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Rostec (Russian: Ростех, tr. Rostekh), officially the State Corporation for Assistance to Development, Production and Export of Advanced Technology Industrial Product Rostec (Russian: Государственная корпорация по содействию разработке, производству и экспорту высокотехнологичной промышленной продукции «Ростех») and formerly Rostekhnologii (Russian: Ростехнологии, literally means Russian Technologies), is a Russian state-owned holding conglomerate headquartered in Moscow that specializes in consolidating in strategically important companies, mainly in the defense and high-tech industries, by assisting in the development, production and export with the ultimate goal of capitalizing them and bringing them to an initial public offering (IPO).[5]

State Corporation Rostec
Native name
Государственная корпорация «Ростех»
Gosudarstvennaya Korporatsiya "Rostekh"
Formerly
Rostekhnologii
State corporation
IndustryConglomerate (ISIC: 6420)
Founded23 November 2007; 11 years ago (2007-11-23)
FounderVladimir Putin by signed law[1]
Headquarters,
Area served
Worldwide
Key people
Denis Manturov (Chairman)
Sergey Chemezov (CEO)
RevenueIncrease$27.2 billion[2] (2017)
Increase$4 billion[3] (2016)
Increase$1.31 billion[3] (2016)
Ownerwholly owned by the Russian Federation as "State corporation"
Number of employees
453,000[4] (2016)
DivisionsAircraft, Electronics, Armament
Subsidiariessee below
Websiterostec.ru

Established in 2007, the organization comprises about 700 enterprises, which together form 14 holding companies: eleven in the defense-industry complex and three in civil sectors. Rostec's organizations are located in 60 constituents of the Russian Federation and supply goods to over 70 countries worldwide.[6][7] The organization is headed by Sergey Chemezov.[8]

Contents

HistoryEdit

 
Logo of Rostekhnologii

OriginsEdit

On 23 November 2007, Russian President Vladimir Putin signed federal law No. 270 to establish a state corporation named Rostekhnologii, which was previously passed by the State Duma on 9 November and passed by the Federation Council on 16 November.[9][10][11][12][13]

Later in 10 July 2008, newly-elected Russian President Dmitry Medvedev signed a decree that transfers 443 struggling enterprises to the ownership under Rostekhnologii. Out of these acquired assets, 30% of such enterprises were in pre-crisis and crisis condition, 28 entities in bankruptcy proceedings, 17 had no business operations, and 27 had lost part of their assets or faced a material risk of such loss, with all facing a total debt of RUB630 billion. In addition, these enterprises had worn out fixed assets, dilapidated production chains, and poor management.[11][14][15]

After the acquisition, structural reforms were made, helping the enterprises emerge from their financial struggles with a 20%–30% increase in production growth, five times the national average. Most of the profits were acquired by Rostekhnologii, which 80% of it was from 20% of Rostekhnologii's assets. The 20% included the titanium monopoly VSMPO-AVISMA, helicopter manufacturers Mil and Kamov, AvtoVAZ, and KamAZ. This in turn brought executives of some companies in conflict with each other, such as the case with Mil and Kamov in which they refuse to communicate with each other. As a result, Rostekhnologii had to work with the two companies so they can cooperate with each other.[15]

Rebranding and beyondEdit

On 21 December 2012, Rostekhnologii rebranded itself as Rostec to make the corporation more open to the world. Rostec also featured a new logo, an open square symbolizing a window to the world and a focus frame, as well a new slogan "Partner in development" and implemented changes in its corporate governance structure.[11][16][17][18] The corporation spent $1.5 million for rebranding.[17] The corporate brand, which was launched in late 2012, is currently one of Russia's 15 most valuable brands and has a value similar to that of major companies such as Rosneft and Rostelecom.[19]

On 16 July 2014, as a result of Russian intervention in Ukraine and Russian annexation of Crimea, Rostec was one of the companies that was sanctioned by the Obama administration. Sergey Chemezov, current CEO of Rostec, was one of the individuals targeted by the United States (U.S.) and the European Union (E.U.), whose visa was banned and assets froze by the E.U.. Rostec's access to U.S. debt markets was also limited. Rostec was forced to rethink its strategy for its holding companies.[20][21][22][23]

In December 2015, Rostec's supervisory board approved its development strategy through 2025. According to the strategy, Rostec intends to change the Russian economic model by putting less emphasis on weaponry, aviation components, and software and more emphasis on electronics, telecommunications, robotics, and other high-tech industries. This in turn would diversify the Russian economy, increasing the share of high-tech civilian products and non-primary exports.[11][24][25]

Corporate governanceEdit

 
Sergey Chemezov, current General Director/CEO of Rostec since its founding

The Supervisory Board, the Management Board, and the General Director are all appointed by the President of Russia.[26]

Supervisory boardEdit

Management boardEdit

  • Sergey Chemezov – General Director (CEO)
  • Vladimir Artyakov – First Deputy General Director
  • Nikolay Volobuev – Deputy CEO
  • Igor Zavyalov – Deputy CEO of Finance
  • Aleksandr Nazarov – Deputy General Director
  • Dmitry Lelikov – Deputy General Director for Investment Activity
  • Oleg Yevtushenko – Executive Director
  • Sergey Kulikov – Industrial Director of Electronics
  • Anatoly Serdyukov – Industrial Director of Aviation
  • Sergey Abramov – Industrial Director of Conventional Armament, Ammunition and Special Chemistry
  • Viktor Kiryanov – Managing Director of Infrastructure Projects
  • Vladimir Litvin – Managing Director of Direct Administration
  • Maksim Vybornykh – State Secretary
  • Alla Laletina – Head of Legal Department
  • Yury Koptev – Chairman of the Scientific and Technical Council
  • Natalya Borisova – Head of Bookkeeping and Fiscal Accounting

Scientific and Technical CouncilEdit

  • Yury Koptev – Chairman of the Science and Engineering Board, Doctor of Technical Sciences
  • Vladimir Verba – General Director, General Director of JSC Concern Vega, Doctor of Technical Sciences
  • Valery Gheykin – Deputy General Director, General Director of JSC ODK, Doctor of Technical Sciences
  • Vladimir Gutenev – First Deputy Chairman of the Industry Committee of the State Duma, First Vice-President of the Union of Machine Builders of Russia. Doctor of Technical Sciences
  • Yury Demchenko – Chairman of the Science and Engineering Board, Chief Adviser of the General Director, Head of the Group of Advisers of Rosoboronexport
  • Ghivi Janjgava – Deputy General Director of JSC KRET for on-board equipment R&D, General Designer, Doctor of Technical Sciences
  • Nikolay Ivenev – Advisor to the General Director of JSC High-Precision Complexes on scientific and technical policy, Candidate of Technical Sciences
  • Valery Kashin – Deputy General Director of JSC High-Precision Complexes – General Designer of JSC NPK KBM, Doctor of Technical Sciences
  • Alexandr Komarov – Head of the Department of Coordination and R&D of JSC Russian Electronics, Candidate of Technical Sciences
  • Aleksandr Kuznetsov – Director of the direction of science, engineering and innovative development of JSC Stankoprom, Doctor of Technical Sciences
  • Alexandr Kulikov – Deputy General Director for Research of the Interdepartmental Center for Analytical Research in Chemistry, Physics and Biology under the Presidium RAS, Candidate of Technical Sciences
  • Valery Litvinov – Chairman of Science and Engineering Board, Adviser to the General Director of JSC RT-Khimkompozit, Doctor of Technical Sciences
  • Yury Majevsky – Deputy General Director of JSC KRET for radioelectronic combat equipment R&D, general designer of the radioelectronic combat system, Doctor of Technical Sciences
  • Vladimir Tikhonov – First Deputy General Director of Techmash, Candidate of Technical Sciences
  • Nikolay Turko – Senior Consultant of the General Director of Rostec, Doctor of Military Sciences
  • Andrey Shibitov – Deputy General Director for Production of Russian Helicopters
  • Anatoly Filachev – General Director of JSC Orion, Corresponding Member of RAS
  • Viktor Shchitov – First Deputy General Director – Chief Engineer of TsNIITochMash, Doctor of Technical Sciences
  • Grigory Elkin – First Deputy General Director of JSC OPK, General Designer of Automated Control and Communication Systems, Doctor of Economic Sciences

Social policyEdit

LaborEdit

The companies controlled by Rostec employ about 450,000 people.[27] A special focus of the corporation's responsibility on labor involves 21 dominant employers that are part of Rostec.[28] As an example of corporate activity aimed at stabilization of social environment in one-company towns, mass media covered Rostec's labor policy in relation to AvtoVAZ, a dominant employer it Togliatti during the 2008-2009 economic crisis. Despite large-scale layoffs, public unrest was prevented by a special employment program for dismissed workers.[29] The unemployment rate in the company town of Verkhnyaya Salda, Sverdlovsk Oblast, which is owned by VSMPO-AVISMA, is less than 1%.[30]

HealthEdit

In order to implement its Health National Program, the corporation has set up nine centers for high medical technologies.[31] Five centers for cardiovascular surgery (Khabarovsk, Krasnoyarsk, Chelyabinsk, Perm and Kaliningrad), two centers for neurosurgery (Tyumen and Novosibirsk) and to centers for traumatic surgery, orthopedics and endoprosthesis replacement (Smolensk and Barnaul).[32]

Rostec is a participant in the Perinatal center development program along with Russia's Ministry of Health, the Federal Compulsory Medical Insurance Fund and federal member state authorities.[33][34]

As of March 2017, Rostec had built and equipped perinatal centers in 15 federal subjects of Russia:

EducationEdit

Rostec cooperates with 312 leading higher educational institutions, including, among others, Bauman Moscow State Technical University, and the Plekhanov Russian University of Economics, through targeted training of specialists, development of cooperation in the framework of scientific and technological areas, joint research, design and technological work. There are 294 departments belonging to holding companies and enterprises under Rostec in these institutions.[36][37]

In 2015, Rostec started 165 projects in collaboration with these institutions at a cost amounted to 2.8 billion rubles.[38]

SponsorshipEdit

On November 27, 2007, Rostec became general sponsor of FC Krylia Sovetov Samara; however, in 2011 the corporation decided to suspend its support of the team.[39]

In 2010 and 2011, Rostec sponsored Vitaly Petrov, Formula One racing driver. In 2012, Russian Helicopters partnered with Caterham F1Team for which Petrov drives.[40]

Improving professional training of the employees, Rostec cooperates with the WorldSkills movement.[41] In 2015 the Corporation and WorldSkills Russia concluded a cooperation agreement which is aimed mainly at the joint work on training specialists for high-tech industries. State Corporation Rostec is a general partner of WorldSkills Russia in accordance with a three-year agreement.[42]

OrganizationEdit

As of late 2016, going by its development strategy, Rostec organizes its 700 enterprises into either directly controlled companies or clusters composed of holding companies.[43][44][45]

ClustersEdit

AviationEdit

RadioelectronicsEdit

  • Concern Avtomatika: the largest enterprise of the Russian Federation concerned with problems of information security, with development and production of secrecy communication equipment and systems, protected information and tele-communication systems and also special automated control systems.
  • RosEl
  • Shvabe Holding: optical-electronic systems both for military and civil purposes;

ArmamentsEdit

  • High Precision Systems (Vysokotochnye Kompleksy): weapons for the combat tactical zone;
  • Kalashnikov Concern: Russia's largest manufacturer of combat weapons.
  • Nacimbio: pharmaceutical holding for research and development of immune biological remedies.
  • RT-Auto: owns stakes in AvtoVAZ and Kamaz.
  • RT-Chemcomposite: specializes in innovative research and development in the field of polymer composite materials and integrated products for space exploration, aviation, arms and military equipment, ground and water transport, power utilities and other industries.
  • RT-Stankoprom: machine tool industry.
  • Security Technologies
  • Techmash: ammunition supplies for the Armed Forces.

Directly controlled companiesEdit

Financial performanceEdit

The preliminary financial performance for 2012 show that the overall revenue of Rostec exceeded RUR960 billion compared with RUR817 billion a year earlier.[46] Revenues from export to 70 countries globally exceeded RUR240 billion.[47] Rostec's net profit in 2012 was almost RUR40 billion. Corporation's companies paid over RUR120 billion in 2012 tax. Investments in modernization and production growth exceeded RUR112 billion. The average monthly payroll went up to RUR26,200 from RUR23,700 a year earlier.

Main financial indicators,[48] 2015 ($1 = 60,96 RUB):

  • Consolidated revenue, $18.7 bln
  • Consolidated net income, $1.62 bln
  • Export revenues, $5.0 bln
  • Total investments, $2.1 bln
  • Exports of innovative products, $1.81 bln

See alsoEdit

ReferencesEdit

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  32. ^ Надеемся, что очередей в высокотехнологичные медцентры не будет – зам. гендиректора «Ростехнологий» Николай ВОЛОБУЕВ
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  37. ^ Ростех потратил более миллиарда рублей на жилищную программу в 2015 году. Самые актуальные новости, последние новости России, мира и Украины на Profi-news.ru (in Russian). Retrieved 2018-07-24.
  38. ^ http://rostec.ru/content/files/documents/GODOVOY_OTCHET_2015.pdf
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External linksEdit