ROSTVERTOL GROWTH STRATEGY
Author: Boris Slyusar
A Military Parade interview with Rostvertol Director General Boris Slyusar timed to the beginning of the HELIRUSSIA 2011 International Exhibition
What are the goal of Oboronprom Corporation's acquisition of a controlling stake in JSC Rostvertol and the role of your company in the Russian Helicopters holding, which is a 100-percent subsidiary of the Corporation?
- In December 2010, in the final stage of setting up a holding JSC Russian Helicopters acquired 1,202,973,854 Rostvertol's registered ordinary shares, increasing its stake in the authorized capital of the company from 22.76 to 75.06%.
This event completed the consolidation of the Russian helicopter industry into the Russian Helicopters holding, because up to this time Rostvertol, along with other enterprises of the group, had pursued consistent production and marketing policies, while remaining formally independent of the holding. Today, when Rostvertol is controlled by Russian Helicopters, the enterprise retains its role as a major participant of the holding, actively cooperating with other companies within the common scientific and production policy aimed at modernizing and developing the existing model lineup.
- What helicopters are currently built by Rostvertol?
- In Russian Helicopters' broad diversified lineup, our products occupy the segment of attack and heavy-lift transport helicopters, designed to meet the needs of both the RF Ministry of Defence and foreign customers. They include the Mi-26T heavy transport helicopter and its upgraded version Mi-26T2, new generation Mi-28N Night Hunter attack helicopter, and Mi-35M attack helicopter.
The Mi-26T is the world's sole helicopter capable of carrying cargo weighing up to 20 tons inside the cabin or externally. This largely explains the fact that the Mi-26T has been in production for several years, but demand for it is growing. In addition, in terms of its fire extinguishing capabilities, our helicopter is today in great demand. Rostvertol has also upgraded it. The current version of the helicopter, the Mi-26T2, differs from the baseline model in fewer crew, new up-to-date avionics, and the opportunity to use night vision goggles.
Today we also continue to manufacture attack helicopters. The legendary Mi-24 has been superseded by a new generation attack machine, the Mi-28N Night Hunter. Launching it into production was preceded by a colossal amount of work, unique in its scope and the nature of tasks completed. By now, we have organized batch production of these air combat systems under a long-term contract with the Ministry of Defence.
The Mi-35M is available not only for export. We have recently received an order from the RF Ministry of Defence for these helicopters. During an in-depth upgrade of the Mi-35 we used technologies implemented in the new generation Mi-28N Night Hunter helicopter. An important advantage of this machine is its capability to carry eight troopers to an action zone.
- Which countries are operating the Mi-26T and why is this machine in demand abroad?
- The Mi-26T really enjoys steady demand in the global market. Currently, aside from Russia and CIS countries, the major operators of this helicopter are China, India, Venezuela, and Greece. The Mi-26T is also often leased by many European, Asian and African countries.
China is among many countries that highly appraised the unique capabilities of this helicopter and close cooperation with the country has been going on for more than five years. Three Mi-26TS helicopters (certified version of the Mi-26T) have been delivered over this period, with the final machine supplied to the buyer in October 2010. Since Chinese fire-fighters and rescuers desperately needed such equipment at that time, Rostvertol had built the helicopter three months ahead of schedule. Our Chinese partners were very grateful for that.
Work done by the helicopter in the summer of 2009 in Sichuan Province, where an iron ore mine, located at the altitude of 1,500 meters, was found under rubble as a result of an earthquake, is another example of the Mi-26TS' effectiveness. The crew had to work under challenging conditions. The mine was in a narrow gorge, a kind of a stone bag. The whole operation to deliver the required cargo took two days. Over this time, the Mi-26TS delivered more than 100 tons of machinery and special equipment on an external sling system to the rescue site.
- According to media, Russian Helicopters will take part in the Sochi-2014 Project. How do you see the Rostvertol's mission in organizing and conducting the first ever Russian Winter Olympics?
- The Mi-26T has repeatedly been involved in the construction of Olympic venues in Sochi, participated in the installation of power line pylons along highways being built in the city.
In September 2010, a Rostvertol-Avia airline's Mi-26T helicopter took part in the construction of a ropeway in Sochi. Work was done on order from LLC Image-Stroy in the area of =the Solokh-Aul and Lunnaya Polyana settlements at an altitude of 1,750 m.
The construction of Olympic venues is always a complex and demanding task. Such large-scale preparation for the Winter Olympics, which is under way in our country in a very difficult terrain and requires solving the widest range of issues - is extremely complex and demanding. Such unique construction requires unique equipment, so I'm sure the capabilities of our helicopter will be used in the Olympic area more than once.
- Could you tell about the advantages of the Night Hunter over its predecessor in more detail?
- The Mi-28N is a highly efficient new generation fighting machine designed to support Land Forces at any time of day and in any weather. To do this, it has everything needed: high speed, combat survivability, a wide range of modern protection and weapon systems.
High survivability of the helicopter has been achieved through spaced arrangement of engines that protect the main gearbox and allow the helicopter to continue its mission with one of them damaged. All vital systems and units of the helicopter and its crew are protected by reliable armor able to withstand hits from 12.7mm to 23mm rounds. New materials and designs increasing the Mi-28N's resistance to combat damages were used during its development. When hit by 20-30mm projectiles, the helicopter's rotor blades made of composite materials allow it to safely complete the flight. The design of the fuel system eliminates the risk of fuel explosion or ignition. The helicopter features minimum acoustic signature for ground weapons.
A modern armaments system installed on the Mi-28N provides the capability of using onboard weapons under adverse weather conditions. A movable gun mount is equipped with a 30mm 2A42 cannon. External store racks can carry the Ataka anti-tank guided missiles, Igla air-to-air IR guided missiles, as well as the S-8 and S-13 unguided aircraft rockets.
- In late 2008, a contract was signed to supply Mi-35M helicopters to Brazil's Ministry of Defence. How is progress on its fulfillment?
- Two batches of Mi-35M helicopters (six machines) have been supplied to Brazil through Rosoboronexport. The first batch was handed over to the customer in December 2009, the second one in the autumn of 2010. Let me remind you, 12 helicopters were to be delivered under the contract. Currently, Rostvertol is working on the production and delivery the next batch of Mi-35Ms to the customer.
The helicopter was developed jointly by Rostvertol and JSC Mil Moscow Helicopter Plant (both are part of Russian Helicopters). It has embodied technologies implemented on the new generation Mi-28N. In particular, both the Mi-35M and the Night Hunter share a more powerful engine, the VK-2500, a rotor system with composite blades, and an X-shaped tail rotor, which increases the directional control efficiency and reduces the acoustic signature of the helicopter.
The undeniable advantage of the Mi-35M is its round-the-clock combat capability. It is equipped with an advanced navigation and electronic display system with multifunction color displays, a surveillance and attack system, which includes thermal imaging and TV channels, a laser rangefinder and a direction finder. Lighting equipment used in the Mi-35M has been adapted to allow the crew to use Russian- or foreign-made night vision goggles.
The installation of new systems not only reduces the workload on the crew and enables the use of guided and unguided weapons of the helicopter at any time of day, but also makes it possible to perform takeoff and landing on unprepared and unequipped sites.
The Mi-35M is available in several versions (attack, assault-transport, ambulance and transport), contributing to the effective accomplishment of various missions.
Venezuela was the first country to acquire the Mi-35M. From 2006 to 2008, ten helicopters were delivered there. According to the Venezuelans, who have gained significant experience in operating the Mi-35M to date, these machines are certainly have a number of advantages over helicopters previously used in the national army aviation.
- How do you assess the competitiveness of your products abroad today? What are the challenges facing the company and how do you plan to solve them to improve competitiveness?
- As of today, our company has a quite impressive record of export operations. We have supplied our products abroad since 1964 and today they are in operation in dozens of countries. Certainly, huge experience has been gained.
As for competition, the Mi-26T, for example, has no rivals in the world for its capacity. Its closest competitor in this parameter - Boeing Chinook helicopter - was recovered more than once with a help of our machine. In Afghanistan, the Mi-26T was used several times to transport American helicopters which were shot down by Taliban militants and made an emergency landing. Attempts of American military to carry the disabled helicopters using its helicopters had proved unsuccessful. I think that such facts speak for themselves.
In terms of its armament and crew protection, Rostvertol-built Mi-28N is not inferior to any of the helicopters, including its main competitor - the American AN-64 Apache. The Night Hunter is the only helicopter in the world having armored side glasses. It carries a modern armaments mix to effectively destroy tanks, armored vehicles, enemy manpower, protected facilities, boats and other small floating equipment, to engage low-speed and low-flying enemy aircraft. A number of efforts to develop a Mi-28N version with dual controls for Russia's MoD and foreign customers are scheduled for 2011.
- What helps Rostvertol operate more steadily in difficult economic conditions, holding strong positions not only in Russia, but in foreign military equipment markets as well?
- Once the Russian economy was allowed to free float in the early 1990s, we and our team not only tried to survive, but were also seriously engaged in developing our own strategy and positioning our products on the market. One of the strategic directions, dictated by the need to maintain a strong position, was associated with the transition from Defence order to export contracts.
Time has shown that it was the right move. We have not only remained on the military equipment market, but, most importantly, have retained highly skilled professionals, including niche specialists. Engineers and technicians, technologists, designers are extremely valuable today. The development strategy of the plant has yielded results - we have now long-term money. We are in condition to carry out an in-depth modernization of production facilities. The latest technologies, machining production lines, and sophisticated five-axis CNC machines are purchased today rather obsolete equipment is forcedly replaced. Such modernization is costly, but it drastically cuts man-hours and improves the quality of the finished products.
- How would you formulate Rostvertol's social policy?
- Special attention is paid to social policy in our company. Even in the difficult 1990s Rostvertol's management did everything possible to ensure that employees received wages promptly every month. Today, the average wage in the company is over 27,000 rubles and annually grows by 17-19%.
Rostvertol currently employs over 7000 people and every employee is provided with a full social package. We seriously subsidize complex meals, provide vouchers to sanatoriums and rest homes, pay training and skill upgrading to a large extent. The children of our employees have a rest in our camps in the Black Sea and the Don River. Our Palace of Culture is a popular place of leisure for schoolchildren and young people around the city.
Substantial support is provided to Vocational School No. 8 on a permanent basis, stipends are paid to its students, and recently a full-fledged production base was established at the plant, where turners, millers, and mechanics undergo practical training.
An Aircraft Manufacturing Department was set up with our participation in Don State Technical University. Ten to fifteen graduates from this department come to us every year to get a job.
Another priority we are proud of is providing our employees and their families with housing. Every year we build and put in commission one house. Thus, a 70-apartment house was built for young professionals, which we are very interested in.