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.
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.
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. 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
3 Supervisory board
4 Financial performance
5 Social policy
6 United States sanctions
7 See also
9 External links
On November 23, 2007, President
Vladimir Putin endorsed the federal
law to establish Rostekhnologii, a state corporation, passed by
State Duma on November 9. The state contributed 443 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 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.
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.
Renault-Nissan were negotiating buyout of the majority
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. The actual stake of
AvtoVAZ will be 50.1% and Rostec’s stake 24.5%
which is a blocking stake for the plant (according to historical
AvtoVAZ share capital, only 94% of shares are actual
voting shares, rather than 100%).
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,
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
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.
The corporation has signed cooperation agreements with such
organizations as UAC, USC, RZhD, Aeroflot, Lukoil,
Gazprom and others.
Corporate rebranding was announced December 21, 2012. 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.
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.
The corporation spent $1.5 million for rebranding. 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 and Rostelecom.
In December 2015,
Rostec Corporation’s supervisory board approved
its development strategy through 2025. 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.
In late 2016,
Rostec includes about 700 organizations.
Holding companies of the group:
Concern Radio-Electronic Technologies: military spec radio-electronic,
state identification, aviation and radio-electronic equipment.
Kalashnikov Concern: Russia’s largest manufacturer of combat
Shvabe Holding: optical-electronic systems both for military and civil
United Instrument Manufacturing Corporation: communications tools and
systems, automated control systems, electronic security and robotic
Technodinamika: developer and manufacturer of aircraft equipment,
including chassis, fuel systems, flight control systems and auxiliary
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
Techmash: ammunition supplies for the Armed Forces.
RT-Auto: owns stakes in
AvtoVAZ and Kamaz.
United Engine Corporation: engines for military and civil aviation and
space exploration programs.
Directly controlled companies of Rostec:
Rosoboronexport (arms export)
VSMPO-AVISMA: produces 30% of the world’s titanium.
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
aiming to increase capitalization of projects in the sectors of
commercial advanced technologies, raw materials and associated
Russia TEC (exhibition complex)
National Ecological Operator (waste management)
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
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
Fomin Alexander Vasiliyevich, Deputy Defence Secretary of the Russian
The preliminary financial performance for 2012 show that the overall
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.
Main financial indicators, 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
The companies controlled by
Rostec employ about 450,000 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%.
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 (
Novosibirsk) and to centers for traumatic surgery, orthopedics and
endoprosthesis replacement (
Smolensk and Barnaul).
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
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,
Pskov, Smolensk, Tambov and Ulianovsk.
Rostec pursues cooperation with leading higher educational
institutions, including, among others, Bauman
Moscow State Technical
University, and the Plekhanov Russian University of Economics.
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.
Improving professional training of the employees,
with the WorldSkills movement. In 2015 the Corporation and
Russia concluded a cooperation agreement which is aimed
mainly at the joint work on training specialists for high-tech
industries. State Corporation
Rostec is a general partner of
Russia in accordance with a three-year agreement.
United States sanctions
On July 16, 2014, the
Obama administration imposed sanctions through
the US Department of Treasury's Office of Foreign Assets Control
(OFAC) by adding
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.
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(in Russian) Rostec
High Precision Systems
United Engine Corporation
Elektronika Central Scientific Research Institute
Kaliningrad Amber Combine
All-Russian Institute of Light Alloys
Platon (toll system)