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Rostec
Rostec
(Russian: Ростех, translit. Rostekh), formerly Rostekhnologii (Russian: Ростехнологии) is a Russian state corporation established in late 2007 to consolidate strategically important companies with the ultimate goal of capitalizing them and bringing them to an IPO.[3] Rostec
Rostec
brings together about 700 entities which form 14 holding companies: eleven holding companies operate in the defense-industry complex and three 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.[4] Rostec
Rostec
was founded in 2007 as so called "state corporation", a 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.[5] Its headquarters are located in Moscow. The full name is State Corporation for Assistance to Development, Production and Export of Advanced Technology Industrial Product «Rostec» (Russian: Государственная корпорация по содействию разработке, производству и экспорту высокотехнологичной промышленной продукции «Ростех»).

Contents

1 History 2 Clusters 3 Supervisory board 4 Financial performance 5 Social policy

5.1 Sponsorship

6 United States sanctions 7 See also 8 References 9 External links

History[edit] On November 23, 2007, President Vladimir Putin
Vladimir Putin
endorsed the federal law[6][7] to establish Rostekhnologii, a state corporation, passed by the State Duma
State Duma
on November 9.[8][9] The state contributed 443 entities to the corporation’s capital.[10] 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.[11] At the time Rosoboronprom, a company eventually merged with Rostechnologii, acquired the controlling interest in VSMPO-AVISMA
VSMPO-AVISMA
in 2006, the ongoing 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.[12] In 2008, Pirelli
Pirelli
and Rostechnologii signed[13] 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.[14] In 2011, it was decided to launch production at the facilities of Sibur Holding[15] 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.[16] By 2015, the joint venture will manufacture 10.5 motocar and light truck tyres,[16] with the production volume reaching €500 million.[17] Since 2011, Renault-Nissan
Renault-Nissan
were negotiating buyout of the majority stake in AvtoVAZ
AvtoVAZ
with company’s co-owners Rostec
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
Renault-Nissan
Alliance would own 67.13% of shares. Their arrangements were legally executed in December 2012.[18] The actual stake of Renault-Nissan
Renault-Nissan
in AvtoVAZ
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
AvtoVAZ
share capital, only 94% of shares are actual voting shares, rather than 100%).[18] In 2006, VSMPO-AVISMA
VSMPO-AVISMA
agreed with Boeing[19] to set up a joint venture for machine processing of forgings for Boeing
Boeing
787 Dreamliner[19] 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
Rostec
and Ural Boeing
Boeing
Manufacturing. In October 2012, VSMPO-AVISMA
VSMPO-AVISMA
and Boeing
Boeing
signed a memorandum to expand production capacity of Ural Boeing
Boeing
Manufacturing.[20] 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.[21] The partners develop new titanium alloys and technologies for aircraft engineering, in particular, «Ti5553»[22] designed to reduce the aircraft weight.[21][19][23] In July 2008, Rostec
Rostec
signed an agreement with Metalloinvest
Metalloinvest
to set up a joint venture to develop the Udokan copper reserve in the Chita Oblast,[24] 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.[25] November 11, 2008, Rostec
Rostec
acquired 25.1% of shares in WiMAX Holding Ltd, a major shareholder of Scartel, a WiMAX-Yota operator. In November 2009, Rostec
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.[26] 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.[27] 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[28] at a new plant located in the village of Tomilino, Moscow
Moscow
Region.[29] Russian-made AW139 made its first flight on December 19.[30][31] 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.[32] The corporation has signed cooperation agreements with such organizations as UAC, USC,[33] RZhD,[34] Aeroflot,[35] Lukoil,[36] Gazprom[37] and others. Corporate rebranding was announced December 21, 2012.[38] The corporation changed its name, logo and slogan. A new logo features an open square symbolizing a window to the world and a focus frame.[26] According to The Wall Street Journal, rebranding is designed to make the corporation more open.[26] 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.[39] The corporation spent $1.5 million for rebranding.[26] 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
Rosneft
and Rostelecom.[40] In December 2015, Rostec
Rostec
Corporation’s supervisory board approved its development strategy through 2025.[41][42] The main objective of the strategy is to change the Russian economic model by diversifying the economy and increasing the share of high-tech civilian products and non-oil exports. Clusters[edit] In late 2016, Rostec
Rostec
includes about 700 organizations.[43] Holding companies of the group:[44]

Concern Radio-Electronic Technologies: military spec radio-electronic, state identification, aviation and radio-electronic equipment. Kalashnikov Concern: Russia’s largest manufacturer of combat weapons. Shvabe Holding: optical-electronic systems both for military and civil purposes; United Instrument Manufacturing Corporation: communications tools and systems, automated control systems, electronic security and robotic systems; Technodinamika: developer and manufacturer of aircraft equipment, including chassis, fuel systems, flight control systems and auxiliary power units; Nacimbio: pharmaceutical holding for research and development of immune biological remedies. 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. RT-Stankoprom: machine tool industry. Ruselectronics: electronic components, electronic devices and equipment, microwave equipment and semi-conductor devices; High Precision Systems (Vysokotochnye Kompleksy): weapons for the combat tactical zone; 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. Techmash: ammunition supplies for the Armed Forces. RT-Auto: owns stakes in AvtoVAZ
AvtoVAZ
and Kamaz. Oboronprom

Russian Helicopters United Engine Corporation: engines for military and civil aviation and space exploration programs.

Security Technologies

Directly controlled companies of Rostec:[45]

Rosoboronexport
Rosoboronexport
(arms export) VSMPO-AVISMA: produces 30% of the world’s titanium. AvtoVAZ
AvtoVAZ
(car manufacturer, minority stake) Kamaz: leading Russian manufacturer of trucks. RT-Global Resources (raw materials) RT-Invest (diversified, minority stake) RT-Business Development: charged with implementing the Rostec
Rostec
strategy aiming to increase capitalization of projects in the sectors of commercial advanced technologies, raw materials and associated infrastructure. Russia
Russia
TEC (exhibition complex) National Ecological Operator (waste management)

Supervisory board[edit]

Manturov Denis Valentinovich, Minister of Trade and Industry of the Russian Federation, Chairman of the Supervisory Board; Chemezov Sergey Viktorovich, CEO at Rostec; 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; Levitin Igor, Aide to the President of the Russian Federation; Siluanov Anton, Minister of Finance of the Russian Federation; Ostrovenko Vladimir, Deputy Chief of President’s Administration; Ushakov Yury Viktorivich, Aide to the President of the Russian Federation; Fomin Alexander Vasiliyevich, Deputy Defence Secretary of the Russian Federation.

Financial performance[edit] The preliminary financial performance for 2012 show that the overall revenue of Rostec
Rostec
exceeded RUR960 billion compared with RUR817 billion a year earlier.[46] Revenues from export to 70 countries globally exceeded RUR240 billion.[47] 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. Main financial indicators,[48] 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

Social policy[edit] The companies controlled by Rostec
Rostec
employ about 450,000 people.[49] A special focus of corporation’s responsibility involves 21 dominant employers which are part of Rostec.[50] 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.[51] The unemployment rate in Verkhnyaya Salda, Sverdlovsk Region, a company town of a VSMPO-AVISMA
VSMPO-AVISMA
enterprise,[52] is less than 1%.[53] In order to implement its Health National Program, the corporation has set up nine centers for high medical technologies.[54] Five centers for cardiovascular surgery (Khabarovsk, Krasnoyarsk, Chelyabinsk, Perm and Kaliningrad), two centers for neurosurgery ( Tyumen
Tyumen
and Novosibirsk) and to centers for traumatic surgery, orthopedics and endoprosthesis replacement ( Smolensk
Smolensk
and Barnaul).[55] Rostec
Rostec
is a participant in the Perinatal center development program along with the Ministry of Health of the Russian Federation, the Federal Compulsory Medical Insurance Fund and federal member state authorities.[56][57] In March 2017 company builds and equips perinatal centers in 15 member states of the Russian Federation:

6 republics: Bashkortostan, Buryatia, Dagestan, Ingushetia, Karelia and Sakha (Yakutia); 9 regions: Archangelsk, Briansk, Leningrad, Orenburg, Penza,[58] Pskov, Smolensk, Tambov and Ulianovsk.

Rostec
Rostec
pursues cooperation with leading higher educational institutions, including, among others, Bauman Moscow
Moscow
State Technical University, and the Plekhanov Russian University of Economics.[59] Sponsorship[edit] On November 27, 2007, Rostec
Rostec
became general sponsor of FC Krylia Sovetov Samara; however, in 2011 the corporation decided to suspend its support of the team.[60] In 2010 and 2011, Rostec
Rostec
sponsored Vitaly Petrov, Formula One
Formula One
racing driver. In 2012, Russian Helicopters
Russian Helicopters
partnered with Caterham F1Team for which Petrov drives.[61] Improving professional training of the employees, Rostec
Rostec
cooperates with the WorldSkills movement.[62] In 2015 the Corporation and WorldSkills Russia
Russia
concluded a cooperation agreement which is aimed mainly at the joint work on training specialists for high-tech industries. State Corporation Rostec
Rostec
is a general partner of WorldSkills Russia
Russia
in accordance with a three-year agreement.[63] United States sanctions[edit] On July 16, 2014, the Obama administration
Obama administration
imposed sanctions through the US Department of Treasury's Office of Foreign Assets Control (OFAC) by adding Rostec
Rostec
and other entities to the Specially Designated Nationals List (SDN) in retaliation for the ongoing Ukrainian crisis, annexation of the Crimean Peninsula by the Kremlin, and the Russian interference in Ukraine.[64][65] See also[edit]

Almaz-Antey Titan-Barrikady

References[edit]

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Renault-Nissan
signs deal on AvtoVAZ
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Boeing
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VSMPO-AVISMA
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Rostec
invites Norilsk Nickel to enter Udokan deposit ^ a b c d Alpert, Lukas I. (21 December 2012). "A Defensive Rebranding Exercise". Archived from the original on 25 December 2015.  ^ "First batch of thermal vision cameras made in Vologda with French assistance". business.highbeam.com.  ^ "Exclases Russia
Russia
Signs Contract for Five AW139 Helicopters to be Supplied by HeliVert". Archived from the original on 2013-10-06.  ^ " AgustaWestland
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Rostec
strategy". rostec.ru. Archived from the original on 2017-03-12. Retrieved 2017-03-15.  ^ "Rostec :: News :: Rostec's supervisory board has approved the corporation's development strategy through 2025". rostec.ru. Archived from the original on 2017-03-15. Retrieved 2017-03-15.  ^ "The Federal Law of the Russian Federation
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"About the State corporation on assistance to development, production and export in". cis-legislation.com. Archived from the original on 2017-03-16. Retrieved 2017-03-14.  ^ "Holding companies". Rostec. Archived from the original on 29 April 2017. Retrieved 28 April 2017.  ^ "Directly controlled companies". Rostec. Archived from the original on 17 March 2017. Retrieved 28 April 2017.  ^ Дранкина, Екатерина (24 December 2012). "Оборонка по последней моде". p. 35. Archived from the original on 27 September 2013 – via Kommersant.  ^ ""Ростехнологии" сменят образ за $1,5 млн". Vedomosti. 21 December 2012. Archived from the original on 15 August 2014.  ^ " Rostec
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2015 annual report" (PDF). Archived (PDF) from the original on 2017-04-19.  ^ "A Defensive Rebranding Exercise". WSJ.com. Archived from the original on 2016-10-24.  ^ "ДВАДЦАТКА "РОСТЕХНОЛОГИЙ"". Archived from the original on 2013-09-27.  ^ "Содействие трудоустройству работников дочерних обществ ОАО "АВТОВАЗ"". www.trud.samregion.ru. Archived from the original on 2013-09-27.  ^ "VSMPO-AVISMA, Boeing
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to create a talent pool for the industry". rostec.ru. Archived from the original on 2017-03-17. Retrieved 2017-03-15.  ^ "Ukraine-related Sanctions; Publication of Executive Order 13662 Sectoral Sanctions Identifications List". treasury.gov. 16 July 2014.  ^ "Announcement of Treasury Sanctions on Entities Within the Financial Services and Energy Sectors of Russia, Against Arms or Related Materiel Entities, and those Undermining Ukraine's Sovereignty". treasury.gov. 16 July 2014. 

External links[edit]

(in Russian) Rostec

v t e

Rostec

Holdings

Concern Avtomatika KRET High Precision Systems Kalashnikov Concern Nacimbio

Microgen

Oboronprom RT-Avto RT-Chemcomposite Ruselectronics Russian Helicopters‎ Security Technologies Shvabe Holding Stankoprom Techmash Technodinamika United Engine Corporation Uralvagonzavod

Directly controlled

AvtoVAZ Elektronika Central Scientific Research Institute Kaliningrad
Kaliningrad
Amber Combine Kamaz Novikombank Rosoboronexport Technopromexport VSMPO-AVISMA Technodinamika

Other

All-Russian Institute of Light Alloys Platon (toll system) Sibselmash TsNIITochMash Zhukovsky Int

.