Tag Archives: Top 100

SIPRI’s List

Always worth looking at SIPRI.  On 31 January, it released its list of the Top 100 arms producers worldwide in 2012 and 2011.

SIPRI observed a small global decline in arms sales over the past two years.  But Russia bucked the trend as “arms sales by Russian companies increased sharply, by 28 per cent in real terms.”

SIPRI provides the context for increased arms production by Russian companies that’s worth quoting in toto:

“Rapid rise in Russia due to domestic procurement plans”

“Russian companies saw a particularly large increase in estimated arms sales in 2012. Of the 6 Russian companies in the Top 100, all except United Aircraft Corporation saw increases in excess of 20 per cent, and Almaz Antei—with a 41 per cent rise—now stands in 14th place in the Top 100, the highest position taken by a Russian company since data became available in 2002.”

“Russian arms companies continue to maintain high export levels, but the increase in estimated arms sales in 2012 mainly reflects large and growing domestic sales, as part of Russia’s $700 billion 2011–20 State Armaments Plan. While there remains widespread scepticism as to whether the aims of the plan can be fully achieved, it is clear that a major increase in Russian military equipment procurement is taking place.”

“‘The Russian arms industry is gradually re-emerging from the ruins of the Soviet industry’, said Dr Sam Perlo-Freeman, Director of SIPRI’s Military Expenditure and Arms Production Programme. ‘Nonetheless, the industry is still plagued by outdated equipment, inefficient organization and widespread corruption, which will continue to limit Russia’s ability to compete technologically with the West.’”

So, it’s not just that Rosoboroneksport’s order portfolio is stuffed full.  But SIPRI sees both good and bad news for Russian defense industry and production.

The top Russian firms on this year’s list are:  Almaz-Antey, UAC or OAK, Vertolety Rossii (Oboronprom), Sukhoy (UAC / OAK), United Enginebuilding Corporation, UEC or ODK (Oboronprom), USC or OSK, and Uralvagonzavod.

Falling off from 2010’s list are Irkut and MiG (UAC / OAK) and the Tactical Missile Weapons (TRV) Corporation.

Some changes may be the result of data collection problems SIPRI faces.

Here’s SIPRI’s data on arms sales by Russia’s top producers.

SIPRI Data on Arms Sales by Top Russian Producers

Pretty interesting stuff.  Strong and stable growth by Almaz-Antey.  Steady growth for UAC / OAK and Sukhoy.  Remarkable growth by Vertolety Rossii — quadrupling its sales in three years.  Ditto for UEB / ODK — nearly quadrupling.  Even Uralvagonzavod doubling its sales over the same period.

Some World-Class Competitors

Despite problems with its state defense order and defense-industrial complex, Russia clearly has world-class defense producers.  This is apparent not just from their arms exports, but it’s also evident in their defense-related revenue.

Eight Russian companies just made the Defense News list of the Top 100 defense corporations worldwide.  They are Almaz-Antey, Helicopters of Russia, Sukhoy, Irkut, United Engine-building, Tactical Missiles, KB Instrument-building, and RTI Sistemy.

With 2010 defense revenue of nearly $4 billion, Almaz-Antey has appeared in the list since 2005 (Antey appeared alone prior to that).  Yet its revenue’s only about half that of Thales, a fourth of EADS, perhaps reflecting that those companies are more diversified in their defense and non-defense business. 

Helicopters of Russia vaulted into the middle of the Top 100 list with 2010 defense revenue of nearly $2 billion (a gain of 134.1% over 2009).  Consolidation of its helo design and manufacturing capabilities seems to have put Russia on the map (or at least on the Top 100).  Still, Helicopters of Russia has about half the defense revenue of Textron, and half as much diversification in its business.  The difference is more pronounced when comparing to United Technologies.

Sukhoy and Irkut need no introduction, but it’s a little surprising that their defense revenue was lower than Helicopters of Russia.

United Engine-building (ODK) is an interesting case.  Not huge defense revenue, but more diversified than other Russian corporations in the Top 100.

A number of Russian companies have fallen out of the Top 100 over the years.  They include submarine and shipbuilders Sevmash, Admiralty Wharves, and Northern Wharf (the United Shipbuilding Corporation — OSK — hasn’t appeared in their place), RSK MiG, Uralvagonzavod, and Aerospace Equipment.  It’s hard to say why they’ve fallen off; it could be their financial reporting — still sketchy at times — has made it hard to evaluate their revenue claims. 

Still, eight Russian companies in the Top 100 is a long way from 1999 when only Rosvooruzheniye (remember it?) made the list.

The Russian firms in the Top 100 are strong weapons and military equipment exporters, but the lesson for them from abroad seems to be that greater diversification and more civilian business makes a defense company more profitable.