Farnborough Air Show

Russian Military Exports Grow As Rosoboronexport Seeks To Expand Client Base

 - July 8, 2012, 6:20 AM

Geopolitical shifts including regime-change in Libya, the stiffening of international sanctions against Iran and violent unrest in Syria, are among the trends compelling Russian military export agency Rosoboronexport to keep looking for new clients worldwide. This is, to a large degree, one of its primary motives for exhibiting at the Farnborough International Airshow.

But despite the aforementioned problems, Russian military equipment sold well last year with Rosoboronexport reporting deliveries valued at approximately $12 billion–representing almost a 16-percent increase on 2010. This followed a period of stagnation around 2007 to 2009, when the annual totals had dipped to between $7.5 billion and $8.5 billion.

According to Rosoboronexport CEO Anatoly Isaikin, Russian military exports have not been impacted by the continuing economic downturn because its clients are mainly in the Asia Pacific and Middle East regions, which have not been as badly impacted as Western states. “Our deliveries haven’t been affected by the crisis as we haven’t got any volume decrease,” he told AIN.

Being the only authorized supplier of weapons to foreign countries, Rosoboronexport (Chalet A1 Hall 1 Stand E4, E9 & E11) is responsible for 90 percent of the nation’s arms exports. The rest of the total is accounted for by sales of spare parts and modernization programs for systems delivered earlier and executed by a dozen of Russia’s authorized OEMs.

As of late 2011, Rosoboronexport’s order backlog stood at $35 billion, with the company last year clinching new orders worth around $7 billion. This is somewhat less than in preceding years, and an indication of the aforementioned shrinkage in its client base.

Prior to the demise of its former long-term leader Muammar Gaddafi, Libya alone had been expected to buy about $2 billion worth of equipment, if not for the fall of Muammar Gaddafi’s regime. Besides, over the past few years China has been decreasing its intake of Russian weapons and increasing exports of its own systems, further darkening the future prospects for Rosoboronexport.

The share of aviation products in Rosoboronexport’s deliveries is currently somewhere between 50 and 65 percent. Sukhoi and MiG fighters, along with Mil and Kamov helicopters, remain the best selling items.

Air defense systems come second with 14 percent of the total. Last year Azerbaijan surfaced as a large importer, taking deliveries of Almaz S300PMU2 air defense systems and helicopters. It took fifth place in the customer hierarchy after India (21 percent), Algeria (12 percent), Vietnam (11 percent) and Syria (8 percent).

The Sukhoi Su-30 fighter continues to top the export list in terms of value, with last year’s deliveries totaling 36 aircraft worth $1.69 billion in 2011–equating to about $47 million each. India took 16 aircraft plus 10 kits for local assembly, Algeria and Vietnam received eight each and Uganda four.

Mikoyan designs are second in the export stakes, with its 2011 deliveries valued at $800 million. The lion’s share of these orders came from India, which has continued to take newly built MiG-29K/KUB deck fighters (16 already delivered and 29 more on order), and introduce into service MiG-29s upgraded into the UPG version.

Meanwhile, production of the classic Fulcrum design is about to close down after completion of Myanmar’s order for 24 MiG-29UB/SEs, which is expected this year. Peru and Syria are understood to have completed the upgrade of their Fulcrum fleets, with the latter country also having modernized its older MiG-23MLD interceptors. The country may also take a number of MiG-29M/M2 multirole fighters along with additional Buk antiaircraft systems.

A pair of Ilyushin air lifters went to Jordan last year. India is negotiating to take additional A50 intelligence, surveillance and reconnaissance platforms from the Russian airframer.

Although rumors about circulating about pending export sales of the newest Ka-52 and Mi-28N attack helicopters, these are yet to prove true. But the old-but-gold Mi-24/25/35M rotorcraft are continuing to sell well. Last year Azerbaijan took four Mi-35Ms; Brazil, six; and Peru, two. Myanmar received four used ones from Russian army stocks after repair and refurbishment. Uganda acquired older Mi-24s.

India and Afghanistan have taken delivery of improved Mi-17 transport helicopters with added attack capability. These feature a modern glass cockpits and state-of-the-art night-vision systems, both from Russian providers. Also, the Mi-17 family has been recently exported to Iraq, Azerbaijan, Peru, Indonesia, Thailand, Bangladesh, Kenya, Sudan, Ecuador, Argentina and Poland. Unnamed customers also have received some of the helicopters through UK broker Exclusive Aircraft.

China has taken nine Ka-31 helicopters and hundreds of Russian-built D30KP2 and AL-31F/FN aero engines to power its own aircraft and as replacements for worn-out items on Ilyushin and Sukhoi jets in the inventory of People’s Liberation Army.

The war in Libya stimulated interest in Russian air defense systems. Azerbaijan has taken two squadrons of the S-300PMU-2 Favorite long-range surface-to-air missiles (SAMs). These are rumored to have been built for Iran but were never delivered due to stricter imposed by the international community.

Meanwhile, Syria is understood to have taken delivery of the Buk-M2E medium- and Pantsyr S1 short-range SAMs. Egypt, too, has been taking both brand-new SAMs and upgrading in-service systems.

This year Russia is expected to export further 50 Sukhoi fighters, including 30 kits, to India under the big license production program. On the eve of this year’s Farnborough show Uganda was reported as having accepted the last two airframes in its order for six Su-30MK2s twin-seat multirole fighters. Rosoboronexport won this contract in April 2010 and finalized it a year ago with a reported value of $740 million.

This year’s expectations cover additional MiG-29K/KUB deliveries to India along with more MiG-29UPG upgrades. Quizzed as to why the MiG-35 might have missed out on the recently awarded Indian medium multi-role combat aircraft tender, Isaikin suggested that this may have been because, unlike the winning French Dassault Rafale, it isn’t yet in series production. But he insisted that the Russian fighter, as well as the Mi-28N attack helicopter (which also lost a Indian tender won by Boeing’s Apache), have strong export prospects.