Group 1: military, space, nuclear power

Introduction

Russia inherited a well-developed machine-building sector from the Soviet Union in 1991. Machine building is one of the leading industries in the country, which is concentrated mostly in Moscow, St. Petersburg, the Urals, Volga region, and Westerns Siberia. It provides all other industries with equipment and machinery. The share of machine building in Russian economy reaches almost 30%. Machine building industry is characterized with a dynamic and complex structure which includes over 70 branches and with a deep specialization together with a wide cooperation of production. The most strategically important branches in the machinery industry are electronics, computers, robotics, instrument building, agricultural and transport machine building, railway cars manufacture, aircraft building, ship building etc.

The paper analyzes about 40 multinational companies operating in the machinery industry in Russia in order to examine their activities in the sector, to analyze relationship between these companies and the Russian government and to conclude about the influence of the political issues on the international activity and international expansion of the companies.

The multinationals which are selected for the further analysis can be divided into three big groups: Russian military construction, space and nuclear power firms, foreign automotive firms which have production facilities in Russia together with local cars producers and heavy-machinery construction firms which were established in the USSR period and were integrated into holdings in the beginning of 2000s. Each group is analyzed separately.

Group 1: military, space, nuclear power

The first group represents the companies which are related to the military, space and nuclear power construction, or, in other words, those which operate in the strategically important field in the global aspect. Until recently, the activities and operations of these enterprises as well as the location of their facilities was a state secret, but nowadays the military-industrial complex is being under a serious reconstruction due to the conversion which has opened great opportunities of usage of the scientific and technological potential for the economics needs of the Russian Federation.

The multinationals from this group are listed below.

Academician M.F. Reshetnev Information Satellite Systems

The JSC “Academician M.F. Reshetnev “Information Satellite Systems“ is Russia’s leading space enterprise specializing in the design, development and manufacture of high performance spacecraft and satellite systems. Information Satellite Systems has participated in more than 30 government and commercial space programs and manufactured over 50 different types of highly reliable LEO, MEO, HEO and GSO spacecraft. All the facilities with 8200 employees are situated in Russia. The sales in 2011 – 585,5 mUSD.

State influence: Reshetnev Company is the joint stock company, 100% state ownership. All the members of the board are representatives of government or federal agencies. It is the key executor of the Federal target programs in space industry. In 2009 the company was included in the state list of strategic enterprises. Participate in Federal target programs: State arms procurement program, the Federal Target program "Global Navigation System", Russian Federal Space Program and others.[2]

Almaz Antey

Almaz-Antey is one of Russia’s major defense companies. It was set up in 2002 through a merger of two historically rival missile houses - NPO Almaz (used to cater to the Air Defense Troops, was most known for its S-300P SAM system) and Antey Concern (specialized in air defense systems for the Ground Troops, including the S-300V). Almaz-Antey is the designated integrator of all air defence missile manufacturers in Russia, for the exception of MANPADS and some short-range specimens.

State influence: Almaz Antey is the joint stock company, 100% state ownership. Some of the members of the board are representatives of government or federal agencies. It is the key executor of the Federal target programs in space industry. The company is included in the list of state strategic enterprises. Participate in Federal target programs: State arms procurement program, the Federal Target program "The development of electronic components and radio electronics ", “The development of the military-industrial complex of the Russian Federation” and others.[5]

AtomEnergoMash

Atomenergomash Group of Companies was established in 2006 as a subsidiary of Federal Agency for Nuclear Power. Holding company combined several manufacturers of nuclear power plants' components. Today, it is one of the leading power machine building holdings in the Russian Federation. It provides efficient technological solutions for the nuclear and thermal power sectors and for the oil and gas industry. The company includes more than 14 500 employees.

State influence: Atomenergomash is the joint stock company, 85,7% state ownership (70,5%- Atomenergoprom, 9,7% - TVEL, 5,5% - Tekhsnabexport). The mission of the company reflects three strategic initiatives of state corporation "Rosatom", including an independent strategic initiative HEA “The creation of a stable EMC of a sufficient scale” and the two cross-divisional strategic initiatives “Global expansion of VVER technology platform” and “The share of nuclear power generation in Russia increasing”.[8]

Center for ground-based space infrastructure facilities operation

Center for ground-based space infrastructure facilities operation was established with the Russian Space Agency in 1994. The profit of the company in 2011 was 639 mUSD. The main functions of the company are the following: operation of Baikonur Cosmodrome, R&D projects for the improvement of the ground-based space infrastructure, racket fuel provision, space planning etc.

State influence: The Center is the subdivision of Federal Space agency. The main partners and contractors are the state agencies (Ministry of Information Technology and Communications, Russian Space Forces, Federal Space Agency), state enterprises and academic institutions (Khrunichev State Research And Production Space Center, Space Research Institute, etc.). It provides services for launching space vehicles under the Federal Space Program, the federal target program "Global Navigation System" in the interests of national defense and security of the country, international cooperation programs on commercial projects.

Khrunichev State Research And Production Space Center

The Khrunichev State Research and Production Space Center was founded on the basis of the Khrunichev Machine Building Plant and the Salyut Design Bureau by Presidential Decree in 1993. The goal was to make the production business and foreign economic relations of major space industry companies more efficient and to more actively promote Russian technologies in the international market. Khrunichev is the major Russian producer of spacecraft and space-launch systems, including the Proton and Rokot rockets. There are 43 000 in Russian and Kazakhstan (Baykonur).

State influence: Khrunichev is the Federal State Unitary Enterprise, thus is completely owned and governed by the State.

MIC NPO Mashinostroyeniya

MIC NPO Mashinostroyeniya is one of the leading space and rocketry companies of Russia. JSC MIC Mashinostroyenia, as a prime contractor in the multi-discipline cooperation, provides the National Armed Forces with advanced military equipment and collaborates with foreign partners in the military and technical fields. The firm’s revenue 464.3 mUSD in 2011.

State influence: MIC NPO Mashinostroyeniya is the state-owned corporation. It provides Russian Armed Forces with the latest types of military equipment, carries out military-technical cooperation with foreign partners and is strategically important for Russian Federation.[10]

Oboronprom

Oboronprom is a Russian aerospace holding company. The company is involved in helicopter production, engine production, air-defenсe systems, complex radio-electronic systems and leasing. It is part of the corporation "Russian Technologies” and the parent company of JSC Russian Helicopters, JSC United Engine Corporation, JSC Defence systems. The revenue of the company was 7704,8 mUSD in 2011.

State influence: JSC Oboronprom is the joint stock company, 100% state ownership (27,8%-RF, 58,3%-Russian Techologies, 13,9 - other state companies). Some of the members of the board are representatives of government or federal agencies. The company is provides the machinery for Russian Arms, has the strategic value and receives state investments (e.g. 68,7 mUSD in 2011). In 2006 the company was included in the state list of strategic enterprises.[12]

RSC Energia

JSC RSC Energia is active in the space industry since 1946. The company became the ancestor of almost all areas of the national rocket and space technology. Today "RSC" Energia " is a leading Russian rocket and space venture and works to create automatic space and missile systems (launch vehicles and inter-orbital transfer), high-tech systems for various applications for use in non-space sectors. The enterprise initiated practically all lines of activity related to national rocket and space technology. Its efforts are focused on building automatic space and rocket systems (launch vehicles and orbital transfer vehicles); high-tech, multi-use systems to be used in areas other than space. The revenue of the company was 641,8 in 2011.

State influence: RSC Energia is the joint stock company, 100% state ownership. Some of the members of the board are representatives of government or federal agencies. In 2004 the company was included in the state list of strategic enterprises.

Tactical Missiles Corporation JSC

Tactical Missiles Corporation is the major Russian weapon manufacturer, founded on the basis of Zvezda-Strela in 2002. Strategic targets which lead to the Corporation establishment consisted in keeping and developing of missilery’s research and production capacity, supplying national defense capability, resource mobilization needed for highly effective guided missiles and air-based, ground-based, sea-based weapon systems production, also in strengthening military positions of Russia in world armament market. 22 000 employees work on the enterprises of the JSC.

State influence: Tactical Missiles Corporation is the joint stock company, 100% state ownership (Federal Agency for State Property Management (Rosimushchestvo)). Most of the members of the board are representatives of government or federal agencies. The company was included in the state list of strategic enterprises.[15]

TsSKB-Progress

TsSKB-Progress is a Russian "Federal State Unitary Enterprise" under the jurisdiction of Roscosmos, the Russian Federal Space Agency responsible for space science and aerospace research. It is the developer of the famous Soyuz-FG rocket used for manned space flight, as well as Soyuz-U used for launching unmanned probes.is one of the leaders of space industry in development, manufacturing and operation of the middle-class launch vehicles. The LV built by the enterprise are used for manned and cargo launches to ISS, as well as for launches of foreign payloads.

State influence: TsSKB-Progress is the Federal State Unitary Enterprise, which means 100% state ownership. Some of the members of the board are representatives of government or federal agencies. The company was included in the state list of strategic enterprises.[17]

Summary

This group of the companies obviously gets the strongest and the most intensive governmental support. They are all owned by the government; many of them have politicians and members of the Russian government in the board of directors. Some of the companies from this field have production facilities not only in Russia but also abroad; they collaborate with foreign partners in the developed (the USA, France, the United Kingdom, Germany etc.) as well as in the developing countries (China, Algeria, Latin America, ex-members of the Soviet bloc etc.) and participate in many joint multinational projects (for example, International Launch Services of the Proton rocket in the USA or the participation in the International Space Station project etc.). More than a half of the production of these companies is exported to the countries with developing economies such as India, China, Vietnam, Venezuela, Algeria and others. This is often explained by the political connections and relationships being established long ago in the USSR period. All in all, the international scope of the activities of these companies is huge and this policy is strongly supported by the Russian State legislation. The main directions here are the following:

· Human resources support (federal educational and retraining programs, social perks and benefits for the workers of the military-construction and high technologies complex);

· Providing the companies of the sector with all the necessary infrastructure and giving them a status of scientific centers;

· Informational support (providing with the access to the Russian and international scientific funds and systems, organization of exhibitions of their production samples etc.);

· Financial support of the R&D projects, reconstruction projects; governmental loans and bonds issuing;

· Attraction of foreign investments and advanced technologies into the sector;

· Technical collaboration with foreign partners and investors.

To sum up, it can be concluded that the companies which operate in strategically important fields such as military complex, space industry and nuclear power are:

· All owned by the Russian government;

· Mostly were established in the Soviet times and reconstructed in the 90s, being converted into JSCs but with governmental representatives in the boards of directors;

· Export their production abroad and participate in many joint projects with the foreign colleagues;

· Interested in foreign investments and this interest is highly supported by the Russian government;

· Their international activities and expansion are also supported by the Russian government.

Date: 2015-12-24; view: 1479