, saying the company produced low-quality freight cars.
Uralvagonzavod is a state-owned company that produces dozens of different kinds of machinery, including tanks, road-building machinery and train locomotives and cars.
Putin also called for a new generation of armor and automotive equipment and ordered the industry to work with scientists to come up with plans to modernize its weaponry.
But if need be, Russia will import arms and technical equipment from abroad if the necessary materials are not being produced domestically. He added that the government would import the new equipment “only on condition of its deep modernization.”
Russia is considering whether to buy a Mistral-class warship from France in an effort to modernize outdated hardware.
Also on his trip, Putin observed construction of the T-90 tank, which is being built for export. The company has already made 850, including some destined for India. “By the way, the Indian prime minister said hello,” Putin told the tank’s designer.