| AEROSPACE AND DEFENSE INDUSTRY NEWS DIGEST – UKRAINE, 20 JANURARY 2012 |
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Dear Readers, We welcome you to the New Year with this extended post-holiday edition. And we wish you all a 2012 full of health, happiness, prosperity – and the peace of mind that comes from knowing you are well informed. The Aerospace and Defense Industry News Digest Team HIGHLIGHTS
DEFENSE INDUSTRY NEWS Ukrspecexport had total income of greater than $1 bln in 2011. The company credited the creation of the state defense industry conglomerate UkrOboronProm with contributing to the consolidation of Ukraine’s defense industry and the signing of substantial new export contracts. Despite having slipped out of the SIPRI list of top ten defense exporters in recent years, Russia’s Centre for Analysis of World Arms Trade has included Ukraine in this year’s list of countries with the fastest growing portfolios of defense export orders (alongside Spain, Italy, and France). Ukraine’s parliament has adopted a law writing off 1.8 bln UAH ($225 mln) in debts for state-owned defense industry enterprises. The write-offs includes 248.6 mln UAH ($31.1 mln) in debt to the state budget, 366.1 mln UAH ($45.8 mln) in debt to government special funds, 146.3 mln UAH ($18.4 mln) in debt for utility services, and 1.05 bln UAH ($131 mln) payable on bank loans. In addition, the bill introduces a three-year moratorium on the bankruptcy of state defense industry enterprises. Ukraine’s government has approved a new procedure for using budget funds to implement the State Program for Reform and Development of the Defense-Industrial Complex. Under the new procedure, the state-owned defense industry conglomerate UkrOboronProm will propose allocation of funds to the Ministry of Economic Development and Trade, which will approve the distribution and execute the budget program. The funds will be destined for state-owned enterprises, including Ukroboronprom. NATIONAL SECURITY & DEFENSE POLICY The NATO-Ukraine Joint Working Group on Defense Reform met in Brussels on 13 December 2011 to assess the group’s work for the year and approve plans for 2012. The Ukrainian delegation was led by the First Deputy Secretary of the National Security and Defense Council. INTERNATIONAL CONSULTATIONS AND AGREEMENTS The Ukrainian Parliament has ratified the Implementing Agreement for Phase 2 of the NATO Trust Fund Project for demilitarization of conventional ammunition and small arms and light weapons in Ukraine. The agreement was signed by Ukrainian Cabinet of Ministers and NATO on 21 September 2011 in Brussels. Under the agreement 88% of the program will be financed by NATO and 12% by Ukraine. The NATO share is EUR 24.9 mln; 48 mln UAH (EUR 4.8 mln) is from Ukrainian side. Ukraine and Belarus have declared their intention to establish a Ukrainian-Belarusian center for cooperation on research and innovation. The purpose of the center will be to promote effective mechanisms for Ukraine-Belarus scientific cooperation, the development of new high technologies and the implementation of joint programs and projects. Areas for work are expected to include remote Earth-sensing technologies, calibration sites for remote sensing satellites, development of a new generation of mini- and micro-satellites, and the testing of new materials for space applications. The Kingdom of Saudi Arabia has once again emphasized its developing interest in military-technical cooperation with Ukraine. The comments were made by the Saudi Defense Minister, Salman bin Abdul-Aziz Al Saud, during a visit by the Ukrainian Foreign Minister to Saudi Arabia. The first joint meeting of the Ukrainian-Korean intergovernmental Committee on Trade and Economic Cooperation took place in Seoul in December 2011. The two countries signed an agreement on the creation of the Joint Ukrainian-Korean Committee on Cooperation in the use of space for peaceful purposes. The joint committee will maintain a regular dialogue on key issues of Ukrainian-Korean relations in the space sector. OPERATIONS, EXERCISES, TRAINING, FORCE DEVELOPMENT Ukraine has completed its efforts in the NATO Training Mission (NTM) in Iraq, which the Alliance concluded on 12 December 2011. More than fifty Ukrainian offices participated in the NTM-Iraq since its inception in 2006. Nine Ukrainians were on the NTM staff at its conclusion. A presidential decree has authorized the deployment of up to 200 Ukrainian peacekeepers to the UN Mission in the Democratic Republic of Congo. The contingent is expected to include four Mi-24 combat helicopters and up to 43 armored vehicles. The first contingent of Ukrainian forces has completed preparations and is ready for deployment. Operational cooperation was high on the agenda of talks between the Polish and Ukrainian defense ministers in mid-December 2011. These include discussion of a bilateral tactical group for EU operations and the creation of a Lithuanian-Polish-Ukrainian brigade. Agreements on the creation of the brigade are expected to be signed in the first quarter of 2012. Russia’s Chief of the Armed Forces General Staff has announced that Ukraine and Russia will create a joint engineering battalion. The announcement was made during an official vision to Ukraine at the end of 2011. Ukraine’s Armed Forces has adopted a stationary aircraft simulator for L-39 jet trainer aircraft. The simulator is expected to increase the effectiveness of training for pilots in flight schools and combatant units, as well as reduce the expenditure of flight hour resources and maintenance costs associated with training flights. AIRCRAFT Ukraine’s Motor Sich has bought 60% of the shares of Belarus’s Orsha Aircraft Repair Plant. 39% of the plant’s shares were bought by Belarus’s Innovation and Investment Systems. The investors plan to produce and modernize Mi-8 helicopters at the plant, and are obliged to provide $12 mln in financial aid and create 300 working places in 2012-2016. On 27 December 2011, Ukraine supplied a second An-32 military-transport aircraft to Iraq, with the official ceremony taking place at Antonov’s Gostomel airfield (Kyiv region). Dmytro Salamatin, Director General of UkrOboronProm, indicated tha tUkraine and Iraq plan to sign more contracts in the nearest future. The state-owned “OdesaAviaRemService” [Odessa Aircraft Repair Plant] has supplied two more L-39M1 jet trainer aircraft to the Ukrainian Air Force, working in cooperation with JSC Motor Sich and the “Progress” machine-building design bureau. The L-39M1 aircraft, produced on the basis of the Czech-made L-39C jet trainer, is equipped with a new AI-25TLSh engine that increases the aircraft’s thrust by 10%. The L-39M1 is also equipped with a new engine control system and updated avionics. The modernized version of the Мі-8МТV helicopter, equipped with a new Motor Sich engine, is currently undergoing testing by state authorities. Experts expect the Mi-8MTV to beat the world record on a maximum loaded service ceiling of an Mi-8 helicopter and achieve a maximum altitude of 9000 meters. The first deliveries to the Ukrainian Armed Forces are expected in 2012. State tests of Mi-24P upgraded attack helicopter are currently taking place in Crimea. By the end of 2011, 12 flights had been made, totaling 15 flight hours and including 20 tests of combat equipment at the Chauda Scientific and Test Center. Ordinance launched during those tests includes ten 250-kg high-explosive bombs, 200 air-to-ground rockets, and more than 300 shells. The “Progress” machine-building design bureau has announced that total operating time of D-436-148 engines installed on An-148 regional jet aircraft and An-158 regional jet aircraft has now passed 70 thousand hours for 38 thousand flight cycles. During this time, the indicators of the D-436-148 engine’s reliability have fully meet or exceed standards. Russia’s Polit Airlines expect to receive 5 or 6 An-148-100E regional aircraft in 2012. The airline company already uses two of the aircraft, and a third is expected in February 2012. The total order for Polet Airlines is ten An-148-100E aircrafts. SATELLITES & LAUNCH VEHICLES Ukraine’s Sich-2 remote sensing satellite has passed all scheduled tests and is now working in its normal operating mode. The Sich-2 was launched into orbit on 17 August 2011 by the Ukrainian-Russian Dnipro carrier rocket. The satellite will provide data to monitor emergency situations and support national defense, monitor ecological conditions and land use, and support agriculture, forestry and water management. The European Space Agency (ESA) will test the Vega carrier rocket in early 2012. The Vega project includes enterprises of the State Space Agency of Ukraine, which developed and manufactured the engine for the fourth stage of the rocket. The Ukrainian enterprises have already been contracted to supply five sets of engines for the Vega, of which two have been delivered. AzovZagalMash (Mariupol, Donetsk region) has produced its first equipment set for the Cyclone-4 project, to be used in the installation of storage tanks at Brazil’s Alcântara Space Centre as well as for fuel system servicing and the collection and neutralization of industrial wastewater. A pilot network of ground stations for highly accurate determination of coordinates using global navigation satellite systems has been deployed in Ukraine. The new system allows the determination of locations within centimeters, and will be used in building construction, laying pipeline infrastructure, and monitoring land movement. Six research stations are working in Kiev and the Kiev region now, covering an area of 25 thousand km. The network is planned to be extended to a total of 40 stations. The project is implemented by a JV System Solutions, created by the Ukrainian Systema company, working together with the Swiss Leica Geosystems Company. NAVY JSC Feodosiya Shipbuilding Company “Morye” has won a tender to build a high-speed ship, the Coral, for the Ukrainian Maritime Border Guard. The tender, worth 235 mln UAH ($29.4 mln), calls for the ship to be completed in 2012. Zorya-Mashproekt (Mykolayiv) announced that it has surpassed its 2011 financial plan by 4%. The company’s sales grew by 11 % in 2011, as compared to 2010 sales, with over 95% of sales to foreign customers. This included the export to India, Russia, China and Vietnam of gas turbines for military vessels. ARMOR The Malyshev Plant (Kharkiv) announced plans for a ten-fold increase in production in 2012, due to the implementation of international contracts for a supply of BTR-4 APC to Iraq, Oplot battle tanks to Thailand, and OT-62 Topaz APC Egypt. Regarding specific projects:
The AvtoKrAZ holding company (Kremenchug, Poltava region) has announced that it produced 1071 vehicles in 2011, for a growth of 107% in production, and sold 1263 vehicles to consumers. Of these, 740 vehicles were sold to Russia, 39 to Kazakhstan, 34 to Azerbaijan, 26 to Uzbekistan-26, and 15 to Turkmenistan. In 2011 the company also started cooperation with the Philippines and Rwanda, including the sale of KrAZ-65101 trucks for fire services and KrAZ-65053 trucks with hydraulic manipulators to Rwanda. AvtoKrAZ also renewed supplies to Macedonia and Thailand. In 2012 AvtoKrAZ plans to sell 2.5 - 3 thousand vehicles. UkrOboronProm has ordered the dismissal of Oleksandr Shvets as CEO of the Mykolayiv Mechanical Repair Plant, due to the unsatisfactory state of the Plant. Oleg Shklyarov has been named acting director and ordered to present a development plan for the plant by 20 January. UkrOboronProm is reportedly considering transferring a portion of export contracts to the plant. MISSILES Companies within the UkrOboronProm state defense industry conglomerate and the State Space Agency of Ukraine plan testing of the Sapsan Multifunctional Missile complex beginning in 2015. The Ministry of Defense Industry of Azerbaijan is currently negotiating with the state-owned Kyiv Design Bureau “Luch” on the possible joint production of Skifand Barrier anti-tank guided missile systems. The systems are expected to be used for new and modernized armored vehicles for the Azerbaijani Army. RADARS AND SENSORS The Ukrainian Armed Forces has received the new P-18 Malachite ground based radar system for monitoring air and surface situation with digital processing of information. The radar system is produced by the UkrSpecTekhnika holding company. © 2011 Effective Engagement Strategies, LLC ======================================= If there are any specific issues or questions regarding topics of this digest, please feel free to contact: Lada Pastushak, Director of Operations & Development, |
