Aerospace Opportunities In Russia July2011


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Aerospace Opportunities In Russia July2011

  1. 1. Sector briefingAerospace Opportunitiesin RussiaWhy Russia?Aerospace is one of the Russias highest valueadding manufacturing sectors, with between 275and 300 aerospace companies, including 108industrial producers, and 111 R&D and designbureaus.The Russian aerospace industry is one of severalkey business sectors kept under constant reviewand scrutiny by the Russian Government.5 000 bln roubles (106 bln GBP) (10 times morethan in the last decade) will be allocated from thefederal budget for the aviation sector up to 2020;470 bln roubles are allocated from the Federalbudget to be spent on civil airport modernizationand the upgrade of the general air traffic system; 11bln roubles are allocated for transport safety “106 bln GBP will be allocatedsystems upgrade and development from the federal budget forFind general information on the Russian aviation sector up to 2020 “market conditions on UKTI’s website. TheDoing Business Guide for Russia gives anoverview of Russia’s economy, businessculture, potential opportunities and anintroduction to other relevant issues.UK Trade & Investment Sector briefing: Aerospace opportunities in Russia
  2. 2. Opportunities  Air traffic control (on ground and in theThe global aerospace industry has been air); free flight technology arefocused on Russia due to the huge growth developing and seek support;potential in the Russian market as  Re-engineering, virtual productionmanufacturers replace and upgrade equipment  Scientific cooperation, UTCs, creating an international laboratory are enlisted asand look for modern materials, components, major goals.and technologies for their products. Advanced CompositesKey government organisations Composite materials including power compositerepresenting 80% of the Russian machines are in the focus of Russian AerospaceAerospace: industry representatives’ attention. NewUnited Aircraft Corporation (UAC), GBP 3.5 projects emerging in the Russian Aerospacebln *. A holding consisting of the leading sector envisage the use of advanced compositeRussian aircraft design and manufacturing materials. UAC has announced a new $100mcompanies, focused on the countrys aircraft JV to manufacture composite wing componentsoutput and improving efficiency. in the city of Kazan, Tatarstan. At the inceptionUnited Engine-building Corporation, GBP 1.5 phase, the JV would import raw materials forbln** UEC consolidates over 80% assets in composite components.Russia’s engine-building sector. Wasestablished as Oboronprom’s affiliate to control “Aerocomposite”Ltd., created by UAC, dealsdesign and manufacturing of series production with design, testing, manufacturing andof engines for aerospace, energetic and realisation of composite parts, aggregates andtransport. components of civil aircraft. It is currentlyRostekhnologii was established to promote cooperating with British companies e.g.the development, production and export of “Instron”, “SciTech” and is eager to find newhigh-tech industrial products. One of its partners.aviation assets is Helicopters of RussiaHolding, GBP 1.4 bln *. The managing body of Sukhoi, one of Russia’s premier aircraftthe consolidated Russian helicopter industry, designers, is already designing, producing andincorporates 14 helicopter companies, setting testing parts and units built from polymer andnew standards of competitiveness, efficiency, composite materials. The new production linetechnology, and profitability. will be set up at Kazan’s Gorbunov KAPO aircraft-building factory. Initial production,Cooperation with the UK scheduled to begin in the Q1 of 2013, will beMemorandum of Understanding was signed at for Sukhoi’s commercial airliner, the SuperJetthe Farnborough International Airshow 2010 100, and Sukhoi’s MS-21 aircraft wherebetween the United Aircraft Corporation and composite components will account for at leastA|D|S UK. The Russian Association of Aircraft 30-40%.Engine Manufacturers also signed a similar MoUwith A|D|S. Aerospace is likely to be a NB: Russian industry representatives will alsoparticularly fruitful sector for collaboration, participate in International Compositewith Russia set to develop Europe’s largest Exchange Programme in March 2011, UK.aerospace market by 2013. Aircraft ProjectsOPPORTUNITY AREAS IN TRADE A number of indigenous aircraft programmes are underway or being planned that present  Russian aerospace industry is now opportunities for companies with contract focused on new sources of energy for research and/or consultancy capabilities - SSJ aviation (chemical energy generators) 100; MS-21; Tu-204 SM. and alternative fuel; • SSJ-100  Flight safety (global system of aircraft A medium-haul passenger aircraft. Production monitoring) is of primary concern and a version first flight was made in November subject for conferences and round 2010. tables. On 21 April 2011, Sukhoi Superjet 100 performed its first commercial flight in “Armavia” fleet.* During the past month the aircraft has made Revenue in 2010 66 flights in total.** Revenue in 2008 available onlyUK Trade & Investment Sector briefing: Aerospace opportunities in Russia
  3. 3. • MS-21A twin-engine medium-range single aisle Ulyanovsk Special Economic Port Zonepassenger jetliner. The initial design is to Creation of Special Economic Port Zone (SEPZ)include 33% of composite materials, can be of interest for companies who wish toincreasing to 40-45% provided a composite manufacture close to their client or localize inwing is added in 2015. The project is supported Russia. The Ulyanovsk region ranks 1st inby numerous international and particularly Russia in civil aircraft manufacturing. InvestorBritish suppliers and the certification of the support and international cooperation isaircraft is planned for 2016, so new welcomed now for the new project-creation ofinternational partners could be engaged. SEPZ. Benefits for residents: • Tu 204SM • Exemption from customs duties, VATAn enhanced reduced-weight version of the Tu- and excise taxes; property tax for 5204-100, with improved systems. Around 18% years; land tax for 5 yearsof the current production Tu-204 is composite • VAT refund for goods/equipment placedby structural weight, and this will increase to in SEPZ22-25% on the revised design. • Profit tax rate reduction to 15.5%Deliveries are scheduled to start in 2011.For now Tupolev is ready to cooperate with RUSSIAN AVIATION UNIONnew partners and suppliers of equipment toassembly and service centers. Russian Aviation Union is an industry association, which represents corporateHelicopters interest of the Russian aerospace industry atRussian Helicopter industry is now focused on all levels of executive and legislative brancheslight weight helicopters, as the Russian as well as in various internationalhelicopter fleet abandons heavy vehicles and organizations. UAC and Russian Helicopters arelacks the light ones. part of the Union too.Russian Helicopters is the leading Russian The Aviation Union has 5 functional proactivefull-cycle designer and manufacturer of commitees:helicopters for civilian and defence markets. - International relationshipsThe holding actively works with international - Standartizationsuppliers and seeks new partners in the - Flightfollowing areas: - Supply chain control - Scientific research, R&D - Safety, medical, search and rescue and Russian Aviation Union deals with all major fire protection equipment for helicopters Aerospace events and in focused on - Avionics cooperation with international partenrs. UKTI - Navigation and connection systems have a working relationship with the Union. - Flight safety - External equipment If you have any questions on the opportunities - Helicopter market analysis and above, contact the UKTI contacts named in this specialized Mass Media report. Business opportunities aimed - Helicopter building theory specifically at UK companies are added daily to UKTI’s website. These leads are sourced by ourRussian Helicopters have a number of projects staff overseas in British Embassies, Highlike Мi-171М, Ка-32А11BC, Ка-62, Мi-38, Мi- Commissions and Consulates, across all sectors26Т2, Ansat, Ка-226Т, Мi-34С1 which are in and in over 100 markets.progress now as well as new-generation Mi-38utility transport helicopters, production to start You can be alerted to business opportunities onin 2013. The Mil plant in Moscow is planning to a regular basis by registering on the UKTIshow the second prototype to potential start website. Find out more on UKTI’s businessbatch production at the Kazan Helicopter Plant opportunities service on the UKTI 2013.UK Trade & Investment Sector briefing: Aerospace opportunities in Russia
  4. 4. Major events and activities UKTI contactsMAKS-2011 Elena Trade & Investment AdviserTime: August 16-21, 2011 British Embassy Moscow Tel: +7 495 956 7229Major Russian Aerospace companies are Email: represented at international Olga MakarchukFarnborough (UK) Team British Consulate GeneralTime: 2012 St.Petersburg Tel: +7 812 320 3223Find full details of all events in this Email: and sector on the UKTI website. export events are added daily to the siteand you can register to be alerted to them on adaily, weekly or monthly basisUKTI’s Tradeshow Access Programme (TAP)provides grant support for eligible Small &Medium Sized Enterprises (SMEs) to attendtrade shows overseas. Find out more aboutUKTI support for attendance at overseaseventsUK Trade & Investment Sector briefing: Aerospace opportunities in Russia
  5. 5. Next steps -How UKTI can help • Arranging appointmentsBritish companies wishing to develop their • Organise seminars or other events forbusiness in the Russian market are advised to you to meet contacts and promote yourundertake as much market research and company in the Russian marketplanning as possible in the UK. UKTI’s team inRussia, with its wide local knowledge and This work is available via our Overseas Marketexperience, can provide a range of services to Introduction Service (OMIS) a chargeableBritish-based companies wishing to grow their service which assists British-based companiesbusiness in global markets. wishing to enter or expand their business in overseas markets.This can include: • Provision of market information To find out more about commissioning this • Validated lists of agents/distributors work, or accessing other UKTI services and • Key market players or potential specialist advice, please visit the UKTI website customers in the Russian market to find contact details for your local UKTI • Establishment of interest of such office. contacts in working with youWhereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade &Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & CommonwealthOffice), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility acceptedas to the standing of any individual, firm, company or other organisation mentioned.Published 2011 by UK Trade & Investment.Crown Copyright ©You may reuse this information (not including logos, images and case studies) free of charge in any format or medium, underthe terms of the Open Government Licence. To view this licence, visit or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or publication is also available from our website at or for more information please telephone +44 (0)207215 8000.UK Trade & Investment Sector briefing: Aerospace opportunities in Russia