KBM is hoping for more than $400m in new orders from Rosvooruzheniye

Published: 3/31/2000

KBM"s manufacturing plant in Kolomna is hoping for more than $400m in new orders after signing a general cooperation agreement with state arms dealer Rosvooruzheniye. KBM officials said Rosvooruzheniye could help the company complete several large arms deals and steal a march on its competitor firm Tula, the KBP instrument-making plant. Nikolai Gushchin, KBM director and head designer, said that the deal signed in February could increase KBM"s exports by as much as $100m a year, particularly of its Arena active armoured defence system. At a cost of nearly 20% of the tanks it is designed to protect, Arena has a 96-98% effectiveness rate in defending against attacks by modern anti-tank systems, according to company data. KBM is also confident that the Rosvooruzheniye deal will help boost export sales of its Iskander-E tactical rocket system, which has already been added to the government"s list of permissible arms exports despite the fact that testing is not scheduled for completion until the second half of 2001. Preliminary negotiations have already begun with potential Iskander buyers, officials have said. According to Valery Grishin, KBM"s deputy director, the company has exported $20-30m worth of weapons over the past several years. Most of these sales were for the Igla shoulder-fired anti-aircraft missile, licensing for Igla production and remote-control anti-tank systems. The company is also confident of winning a tender recently announced by Turkey for the delivery of 1,000 tanks equipped with an active armoured-defence system. If Turkey stays with the initial tender conditions, KBM could earn up to 20% of the $2bn contract. Vladimir Potanin"s Interros group is also looking to profit from sales of the Arena armoured-defence systems. Together with directors of KBM and Rosvooruzheniye, Boris Kuzyk, general director of new programmes and concepts, attended the signing of the agreement. Previously, Interros owned the controlling stakes in KBM and, thanks to a line of credit from Interros-owned Uneximbank, KBM was able to survive a difficult period between 1992 and 1994. Interestingly, Kuzyk once served as Boris Yeltsin"s adviser for arms exports.

Article ID: 1631