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Kalashnikov Group gets more privatization

This article was originally posted on Thefirearmblog.com

What if one supplier stood for 95% of the firearms market in the USA?

That´s the fact in Russia, and the selected company is Kalashnikov.

Concern Kalashnikov simply is the largest Russian manufacturing company, producing assault and sniper rifles, guided artillery projectiles and a wide range of precision weapons. The major part of the civilian products includes hunting shotguns, sporting rifles, various machines, and tools.

The Concern contains three brands: “Kalashnikov” (combat and civilian weapons)”, “Baikal” (hunting and civilian guns), and “Izhmash” (sporting rifles), also the Concern is developing new business lines that include remote weapon stations, unmanned aerial vehicles, and multi-functional special-purpose boats.

At the same time, Kalashnikov group retains and strengthens its position as a leading defense

The Concern is focused on developing the following product lines:

  • Military weapons (including its disposal), service and civilian small arms;
  • High-precision ammunition for the artillery armament;
  • Technological tools to provide operation and repair of the missile artillery and armored force vehicles armament (including means of technical maintenance and repair);
  • Aviation armament and guided missiles;
  • Machines, high-quality tools, and workpieces;

The Concern’s list of the prospective development lines includes:

  • remote weapon stations;
  • unmanned aerial vehicles (The Concern owns 51% of shares in one of the largest manufacturers of UAVs in Russia – Zala Aero)
  • Multi-functional special-purpose boats.

Already back in 2015 Kalashnikov launched a production system development program in 2020.

The program plans to quadruple the labor productivity values, to cut the production costs and the working capital in half, to develop new products and release them to market four times faster.

Last year, 2017, the Kalashnikov group managed to increase its revenue from sales to civilian markets by 57% (compared to 2016), so it seems there is progress with their targets. 

Rostec has now sold some of their share to private interests, as per this Press Release.

The interest of Private Investors in Kalashnikov’s Capital Increased to 75%

With effect from 14 February 2018 the interest of private investors in the capital of Concern Kalashnikov was increased to 75% minus one share. Rostec sold 26% of shares for more than 1.5 billion rubles to Alexey Krivoruchko, the General Director of the Concern Kalashnikov, and his company Transkomplektholding.

The transaction was approved by the government, by the management board and by the supervisory board of the Corporation.

Following the transaction, the Rostec State Corporation reserves the blocking minority interest of 25% plus one share. “This means that the Concern, being a major defense asset, remains in sight of the government and we reserve the right to affect the key processes within the company,” commented Sergey Chemezov, the General Director of the State Corporation.

He also noted that Rostec waits for the investor to perform “further acts aimed at the company’s growth”, and the Corporation today is rather interested in the prospects of such partnership than in the deal itself and the proceeds from the sale of the shareholding interest.

It involves an upgrade of facilities, mastering new production techniques and output of new types of products, as well as the company’s revenue and profitability growth.

Kalashnikov is the largest Russian manufacturer of shooting weapons with a 95% share on the Russian shooting weapons market and 66% in the non-military long guns sector. Kalashnikov products are supplied to more than 27 countries. The Concern owns 51% of shares in one of the largest manufacturers of UAVs in Russia – Zala Aero.

Sources: Rostec.ru and Kalashnikov Media.

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