Rostec, formally trading as State Corporation "Rostec", fully the State Corporation for the Promotion of the Development, Manufacture, and Export of High Tech Products "Rostec" and formerly Rostekhnologii, is a Russian state-owned defense conglomerate headquartered in Moscow.
Established in 2007, the organization comprises about 800 enterprises, which together form 15 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.
The organization is headed by Sergey Chemezov, appointed to the position by Russian president Vladimir Putin. The 2014 EU sanctions listing for Chemezov describes how Rostec subsidiaries supported Russia's annexation of Crimea.
Contents
History
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.
On 10 July 2008, newly elected Russian president Dmitry Medvedev signed a decree that transferred 443 struggling enterprises to ownership by Rostekhnologii. Of these enterprises, 30% were in pre-crisis and crisis condition, 28 were in bankruptcy proceedings, 17 had no business operations, and 27 had lost part of their assets or faced a material risk of such loss, and in total they faced a debt of RUB630 billion. In addition, these enterprises had worn out fixed assets, dilapidated production chains, and poor management.
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 AvtoVAZ, KamAZ, the titanium monopoly VSMPO-AVISMA, and helicopter manufacturers Mil and Kamov. This in turn brought executives of some companies into conflict with each other, such as the case with Mil and Kamov, in which they refused to communicate with each other. As a result, Rostekhnologii had to work with the two companies so they can cooperate with each other.
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. The corporation spent $1.5 million for rebranding. 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.
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, then CEO of Rostec, was one of the individuals targeted by the United States (US) and the European Union (EU), Chemezov's visa was banned and assets frozen by the EU. Rostec's access to US debt markets was also limited. Rostec was forced to rethink its strategy for its holding companies.
Corporate governance
The supervisory board, the management board, and the general director are all appointed by the president of Russia.
Supervisory board
Sergey Chemezov – General director (CEO) of Rostec
Sergey Ivanov – Special Representative of the president of the Russian Federation on the Issues of Environmental Activities, Environment and Transport
Denis Manturov – Russian minister of industry and trade
Yury Borisov – Deputy Prime Minister of Russia for Defence and Space Industry, Russian deputy minister of defence
Larisa Brychyova – Aide to the President of Russia and head of the Presidential State-Legal Directorate
Igor Levitin – Aide to the President of Russia
Anton Siluanov – Russian minister of finance
Vladimir Ostrovenko – Deputy chief of the presidential administration
Dmitry Shugaev – Director of the Federal Service for Military-Technical Cooperation
Management board
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 Council
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
Givi Dzhandzhgava – Deputy general director of JSC KRET for on-board equipment R&D, General Designer, Doctor of Technical Sciences (until 2021)
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
Social policy
The Rostec companies employed about 450,000 people as of 2016. A special focus of the corporation's responsibility on labor involves 21 dominant employers that are part of Rostec. As an example of corporate activity aimed at stabilization of social environment in single-company towns, mass media covered Rostec's labor policy in relation to AvtoVAZ, a dominant employer in Togliatti during the 2008-2009 economic crisis. Despite large-scale layoffs, public unrest was prevented by a special employment program for dismissed workers. The unemployment rate in the company town of Verkhnyaya Salda, Sverdlovsk Oblast, which is owned by VSMPO-AVISMA, was less than 1% in 2013.
In order to implement its Health National Program, the corporation has set up nine centers for high medical technologies. Five centers for cardiovascular surgery (Khabarovsk, Krasnoyarsk, Chelyabinsk, Perm and Kaliningrad), two centers for neurosurgery (Tyumen and Novosibirsk) and two centers for traumatic surgery, orthopedics and endoprosthesis replacement (Smolensk and Barnaul).
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.
As of March 2017, Rostec had built and equipped perinatal centers in 15 federal subjects of Russia:
6 republics: Bashkortostan, Buryatia, Dagestan, Ingushetia, Karelia and Sakha (Yakutia);
9 oblasts: Archangelsk, Bryansk, Leningrad, Orenburg, Penza, Pskov, Smolensk, Tambov and Ulyanovsk.
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. In 2015, Rostec started 165 projects in collaboration with these institutions at a cost amounted to 2.8 billion rubles.
Sponsorship
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. In 2010 and 2011, Rostec sponsored Vitaly Petrov, Formula One racing driver. In 2012, Russian Helicopters partnered with Caterham F1Team for which Petrov drives. Improving professional training of the employees, Rostec cooperates with the WorldSkills movement. 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.
Organization
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.
Aerospace
Russian Helicopters: unites all the military and civil helicopter designers and manufacturers of Russia
Technodinamika: developer and manufacturer of aircraft equipment, including chassis, fuel systems, flight control systems and auxiliary power units
United Aircraft Corporation: unites all the military and civil aviation designers and manufacturers of Russia
United Engine Corporation: engines for military and civil aviation and space exploration programs
Armaments
High Precision Systems: weapons for the combat tactical zone
Kalashnikov Concern: Russia's largest manufacturer of combat weapons
RT-Stankoprom: machine tool industry
STAN: machine tool industry
Security Technologies
Techmash: ammunition supplies for the Armed Forces
Automotive
RT-Auto: owns stakes in AvtoVAZ, Kamaz and Uralvagonzavod
Electronics
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
Concern Radio-Electronic Technologies (KRET): military spec radio-electronic, state identification, aviation and radio-electronic equipment
RosEl
Ruselectronics: electronic components, electronic devices and equipment, microwave equipment and semi-conductor devices
United Instrument Manufacturing Corporation: communications tools and systems, automated control systems, electronic security and robotic systems
Shvabe Holding: optical-electronic systems both for military and civil purposes
Materials
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
Medical
Nacimbio: pharmaceutical holding for research and development of immune biological remedies
Directly controlled companies
Rosoboronexport: (arms export)
AvtoVAZ: car manufacturer, (minority stake)
Kamaz: leading Russian manufacturer of trucks
Uralvagonzavod: Russian manufacturer of armored fighting vehicle
RT-Invest diversified, (minority stake)
RT-Business Development: charged with implementing the Rostec strategy aiming to increase capitalization of projects in the sectors of commercial advanced technologies, raw materials and associated infrastructure
Russia TEC: (exhibition complex)
National Ecological Operator: (waste management)
Financial performance
The preliminary financial performance for 2012 show that the overall revenue of Rostec exceeded RUR960 billion compared with RUR817 billion a year earlier. Revenues from export to 70 countries globally exceeded RUR240 billion.
Main financial indicators, 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, $1.81 bln
The company's revenue in 2021 amounted to 2.06 trillion rubles (US$ 28 billion).