Red October Steel Factory
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''Volgogradskiy Metallurgicheskiy Zavod Krasny Oktyabr'' (russian: Закрытое акционерное общество "Волгоградский металлургический завод "Красный Октябрь", Zakrytoye aktsionernoye obshchestvo "Volgogradskiy metallurgicheskiy zavod "Krasny Oktyabr") is a Russian closed
joint-stock company A joint-stock company is a business entity in which shares of the company's capital stock, stock can be bought and sold by shareholders. Each shareholder owns company stock in proportion, evidenced by their share (finance), shares (certificates ...
which maintains the Krasny Oktyabr factory, one of the largest Russian
metallurgy Metallurgy is a domain of materials science and engineering that studies the physical and chemical behavior of metallic elements, their inter-metallic compounds, and their mixtures, which are known as alloys. Metallurgy encompasses both the sc ...
facilities.


History

The company's factory was established on April 30, 1897, by the French Ural-Volga Metallurgical Society (russian: «Урало-Волжское металлургическое общество»). After the
Bolshevik Revolution The October Revolution,. officially known as the Great October Socialist Revolution. in the Soviet Union, also known as the Bolshevik Revolution, was a revolution in Russia led by the Bolsheviks, Bolshevik Party of Vladimir Lenin that was ...
the factory became known as ''Krasny Oktyabr'', Russian: "Red October" (named for the
October 1917 Revolution The Russian Revolution was a period of Political revolution (Trotskyism), political and social revolution that took place in the former Russian Empire which began during the First World War. This period saw Russia abolish its monarchy and ad ...
) To the west, it was widely known as the Red October Factory. The factory provided steel for the
Stalingrad Tractor Factory , romanized_name = , former_name = , type = Open joint-stock company , traded_as = , industry = Machinery, Defence , fate = , predecessor = , successor = , founded = , founder = , defunct = , hq_location_ ...
. It was completely destroyed in the
battle of Stalingrad The Battle of Stalingrad (23 August 19422 February 1943) was a major battle on the Eastern Front of World War II where Nazi Germany and its allies unsuccessfully fought the Soviet Union for control of the city of Stalingrad (later re ...
, but was restored by 1946. During the
Soviet The Soviet Union,. officially the Union of Soviet Socialist Republics. (USSR),. was a List of former transcontinental countries#Since 1700, transcontinental country that spanned much of Eurasia from 1922 to 1991. A flagship communist state, ...
era it was awarded the
Order of Lenin The Order of Lenin (russian: Орден Ленина, Orden Lenina, ), named after the leader of the Russian October Revolution, was established by the Central Executive Committee on April 6, 1930. The order was the highest civilian decoration b ...
and the
Order of the Red Banner of Labour The Order of the Red Banner of Labour (russian: Орден Трудового Красного Знамени, translit=Orden Trudovogo Krasnogo Znameni) was an order of the Soviet Union established to honour great deeds and services to th ...
.


1999 bankruptcy

In 1999, Krasny Oktyabr entered bankruptcy hearings. In 2003, the Midland Group gained control of Krasny Oktyabr. In 2007,
Rosoboronexport JSC Rosoboronexport (russian: AO Рособоронэкспорт, ''Rosoboroneksport'') is the sole state intermediary agency for Russia's exports/imports of defense-related and dual use products, technologies and services. The Rosoboronexport F ...
gained control of ''Krasny Oktyabr'' through its subsidiary Russpetsstal which purchased a 100% stake in Krasny Oktyabr from the Alex Shnaider (russian: Алекс Шнайдер) and
Eduard Shifrin Eduard Volodymyrovych Shifrin (alternative spelling: Shyfrin) ( uk, Едуард Володимирович Шифрін; russian: Эдуа́рд Влади́мирович Шифри́н; born 12 July 1960) is a Ukrainian entrepreneur who is a co- ...
(russian: Эдуард Шифрин) associated Midland Group. In 2007 under advice from
Troika Dialog Sberbank CIB is a multinational investment banking and asset management firm headquartered in Moscow, Russia, and a subsidiary of Sberbank. It was founded in Moscow in 1991, and was formerly known as Troika Dialog. Sberbank CIB's core lines of ...
and its managing director Sergey Skvortsov, Sergey Chemezov, who was the General Director of
Rostec Rostec ( rus, Ростех, p=, r=Rostekh), officially the State Corporation for Assistance to Development, Production and Export of Advanced Technology Industrial Product Rostec (russian: Государственная корпорация по ...
, formed one holding for all enterprises manufacturing special steels and alloys. On 28 November 2007, Krasny Oktyabr under general director Sergey Nosov (russian: Сергей Носов) was placed in a holding CJSC Russpetsstal (russian: ЗАО «Русспецсталь») which RosTec, a firm which was formerly known as
Rosoboronexport JSC Rosoboronexport (russian: AO Рособоронэкспорт, ''Rosoboroneksport'') is the sole state intermediary agency for Russia's exports/imports of defense-related and dual use products, technologies and services. The Rosoboronexport F ...
until 25 November 2007, held a 25.1% stake through its subsidiary Promimpex (russian: «Промимпекс») and a 50% stake was held in two
Cyprus Cyprus ; tr, Kıbrıs (), officially the Republic of Cyprus,, , lit: Republic of Cyprus is an island country located south of the Anatolian Peninsula in the eastern Mediterranean Sea. Its continental position is disputed; while it is geo ...
based firms Lacoveta Management and Briefway Trading, and a 24.9% stake was held by the
Guernsey Guernsey (; Guernésiais: ''Guernési''; french: Guernesey) is an island in the English Channel off the coast of Normandy that is part of the Bailiwick of Guernsey, a British Crown Dependency. It is the second largest of the Channel Islands ...
based Midland Steel Industries Limited. For financing both JSC Russpetsstal (russian: ОАО «Русспецсталь») and CSJC Russpetsstal in the holding Russpetsstal,
VTB VTB Bank (; formerly known as ''Vneshtorgbank'', , lit. 'International Trade Bank') is a Russian majority state-owned bank headquartered in various federal districts of Russia; its legal address is registered in St. Petersburg; as of 2022 ...
provided 1.7 billion rubles in early 2007 and 1.96 billion rubles at the end of 2007, Sberbank provided almost 2 billion rubles in 2008-2009 in addition to the 1 billion rubles that Krasny Oktyabr obtained from Sberbank in 2006, Gazprombank provided 1.8 billion rubles in 2008, and
Bank Rossiya The Rossiya Bank (Bank Rossiya (russian: Банк «Росси́я»), in Russian: Акционерный коммерческий банк Россия, АКБ Россия) is a Russian joint stock bank founded on June 27, 1990. The company's h ...
provided 1.3 billion rubles to (Stupinskaya Metallurgical Company) which was held by JSC Russpetsstal.


2009 bankruptcy

The company entered bankruptcy proceedings in 2009 with
Andrey Akimov Andrey Igorevich Akimov (in russian: Андрей Игоревич Акимов, born 22 September 1953 in Leningrad, Soviet Union) is the Chairman of the Management Board of Gazprombank (open joint-stock company). He is believed to be a former K ...
as interim director. In 2013 it came under the ownership of
Dmitry Gerasimenko Dmitry Petrovich Gerasimenko (russian: Дмитрий Петрович Герасименко; born 29 September 1978) is a Russian businessman, ex-owner of steel company Krasny Oktyabr Closed Joint-Stock Company and of basketball clubs BC Krasny ...
.), placed numerous persons from Dneprospetsstal at positions at Krasny Oktyabr including his mother Svetlana Borisovna Gerasimenko, who became financial director and conducts her business with Krasny Oktyabr over the phone from her home in Dnipr where she instructs her fellow accountants and bookkeepers where to write each number for the various forms and financial documents,
Eduard Shifrin Eduard Volodymyrovych Shifrin (alternative spelling: Shyfrin) ( uk, Едуард Володимирович Шифрін; russian: Эдуа́рд Влади́мирович Шифри́н; born 12 July 1960) is a Ukrainian entrepreneur who is a co- ...
, who worked with Svetlana Gerasimenko at Dneprospetsstal, Vadim Leibenzon, who Gerasimenko calls his “right hand” and in the early 1990s led the steel shop at Dneprospetsstal and became general director of Dneprospetsstal in 1998-2001 and 2003-2004, and Konstantin Ryabov, who became the president of Red October International and was very close to Viktor Pinchuk who had been a co-owner of Dneprospetsstal until 2008. In November 2016, Gerasimenko was detained in Cyprus on fraud charges, over the alleged theft of a $65 million loan from VTB Bank. Gerasimenko believed that representatives of Uralvagonzavod and Oleg Sienko, who was the general director of Uralvagonzavod, represents Rostec, and is a protege of Sergey Chemezov, were involved in stealing the proceeds from the loan before the funds were received by Gerasimenko and Krasny Okyabr. In 2016, Sienko stated, "In fact, all the profitability that we have goes to servicing the loan portfolio." From community.apan.org/wg/tradoc-g2/fmso/ In March 2017, Alexander Potapov (russian: Alexander Valerievich Potapov) replaced Sienko as head of Uralvagonzavod due to financial abuse. For his freedom from incarceration, Dmitry Gerasimenko "sold" the plant, which was in bankruptcy proceedings, to Pavel Krotov in late November 2018.


2018 state-backed financial rescue

The plant was preserved in 2018 with government intervention. A subsidiary, Volgograd Drilling Equipment Plant was restarted in 2020. After six years of inactivity, the company is reviving. VZBT retained its main activity - the production of drilling rigs. The stainless steel production was 34093 tons in 2020, compared to 2019, which was 26281 tons.


Production delays

During the
War in Ukraine The following is a list of major conflicts fought by Ukraine, by Ukrainian people or by regular armies during periods when independent states existed on the modern territory of Ukraine, from the Kyivan Rus' times to the present day. It also i ...
, "the full development of the factory is hindered by a large number of debts, including to commercial banks" causing financial difficulties which disrupted production at Krasny Oktyabr and Uralvagonzavod so significantly that, in 2019, the 2013 order for pressure reactor containers for nuclear powered submarines was not completed, and the 2012 order for the initial 132 T-14 Armata MBT or 44 tanks annually, which were to be delivered in 2015 for experimental testing, had not been fulfilled but instead Uralvagonzavod "will supply only 16 vehicles by the end of 2019" or later and would not complete the initial order until after 2021 or later.


Submarines

In late November 2017, only three of the eight pressure reactor containers for Russian
nuclear submarines A nuclear submarine is a submarine powered by a nuclear reactor, but not necessarily nuclear-armed. Nuclear submarines have considerable performance advantages over "conventional" (typically diesel-electric) submarines. Nuclear propulsion, ...
could be delivered in May 2018 on time from a 2013 order. The remaining delivery of the other five hulls was frozen. Because of ongoing financial difficulties, Krasny Oktyabr had reduced its work force from 5,200 employees in December 2016 to less than 4,000 in October 2017 and then to only 800 with a 20% to 30% reduction in salary and pay. Both Dmitry Gerasimenko and his mother Svetlana Gerasimenko, who lives in
Dnepr Dnepr may refer to: *Dnieper, a river flowing through Russia, Belarus and Ukraine to the Black Sea * Dnepr (motorcycle), a Ukraininan motocycle brand * Dnepr (rocket), a 1999 space launch vehicle *Dnepr radar Dnepr may refer to: *Dnieper, a river ...
, are Ukrainian citizens.


Malachite armor for T-14 Armata

To support Uralvagonzavod's T-14 Armata, Krasny Oktyabr is participating in the production of the
Malachite Malachite is a copper carbonate hydroxide mineral, with the formula Cu2CO3(OH)2. This opaque, green-banded mineral crystallizes in the monoclinic crystal system, and most often forms botryoidal, fibrous, or stalagmitic masses, in fractures ...
dynamic protection armour with the ''44S-sv-Sh'' (russian: «44С-Св-Ш») steel which was developed by
Moscow Moscow ( , US chiefly ; rus, links=no, Москва, r=Moskva, p=mɐskˈva, a=Москва.ogg) is the capital and largest city of Russia. The city stands on the Moskva River in Central Russia, with a population estimated at 13.0 million ...
's '' OOO Steel Research Institute'' (russian: Научно-исследовательский институт стали («НИИ стали»))). and intended to meet STANAG 4569 Level 5 standards for protection against 7.62-14.5 mm caliber heavy armor-piercing bullets and have improved cold weather protection for use in the
Arctic The Arctic ( or ) is a polar regions of Earth, polar region located at the northernmost part of Earth. The Arctic consists of the Arctic Ocean, adjacent seas, and parts of Canada (Yukon, Northwest Territories, Nunavut), Danish Realm (Greenla ...
environment. Malachite is a fourth generation armor, which is a modular complex of built-in dynamic protection, and will be used on the Armata platforms. Numerous financial difficulties at Krasny Oktyabr resulted in production delays of the ultra high strength armoured steel "44S-Sv-Sh".


Notes


References


External links


Official website,2006

Official website
{{Battle of Stalingrad Steel companies of Russia Steel companies of the Russian Soviet Federative Socialist Republic Companies based in Volgograd Oblast Companies nationalised by the Soviet Union