Russian defence industry retools to survive sanctions

The days are long gone of Russia selling more than $15 billion worth of arms, as they did in 2014. The country’s share of global arms exports decreased 22 per cent in the 2013–17 period and plummeted to 16 per cent in 2018–22, according to data published by the Stockholm International Peace Research Institute earlier this year on 13 March.

Russia has been under extensive export and import restrictions imposed in 2014 and extended in 2015 and 2022.

Those sanctions include comprehensive bans on export of dual-use goods with a civilian and military purpose, flights, luxury goods, arms or relative material, metal ores, weapons, ammunition, military vehicles and equipment, and spare parts and accessories for any of those things, and actions against the assets of sanctioned persons and entities, the Russian banking system, and blocking of Russian Central Bank reserves.

The sanctions are intended to weaken Russia’s ability to finance the conflict, but not target Russian society on food, agriculture, health and pharmaceuticals.

Rostec (Russian state-owned defence conglomerate) first deputy general director Vladimir Artyakov said subsequent sanctions have provided challenges for the defence industry, in particular aircraft manufacturing.

“It’s a challenge. We accept this challenge and believe that we are working effectively,” Artyakov said during a press conference with state media and translated by Defence Connect.

“Technology does not stand still. We don’t just have to repeat something, we have to do it better and more powerfully than before.

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“The Sukhoi Superjet (airliner) was previously operated with engines jointly produced by Russia and France; this is SaM146 (turbofan engine). Now we are creating our own engine, PD-8. It is passing all the tests, and next year we will put it in series on the Sukhoi Superjet. We will produce a series of aircraft with fully imported components, with our engine.

“Initially, the Sukhoi Superjet used a large number of foreign components. A serious import substitution program has been developed with the support of the Ministry of Industry and Trade. It is effective and we are reaching very serious indicators.”

The company has also been required to develop its own VK-650V engines for transport and ambulance helicopters and direct the new PD-8 gas-generating systems for the country’s Mi-26 transport helicopters.

“(It’s) a lot of work. We are building a completely new production, using new technologies and preparing people, first of all. That is, those people who will assemble these machines,” Artyakov said.

“According to the results of the year 2022, the revenue of Rostec companies is more than 2 trillion, 44.5 per cent is civilian products, despite the growth of state defence orders.

“Our financial indicators are growing, and at the same time, expenses are also growing; to attract new highly qualified specialists, to re-equip old production facilities.

“Today, many enterprises that work for the state defence order have been re-equipped to a large extent in a very short time. Now these are modern productions.

“Large groundwork has been made for a serious volume through the Ministry of Defense. If it is necessary to increase the capacities and volumes ordered by the Ministry of Defense, we are ready for this.”

Russia’s gross domestic product is estimated to have dropped by 2.1 per cent in 2022, according to the World Bank, International Monetary Fund and the Organisation for Economic Cooperation and Development.

It’s also predicted to shrink further this year following further decline in Russia’s trade in goods and services exports.

Despite the decline, Rostec’s defence equipment is being used extensively in the Ukraine War, following multiple state defence orders from Moscow.

Earlier this month, the Irkutsk Aviation Plant of the United Aircraft Corporation, part of Rostec, manufactured and handed over a batch of Su-30SM2 multifunctional fighters and Yak-130 combat training aircraft to the Russian Ministry of Defense.

Rostec companies have also recently delivered modernised 120mm 2S12A “Sani” mortar systems, 2S19M1 Msta-S self-propelled artillery systems, and body armour to the Russian Ministry of Defense.

“We are fulfilling the state defence order to our main customer, the Ministry of Defense, in full, even for some positions ahead of schedule, not only in terms of quantity,” Artyakov said.

“I must say about the armoured vehicles that are used today there on the line of contact, artillery systems. These are multiple launch rocket system, howitzer guns.

“For some positions, we have doubled the number of combat aircraft that we produce. These are aircraft such as Su-30, Su-34, Su-35 (fighter jets). They are very effective on the line of contact and greatly help the execution of a special military operation.

“It should be noted that 80 per cent of the equipment that today participates in the SVO is Rostec products. We are ready, ready to further increase volumes. Everything will depend on what the Ministry of Defense will order us.

“To a large extent, we have carried out a serious modernisation of our production facilities and trained specialists. People work selflessly in three shifts, managers are always at their jobs. Our main task is precisely the mobilisation of labour collectives.

“For every action of the enemy, we prepare our own counteraction. In close cooperation with the Ministry of Defense, with those specialists who use these systems, we are improving our interaction mechanisms and our equipment.”