Story ID: 
Russia’s powerplant makers showing newfound ambition
By: Nikolai Novichkov
Caption: Russia’s aircraft engine manufacturers are trying to make up ground lost to Western rivals through a comprehensive process of consolidation and restructuri
Word Count: 736
Russia’s aircraft engine manufacturers are trying to make up ground lost to Western rivals through a comprehensive process of consolidation and restructuring. The success of this change will have an impact not just on the companies themselves, but also on the ambitious new aircraft programs being prepared under the auspices of the new United Aircraft Manufacturing Corp. (OAK) for which new-generation engines are required. Another priority is to improve the industry’s patchy record for product and customer support.Today some 40 Russian firms are involved in the aircraft powerplant business, but only about seven of them build complete engines. By some estimates, the leading Western manufacturers sell about 15 times as many engines globally as their Russian counterparts.The industry itself has acknowledged that the engines Russia produces are inferior to those of foreign companies in service life, fuel consumption, noise and emissions. Russian Prime Minister Vladimir Putin has declared that this situation must change, a political impetus that is driving a process of regeneration due to run at least through 2015. Beginning in 2010, Russia’s aircraft engine business is set to receive up to around $280 million in state development funding from a $2.5 billion budget allocation for developing new gas turbines.In late February, a government commission headed by Russia’s deputy prime minister Sergey Ivanov declared that although there is undoubtedly a need to integrate the engine companies, now is not the right time to establish the planned new group called the United Engine Manufacturing Corp. (UEC). Instead, as a first step, the industry is to be restructured around three large groups: MMPP Salyut, Oboronprom and Klimov.By May, the reorganization of Salyut was achieved by merging Omsk-based Baranov OMPO with the Moscow-area Salyut Research and Engineering Center for Gas Turbine Manufacturing. At the same time, the government stakes in NPO Ega Research and Production Association, the Elektropribor Design Bureau, Agat and the NIIT Research Institute of Technologies were merged into the new group. According to Salyut director general Yuri Eliseev, this move has secured the future of Baranov OMPO.In April, Oboronprom’s new combined helicopter group was established by presidential decree and, at the same time, the process of establishing its new engine-making division was started.The government has ordered that Oboronprom establish the new UEC group with itself as the sole shareholder. Eventually, the following joint stock companies will be incorporated into this group: Aviadvigatel, Permskiye Motor Co., Inkar Association for Subsystems Manufacturing, STAR, Kuznetsov Research and Engineering Complex of Samara, Motorostroitel Company, Samara Design Bureau of Machine-Building, Metallist-Samara Co., Volga Aviation Technology Institute and the Saturn Research and Production Association.According to Oboronprom director general Andrey Reus, the Perm Motor-Building Complex is the most successful of Russia’s engine manufacturers. In practice, it is Russia’s sole manufacturer of modern engines for passenger aircraft.This year, the value of Perm’s revenues is projected to reach just under $800 million and is expected to grow by 5 percent next year. The company’s $630 million order book calls for it to produce 100 new PS-90 engines each year, as well as overhaul about the same number. It is also contracted to produce the new PS-90A-76 engine for the Ilyushin Il-76MF military transport ordered by the Russian air force.Over the last five years, Perm’s sales of all types of engines has grown by just over 50 percent. Today, the company is producing 35 times as many engines as it did 10 years ago.As for the third new engine group, under Klimov’s leadership, it will include the Chernyshev Machine-Building Enterprise of Moscow and the Red October joint stock company. At first, the holding company will be attached to the RSK MiG Russian Aircraft Corp.; it will then be transferred to the OAK conglomerate.Current information concerning possible international partnership’s for the Klimov-led group is somewhat contradictory. Denis Manturov, deputy minister for industry and trade, has said Klimov will launch simultaneous production of VK-2500 and TV3-11 helicopter engines in cooperation with Ukraine’s Motor Sich Enterprise. “Today the number of helicopter orders exceeds the manufacturing capabilities of Motor Sich. Therefore we consider it reasonable to have, in Russia, an assured extra quota for production,” he said. At the same time, Chernyshev director general Alexander Novikov has stated that VK-2500 production in Russia will start in 2010 without Ukrainian cooperation. According to Novikov, the Russian facility is actively preparing to put the Klimov-developed engine into production.