Rostec

Rostec

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Type	non-profit organization (Russian state corporation)
Founded	2007
Headquarters	Moscow, Russia
Key people	Sergey Chemezov (CEO)
Revenue	US$ 16.5 billion  (2012)
Owner	Russian Government (51%)
Number of employees	900,000 (consolidated)
Subsidiaries	see below
Website	rostec.ru

Rostec (Russian: Ростех - Rostekh), formerly Rostekhnologii (Russian: Ростехнологии) is a Russian state corporation (a non-profit entity type) established in late 2007 to promote development, production and export of hi-tech industrial products for civil and defense sectors. It brings together 663 entities which form 13 holding companies. Eight holding companies operate in the defense-industry complex and five of them are involved in civil sectors. Rostec’s organizations are located in 60 constituents of the Russian Federation and supply goods to over 70 countries worldwide.

Rostekhnologii was founded in 2007 as so called "state corporation", a very special type of legal entity in Russia. The state corporation is established by equity contribution made by the Russian Federation. The organization is headed by Sergey Chemezov. Its headquarters are located in Moscow.

Full name in the Russian language is Государственная корпорация по содействию разработке, производству и экспорту высокотехнологичной промышленной продукции «Ростехнологии». Short name in the Russian language is Госкорпорация Ростех. Full name in the English language is State Corporation for Assistance to Development, Production and Export of Advanced Technology Industrial Product «Russian Technologies» (Rostec). Short name in the English language is State Corporation Rostec. Rostec was known as Rostekhnologii until December 2012.

History

On November 23, 2007, President Vladimir Putin endorsed the federal law to establish Rostekhnologii, a state corporation, passed by the State Duma on November 9. The state contributed 437 entities to the corporation’s capital. Their total loss was RUR630 billion; 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. Executives of some companies included in Rostec were in conflict with each other. At the time Rosoboronprom, a company eventually merged with Rostechnologii, acquired the controlling interest in VSMPO-AVISMA in 2006, the on-going conflict between the shareholders exposed it to crisis. In October 2005, the Federal Financial Market Service (FFMS) suspended trades in common shares on the RTS Exchange and MICEX.

Organization structure (holding companies)

Parent companies of holding structures.

Moscow:

• United Industrial Defence Corporation OboronProm
• Russian Electronics
• PROMINVEST
• RT-Chemical and Composite Technologies and Materials
• RT-Biotechprom
• RT-Stankoinstrument
• Machine Engineering Technologies
• Radioelectronic Technologies
• Aviation Equipment Holding
• Vysokotochnye Kompleksy
• RT-Auto

Yekaterinburg (Sverdlovsk Region):

• Shvabe (Optical Systems and Technologies until October 26, 2012)

Izhevsk (Udmurt Republic):

• IzhMash

United Industrial Defence Corporation OboronProm

Main article: Oboronprom

This multipurpose industrial and investment group operating in engineering and high-tech sectors was established in 2002. It is the management company for Russia’s helicopter and engine manufacturers. In 2011, its earnings reached RUR 230 billion, a six time increase from 2007 when Oboronprom was no part of the corporation.

Rostec holds 58.32% in Oboronprom’s share capital. Oboronprom controls the following holding companies:

• Russian Helicopters
• United Engine Corporation
• JSC Defense Systems

According to Rostec’s plans, Russian Helicopters will make its IPO within four or five years. The company also plans to make an IPO of ODK’s shares.

PROMINVEST

This holding company was established to manage real estate and civil and industrial construction projects. The company includes the following entities:

• RT-Construction Technologies
• Technopromexport
• V/O Tyazhpromexport; and
• Industrial Technologies

RT-Chemical and composite technologies and materials

This holding company operating in composite materials and technologies and technical chemistry was established in early 2011. The company brings together strategic enterprises and science centers. Its key businesses include science research and innovation developments related to new materials, unique structures and technologies and manufacturing hi-tech products for space, aviation, defense equipment, ground and water transport, energy, chemical production and many more industrial sectors.

RT-Biotechprom

Established in March 2008, this holding company implements hi-tech innovative projects in the biotechnology sector. The company controls the following entities: Belgorod Research and Development Institute for Medical Industry; JSC State Research Institute for Biosynthesis of Protein Substance; JSC Medical Electronic Hardware Plant (EMA); JSC Project Design Institute for Rubber Industry; JSC Research Institute for Rubber and Latex Products; JSC Research Institute Medical Industry Technologies; and JSC Kozha. Besides, the company owns 30% of shares in JSC East Siberia Biotechnology Plant (Tulun, Irkutsk Region).

Rostec plans to launch an IPO of RT-Biotechprom’s shares.

RT-Stankoinstrument

In 2009, Rostechnologii established RT-Machine Engineering Technologies as a management company for a holding company (integrated structure) in the engineering sector. The company was renamed JSC RT-Stankoinstrument on March 1, 2012. The holding company is a system integrator responsible for technical audit and upgrading of Rostec’s entities.

The holding company includes JSC VNIIavtogenmash, JSC VNIIALMAZ, JSC VNIIINSTRUMENT, JSC VNITIEM, JSC NIPTI MICRON, JSC OOPZ Neftechimavtomatika and JSC VO Stankoimport.

Machine Engineering Technologies

Established in 2011, JSC Research and production concern Machine Engineering Technologies is a holding company operating in the ammunition and special chemistry industry. It manufactures cannon-launched precision-guided munitions and multi-purpose rounds, multiple artillery rocket systems, unguided aviation and microcaliber ammunition, advanced aviation bomb weapons and other defence products. The civil range of the company includes agricultural machinery with attached and towing gear, metal structures and components for the engineering sector, mining and extraction equipment, electrical products, industrial explosives, bellows, main line pumps and consumer goods. The company includes JSC NPO Pribor, JSC NPO Bazalt, JSC NPO Pirotechnicheskiye Sistemy, JSC Machnostriotel and JSC NPO Splav.

Radioelectronic Technologies

Established in 2009, the concern includes companies which develop and manufacture аvionics, electronic warfare and friend-or-foe identification equipment, radio-measuring devices, cables, рconnectors, junctions, consumer electronics, еmedical devices and other civil products. It brings together over 95 entities located in 28 constituents of the Russian Federation. Company’s business operations are focused on performing public contracts to procure equipment used for electronic warfare and friend-or-foe identification, enhancing company’s performance and tapping new markets (adjacent military and civil markets for plug/socket connectors and cable products, household stoves, automated energy metering systems and multiple communication devices). Aviapribor Holding, a part of Radioelectronic Technologies and the Ministry of Industry and Trade have entered into the contract to manufacture engineering models of airborne avionics for Russia’s advanced aircraft. Under the resolution made by Rostec’s Supervisory Board in December 2012, the assets of Aviapriborostroyeniye Holding Company were transferred to Radioelectronic Technologies is order to establish Russia’s largest engineering center for the defence-industry complex and the civil sector.

The holding company employs 67,000 people. Its products are marketed to 60 countries worldwide. The largest customers include the Defence Ministry and other defence bodies, Rosatom and Roscosmos. General Director is Nicolay Alexandrovich Kolesov.

Aviation Equipment Holding

Main article: Aviation Equipment Holding

JSC Concern of Aviation Equipment is focused on development, manufacture and maintenance of aviation equipment and electric supply systems; military and civil parachute systems and components. The concern brings together 35 entities. Only 21 of them are controlled by the concern, including 3 federal state unitary enterprises and 18 joint stock companies (which own the 50% share in company’s capital). The state owns no controlling interest in the other 15 companies: it holds 30-49 percent of shares in 5 JSCs; 21.5%-25.5% in 8 JSCs and 20%-25% in 3 JSCs. The holding company includes JSC MMZ Rassvet; JSC Hydroagregat; JSC BLMZ; JSC MMZ Znamya; JSC Aviaagregat; JSC Agregat; JSC UAP Gidravlica; JSC Ufa Agregat PO; JSC NPP Zvezda; JSC NPP Respirator; JSC MMZ Mayak; JSC KEMZ; JSC ACB Yakor; JSC Electroprivod; JSC Sarapulsky Electrogeneratorny Zavod; JSC Electroavtomat; JSC Electric Engineering Plant Velcont; JSC MZEM; JSC UNPP Molnia; JSC Rumyantsev MPO; and JSC 2nd Moscow Engineering Plant.

The total share of defence production is 53% and civil production is 47%.

Vysokotochnye Kompleksy

Vysokotochnye Kompleksy is part of the defence-industry complex focused on high-precision systems and weapons for the combat tactical zone. It implements the full production cycle of weapons and defence equipment, from generating ideas to product distribution.

The company includes KBP Instrument Design Bureau, Degtyarev plant, KBM, JSC Nudelman Precision Engineering Design Bureau, JSC Safonovsky Plant Hydrometpribor, JSC Tulatochmash, JSC Tula Arms Plant, JSC CKBA, JSC Sheglovsky Val, JSC CBP – CKIB SOO, JSC Tula Ammunition Factory, JSC Rotor, and JSC Tulamashzavod. In December 2012, Rostec’s Supervisory Board approved the transfer of assets to Vysokotochnye Kompleksy from Engineering Construction Bureau, which is a large design and research center for design, manufacture, testing and upgrading of weapons and defence equipment. Its companies focus on developing guided weapon systems in four key areas: man-portable air defense systems; antitank missile systems; Tactical Ballistic Missile Systems and defensive aids suits.

Russian Electronics

Main article: Ruselectronics

JSC Russian Electronics was established in early 2009 as a successor to Russian Electronics, a state-owned holding company founded in 1997. The company is focused on development and production of electronic devices, materials and equipment, including microwave devices, semiconductor items and materials. Russian Electronics manufactures hardware components for Radioelectronic Technologies. It includes over 70 entities.

In December 2012, Rostec’s Supervisory Board transferred the assets of Sirius and Orion to Russian Electronics.

Orion was founded in 2009 as a special-purpose research and industrial association to develop communication systems, subsystems and equipment for defence, special and double purposes. Its companies were located in six federal regions. Orion employed 11,000 people.

It controlled 17 organizations, including JSC Omsk Research Institute for Instrument Engineering, JSC Barnaul Special Vostok Construction Bureau, and JSC Integral Research Institute for Special Communication Systems.

Sirius was established in 2009. Its key products include customized and replicated software of various uses, television equipment and devices for television reception, in particular, in extreme conditions (space environment, ultrahigh temperature environment and other hostile environments), automated control system elements, hardware and software for automated special-purpose systems, comprehensive security systems for critical facilities, territories and passenger transportation systems and telecommunication equipment. The company included over 20 enterprises, such as Internavigation Research Center for Advanced Navigation Technologies; JSC Radiozavod; FGUP Solid-State Engineering Construction Bureau; JSC Solnechnogorsk Instrument Plant; JSC Kristall Research Center; JSC Novosibirsk State Design Institute; JSC Novosibirsk Institute for Software Systems; JSC Popov Broadcast Reception and Acoustics Institute; JSC Television Research Institute; JSC Rastr Research Institute for Industrial Television.

RT-Auto

RT-Auto was registered in April 2010 with AvtoVAZ as a motorcar sub-holding company and KAMAZ as a cargo one.

RT-Auto pursues three major business areas: motorcar and auto components, freight cars and power plants. It brings together JSC AvtoVAZ, JSC KAMAZ, JSC Autodiesel, JSC Tutayevsky Motor Plant, and JSC NPO Electromashina.

Shvabe Holding

Established in 2008, the company was known as JSC NPK Optical Systems and Technologies until October 26, 2012. Its companies manufacture electrooptical equipment, devices and defence systems and hi-tech civil products, such as systems for surveillance, aerospace monitoring and remote sensing, laser systems and facilities, distance gauges, target finders, photolithographic systems, precision elements and nanounits, medical equipment, surveying instruments, lighting equipment and much more. Shvabe manufactures about 6,000 product units supplied to 83 countries.

The holding company includes NPO Astrofisica, JSC NPO Alfa, JSC Vologodsky Optical and Mechanical Plant, JSC NPO State Institute for Applied Optics, JSC Vavilov State Optics Institute, JSC OCB Granat, JSC Zagorsky Optical and Mechanical Plant, JSC Krasnogorsk Plant, JSC Lytkarino Optical Glass Plant, JSC Material Engineering Research Institute at Vavilov Optics Institute, JSC Novosibirsky Instrument Engineering Plant, JSC Optica, FGUP NPO Orion, JSC MZ Sapfir, JSC Precision Instrument Engineering Construction Bureau, JSC Foton, and JSC Urals Optical and Mechanical Plant. Since 2011, the holding company is registered in Yekaterinburg.

According to Rostec’s plans, Shvabe will launch an IPO within four or five years.

Kalashnikov Concern

On 13 August 2013, Izhmash and Izhevsk Mechanical Plant have been merged and formally renamed Kalashnikov Concern. Kalashnikov Concern holding 51% of Rostec shares and 49% retained by private investors. Kalashnikov Concern is also now Russia’s largest and most important manufacturer of combat automatic and sniper’s weapons, guided projectiles and a wide range of civil products, including shotguns, sporting rifles, machines and tools. Its products are marketed to countries around worldwide, including the USA, Great Britain, Germany, Norway, Italy and Canada etc.

Business

In late autumn 2012, Rostec included 663 organizations. Core business areas cover the following sectors:

• Automotive industry;
• Aircraft industry;
• Engine Building;
• Metallurgy;
• Construction;
• Optics;
• Composite and other sophisticated construction materials;
• Medical Equipment;
• Pharmaceutics;
• Industrial biotechnologies;
• Electronics;
• Instrumentation;
• Information technology and Telecommunications;
• Machine Building and Equipment Production for Industrial Upgrading;
• Weapons and Military Equipment Production.

According to the Federal Law on State Corporation Rostechnologii, the main goal of the corporation is to “promote development, manufacture and export of hi-tech industrial products by providing support to Russian-based organizations on the domestic and foreign markets, in particular, to developers and manufacturers of hi-tech products and any organizations where Rostechnologii may influence the decision-making process due to its controlling interest in their equity capital or under any agreements concluded with them, as well as raising investment in organizations operating in different industrial sectors, including the defence-industry complex”.

Core business operations of the corporation include the following:

• Support organizations in various industries, including the defence-industry complex, in development and production of hi-tech industrial products, advanced research and technological development;
• Promote and distribute hi-tech industrial products and any related goods and intellectual property on the domestic and foreign markets;
• Pursue government policy in military and technical cooperation of the Russian Federation and foreign states and state-run arms program and implement the state-run arms program, the state defence order and mobilization program, the long-term target programs, the federal programs and the military and technical cooperation in accordance with the laws of the Russian Federation;
• Raise investment in organizations operating in various industrial sectors, including the defence-industry complex, in particular, to promote development of competitive hi-tech industrial and military products;
• Make advertising and marketing efforts, organize and hold exhibitions (shows) of sample products of civil, defence and double purpose for the benefit of organizations operating in various industrial sectors, including the defence-industry complex, within and outside of the Russian Federation;
• Assist organizations operating in various industrial sectors, including the defence-industry complex, in applied research in advanced areas of science and technology and implement sophisticated technologies in production to promote and expand domestic developments in hi-tech industrial products and cut the cost and period of their design;
• Assist a government agency organization in foreign distribution of defence products.

Supervisory Board

• Chemezov Sergey Viktorovich, CEO at Rostec;
• Manturov Denis Valentinovich, Minister of Trade and Industry of the Russian Federation, Chairman of the Supervisory Board;
• Borisov Yury Ivanovich, Deputy Defence Minister of the Russian Federation;
• Brycheva Larisa Igorevna, Assistant to the President of Russia; Head of the State Legal Directorate in the Presidential Executive Office;
• Klepach Andrey Nikolayevich, Deputy Minister for Economic Development of Russia ;
• Levitskaya Alexandra Yurievna, First Deputy Government Chief of Staff of the Russian Federation;
• Tyazhelnikova Liudmila Alexandrovna, Deputy Head of the Presidential Experts Directorate;
• Ushakov Yury Viktorivich, Aide to the President of the Russian Federation;
• Fomin Alexander Vasiliyevich, Director at the Federal Service for Military and Technical Co-Operation.

Growth strategy

The Supervisory Board of Rostec has approved the Growth Strategy Program of State Corporation Rostechnologii until 2020 to specify the goals and priorities of corporate growth. As the most adequate business model for Rostec, the Growth Strategy defines the development corporation model which enables it to efficiently balance the long-term strategic state interests and business goals. The transfer of shares in the state-owned enterprises to Rostec is planned to be completed by December 31, 2014. This period was extended to complete procedures related to аcorporatizing federal state unitary enterprises. The transfer of subsidiary shares to the holding companies started in the first quarter of 2013. Radioelectronic Technologies was the first company where shares in 18 entities were transferred. Rostec will be transferred shares in 278 entities, including 243 companies in the defence-industry complex and 35 companies in the civil sector. Totally, 25 organizations will stay under direct control, excluding parent companies of the holding and infrastructure companies. Until December 31, 2013, г the Supervisory Board intends to submit the proposal on company’s conversion into a joint stock company to the President of the Russian Federation and the Government; and such joint stock company may be established as early as the first quarter of 2014. Rostec will manage assets under a fundamentally new model, with 13 holding companies with the vested management authority emerging as the centers to create value. The central management body of Rostec will focus on strategic matters. Subject to the Growth Strategy, Rostec’s earnings will exceed RUR 2.1 trillion by 2020; and corporations’ output per employee will grow two times to RUR 4 million from RUR 1.9 million.

One goal of Rostec is to increase its capitalization and launch an IPO of its most investment-attractive holding companies and organizations, among them are Russian Helicopters, Russian Electronics, Schwabe Holding, Concern Radioelectronic Technologies, United Engine Corporation and RT-Biotechprom.

Rebranding

Corporate rebranding was announced December 21, 2012. The corporation changed its name, logo and slogan. Rostechnologii was renamed Rostec. A new logo features an open square symbolizing a window to the world and a focus frame. It reflects philosophy of the corporate slogan “Partner in Development”. The corporation also launched a new website in six languages (Russian, English, German, French, Spanish, Arabic and Chinese). The languages were selected with a view to those countries and regions which emerge as the corporation’s largest customers. Rostec runs an official YouTube channel and accounts in the social networks, such as Facebook, Twitter, Instagram, and VKontakte. “Communications and brand management increasingly affect the value-added of products,” Sergey Chemezov, Rostec’s CEO, said. “We need the international brand to commit global technology and financial leaders, successfully pursue corporate strategy and enhance corporation’s capitalization”. According to The Wall Street Journal, rebranding is designed to make the corporation more open. The corporate rebranding project was implemented by Apostle, a strategic communications center, and Ilya Oskolkov- Tsentsiper, founder and co-owner of Winter, a UK agency. Graphic design was developed under supervision of Hazel Macmillan (British Airways is among her latest projects.) The website was developed by SomeOneElse, a UK-based agency which projects include HSBC, Land Rover and BBC. The corporation spent $1.5 million for rebranding.

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. 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.

Current projects

• In 2008, Pirelli and Rostechnologii signed the Memorandum on the principal conditions of establishing a JV to manufacture tyres for motorcars and trucks. Initially, the parties intended to commence construction of a special-purpose plant in Togliatti; however, the initial plan was revised. In 2011, it was decided to launch production at the facilities of Sibur Holding from which the partners purchased Kirovsky and Voronezhsky Tyre Plants. Total value of the transferred assets was €222 million. Currently, the parties are upgrading the production facilities. In January 2013, Voronezhsky Tyre Plant launched a new production line. By 2015, the joint venture will manufacture 10.5 motocar and light truck tyres, with the production volume reaching €500 million.
• In February 2008, JSC AvtoVAZ and French vehicle manufacturer Renault with an extensive input from Rostec signed an agreement on strategic partnership. The agreement launched a full-scale restructuration of the domestic vehicle manufacturer: Renault representatives were included in the top-management bodies of AvtoVAZ and its shares were distributed among the members of the consortium. The French company acquired a blocking stake in AvtoVAZ of 25% plus one share. In 2009, Renault and AvtoVAZ signed an additional agreement under which Renault made an asset contribution, including the transfer of technologies, production equipment and expertise valued at €240 million. The funds were allocated to modernization of AvtoVAZ’s production line and its upgrading to manufacture Renault and Nissan cars and new Lada models developed on the basis of foreign innovative technologies. This will allow AvtoVAZ to recover profitability and maintain the leading positions of Lada, Renault and Nissan brands on the Russian market. Since 2011, Renault-Nissan were negotiating buyout of the majority stake in AvtoVAZ with company’s co-owners Rostec and Troika Dialog. In May 2012, the parties reached a preliminary agreement to set up a joint venture to hold 74.5% shares in AvtoVAZ. They also agreed that Renault-Nissan Alliance would own 67.13% of shares. Their arrangements were legally executed in December 2012.

Thus, Renault-Nissan and Rostec will contribute their interests in the plant (28%, 98% and 25%) to the joint venture which will further acquire 24.14% of shares owned by Troika Dialog. The actual stake of Renault-Nissan in AvtoVAZ will be 50.1% and Rostec’s stake 24.5% which is a blocking stake for the plant (according to historical distribution of AvtoVAZ share capital, only 94% of shares are actual voting shares, rather than 100%).

• In 2006, VSMPO-AVISMA agreed with Boeing to set up a joint venture for machine processing of forgings for Boeing 787 Dreamliner and Russian-made aircraft. The parties signed the relevant agreement in 2007. It took two years to put up a new plant, employ and train personnel and install production equipment. In 2009, the new enterprise was launched as world’s most sophisticated production plant set up by Rostec and Ural Boeing Manufacturing. In October 2012, VSMPO-AVISMA and Boeing signed a memorandum to expand production capacity of Ural Boeing Manufacturing. The joint venture purchased four new machines which are scheduled to be installed in 2013. US$12 million will be additionally invested in the development. The partners develop new titanium alloys and technologies for aircraft engineering, in particular, «Ti5553» designed to reduce the aircraft weight.
• In July 2008, Rostec signed an agreement with Metalloinvest to set up a joint venture to develop the Udokan copper reserve in the Chita Oblast, which resources are evaluated at 20 million tons of copper and 1.3 billion tons of ore or 30% of total Russia’s known reserves. In September 2008, Mikhailovsky Mining and Processing Enterprise, a part of Metalloinvest, won the tender for reserve development. A of mid-2012, the parties were performing preliminary work to commence the reserve development in Udokan. Copper production is scheduled to begin no later than June 2014.
• November 11, 2008, Rostec acquired 25.1% of shares in WiMAX Holding Ltd, a major shareholder of Scartel, a WiMAX-Yota operator.
• In November 2009, Rostec and Thales signed a memorandum on partnership and cooperation in electronic systems for the defence and airspace industries. The document regulates cooperation of two companies to share and use hi-tech developments in both defence and civil sectors. In 2010, the parties agreed to expand their joint efforts and signed an additional cooperation agreement which contemplated establishment of a joint venture for development, manufacturing and post-sales support in air traffic management and integrated modular avionics for civil aviation. This joint venture was set up at the premises of Vologda Optical and Mechanical Plant focused on licensed production of thermal imagers Catherine FC and Catherine XP and long-range multi-function binoculars Sophie-MF.
• In 2010, Russian Helicopters, a part of Rostechnologii, reached an agreement with AgustaWestland, a part of Finmeccanica, to set up JV JSC HeliVert to assemble AW139 helicopters at a new plant located in the village of Tomilino, Moscow Region. Russian-made AW139 made its first flight on December 19. In 2012, the parties also decided to expand their cooperation and signed a preliminary framework agreement on joint development, manufacture and distribution of a 2.5 ton state-of-the-art one-engine helicopter.
• Rostec is pursuing joint work with other foreign partners and Russia’s largest transport and energy companies, industrial groups, government agencies, local and regional bodies and constituents of the Russian Federation.

The corporation has signed cooperation agreements with such organizations as UAC, USC, RZhD, Aeroflot, Lukoil, Gazprom and others.

The main communication mechanism with executive authorities involves cooperation agreements in various business areas, including promotion of development, manufacture and export of hi-tech industrial products for civil, double and defence purposes. As of September 2012, the corporation has entered into agreements with 31 regions and opened its representative offices in 26 constituents of the Russian Federation.

Social policy

The companies controlled by Rostec employ about 900,000 people. A special focus of corporation’s responsibility involves 21 dominant employers which are part of Rostec. As a good example of corporate activity aimed at stabilization of social environment in one-company towns mass media covered Rostec’s policy pursued in relation to AvtoVAZ, a dominant employer at 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 Verkhnyaya Salda, Sverdlovsk Region, a company town of a VSMPO-AVISMA enterprise, is less than 1%.

Health National Project

Further information: National Priority Projects

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 to centers for traumatic surgery, orthopedics and endoprosthesis replacement (Smolensk and Barnaul).

Education

Currently, Rostec has entered into cooperation agreements with 214 basic (field-specific) higher educational institutions on field-specific contractual training of specialists, development of joint work in the core (research and technology) areas and carrying out joint research (design and technology) work. The corporation established 258 field-specific departments which implement 382 curriculums of higher education in the interests of the corporation and its organizations.

The corporation established the department for management in the military and technical cooperation area at the Moscow State Institute of International Relations (MGIMO) which educated and provided employment with the corporation over 50 students. Rostec pursues cooperation with other leading higher educational institutions, including, among others, Bauman Moscow State Technical University, and the Plekhanov Russian University of Economics.

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.

Military and technical cooperation programs

A core Rostec’s pursuit is enhancing military and technical business cooperation with foreign states. The 2011 volume of military supplies to foreign customers made by Rosoboronexport was US$10.7 billion considering the expected US$9.19 billion. A continuous increase in sales (US$2 billion in 2011) makes Russia the second largest exporter of military products after the USA. In 2012, the export revenues from Russian-made weapons was US$15.2 billion, and the order portfolio for Russian military products reached US$46.3 billion.

External links

• (Russian)Rostec