Tag Archives: Almaz-Antey

More S-400s

On 2 September, TASS reported Almaz-Antey delivered its ninth “regimental set” of S-400 / Triumf SAMs “ahead of schedule.”  The agency cited General Director Jan Novikov who claimed his company will send two more “sets” to the military before next year.  They will be numbers ten and eleven.

But those late year deliveries have a way of sliding to the right.

S-400s on Display (photo: ITAR-TASS / Sergey Bobylev)

S-400s on Display (photo: ITAR-TASS / Sergey Bobylev)

Novikov said the most recent “set” wasn’t due until November under the delivery plan.  He indicated the S-400s and associated equipment were sent to the “test range” — Kapustin Yar — where all “delivery-handover tests” were conducted successfully.

Writing for RG, Yuriy Gavrilov reports that, to meet the demand for the S-400 and S-500, Almaz-Antey has a robotic microelectronics production line for SAMs in Omsk.  This week the firm is also supposed to open a robotic lathe and milling line at the same facility.  Novikov reportedly said it will increase productivity in priority areas by a factor of 12.

Gavrilov writes that the new “set” is bound for Moscow.  It will make a fifth red pin in a blob of four currently around the capital.  Twelve “sets” are supposed to defend the skies of the “central administrative and industrial region” by 2020.

Russia's S-400 Deployments

Russia’s S-400 Deployments

That count of nine S-400 “regimental sets” is intriguing.  

By last year’s information, this should be ten, with the delivery to Kamchatka being the ninth.  But apparently not.  So which of the nine red pins is wrong (if any)?  It might be Novocherkassk, but some recent sources place this “regimental set” at Novorossiysk. Which begs its own question:  will the Defense Ministry shift them to Sevastopol eventually?

Also, there’s no indication yet of where “sets” ten and eleven (or eleven and twelve?) could go.

How do the overall numbers look?  If the fifth “set” for Moscow is actually the ninth overall, we’d expect a total of 19 regimental sets (based on General-Major Demin’s September 2014 statement that 12 more would be deployed).  If it’s actually the tenth, then a total of 20.

Both possibilities get close to the 56 S-400 battalions projected under the GPV. If all “sets” after Kamchatka have three battalions, they might get between 50 and 52 battalions.

World-Class Competitors

Defense News has posted its annual list of the world’s top 100 defense companies for 2012.

The same seven Russian firms appear on the list.  But against the backdrop of a declining international defense market, the performance of Russian companies last year is interesting.

They did fairly well, except for airplane makers.

Almaz-Antey’s reported defense revenue rebounded strongly in 2012 – by 62 percent — to make it 14 overall.  It moved up from 21 last year.

Helicopters of Russia’s revenue jumped 32 percent to put it at 24.  It was 44 last year.

Sukhoy’s revenue was down 8 percent.  But down less than others.  With the market declining,  it came in 43rd, up from 52nd last year.

United Engine-building’s revenue increased nearly 50 percent to make it number 49, up from 55.

Irkut’s revenue and position declined, more than 18 percent to make it 62 versus 53 a year ago.

RTI Sistemy reported a 12 percent gain to be 80th instead of 100th last year.

RSK MiG was down 17 percent and came in at 93rd.

Here are the posts on 2011 and 2010.

What’s It Cost?



A reader recently asked:

What’s the cost of one division of the S-400 for Russia and for foreign customers?

Let’s call it a battalion (дивизион).  We’ll start with exports (for which there is actually data).  And we proceed from what was paid for the S-300.

Russia’s planned sale of the S-300PMU1 to Iran reportedly involved the transfer of five “battalion sets” for $800 million.  Some sources said as much as $1-1.2 billion.   

Let’s guess the “battalion set” has three firing batteries, with two launchers per, for a total of 30 TELs, 120+ missiles, and all associated radars, fire control systems, and vehicles.

If $800 million is accurate, the price for one battalion was $160 million.  The price for one S-400 system, four missiles on a TEL, was roughly $27 million.

This isn’t unlike what the Chinese paid for the S-300 in the 1990s and 2000s.  According to Sinodefence.com, they bought battalions for between $25 and $60 million at different times under different contracts.

That done, we make the leap from the S-300 price to the S-400 price.

A couple years ago, Vedomosti drew the scarcely precise conclusion that the price of the S-400 will double the S-300’s price (and the S-500 double the S-400’s). 

So perhaps a “battalion set” or a battalion of the S-400 will go for $320 million.  That would be one full-up launch vehicle for $40-50 million.

The only other shred of information is the widely-reported Financial Times story saying, if the Russians added the S-400 to a $2 billion arms deal with Saudi Arabia, the price of the sale would climb to $7 billion.  But lots of Russian reports say Moscow won’t be selling the S-400 abroad soon.  The military obviously hopes that’s true, so it can get first.

But not every customer is Iranian, not every one will have to pay a premium price, and not every customer is foreign.

Which brings the trickier question of what Russia’s Defense Ministry has to pay.  It’s simply impossible to guess.

Certainly a lot less than buyers abroad.  The military’s bought some S-400 systems so there is a going price.  OAO Concern PVO Almaz-Antey’s costs are a big question as is the level of profit the government is willing to tolerate.  

The government owns Almaz-Antey, so one part of government is selling to another.  It’s a prime example of angst over GOZ “price formation” in recent years.  There was a similar big-ticket dustup over submarine prices with Sevmash.  It’s something of a Mexican standoff.  The buyer doesn’t have other supplier alternatives.  And the seller may not be allowed to sell elsewhere. 

The Defense Ministry, the government don’t want to pay a lot and have the power to refuse and yet still receive goods.  The question is how many.  That’s ECON 101, friends.

If those buyers set their price below equilibrium, Almaz-Antey will provide a lower than desired quantity more slowly than the buyers want.   And Almaz might have other buyers as an option, an advantage Sevmash lacks.  So “price formation” for the S-400 is all about agreement on Almaz’s costs and an acceptable level of profit.  That agreement is apparently not smoothly worked out yet.

Those Air Defense Missile Factories

S-300 Launch Canister? (photo: Izvestiya)

S-300 Launch Canister? (photo: Izvestiya)

OK, a lot gets under the radar . . . hadn’t noticed interesting reports since August by Izvestiya’s Aleksey Mikhaylov.

Sue me.

The latest is Mikhaylov’s informative update on two Almaz-Antey factories planned to crank out missiles for the S-400 Triumf and S-500 Prometey.

His OPK source says:

  • By 2014, large factories in Kirov and Nizhniy Novgorod are supposed to manufacture hypersonic 77N6-N and 77N6-N1 missiles for the S-400 and S-500.
  • The missiles will have inert, kinetic kill warheads, and supposedly be capable of intercepting ballistic targets at 7 km/s.
  • The Kirov factory will cost 41.6 billion rubles, the one in Nizhniy 39.5 (81.1  together).  Almaz will get a credit of 25 billion from VEB; the Defense Ministry will invest 35 billion.  One wonders where the balance comes from, and what the terms of this three-way partnership are.

Almaz greatly needs a new production base to field missiles for its SAM launchers.  It was planned in 2008, but the financial crisis prevented it.  The military doesn’t want to repeat the S-400 experience.  It remains armed with older, shorter-range 48N6 and 9M96 missiles.  Since 2007 only seven battalions (3 and 1/2 “regimental sets”) of the S-400 (out of 56 planned) have been fielded.

New missile production should coincide with serial production of the S-500 system (not later than 2014).  It remains under development.  However, Mikhaylov reports rumored sightings of  Prometey prototypes at this or that test range.

Over time, various officers and officials have claimed new, long-range missiles for the S-400 would be fielded in 2013, 2014, or 2015.

By way of conclusion, Mikhaylov turns to independent defense analyst Aleksandr Konovalov to comment:

“The country’s leadership looks at the defense sector like a Coke machine.  Put money in and get a bottle.  Nothing is that simple with the domestic OPK, and investing a lot of money doesn’t guarantee getting production precisely on time.  And discussion about the S-500 is questionable, it’s possible it doesn’t even exist in drawings.”

Update on World-Class Competitors

By way of follow-up on a previous post, Defense News’ list of the top 100 defense industrial producers for 2011 is out.  No change in Russian companies except for some changes of position on the list.

Sukhoy, Helicopters of Russia, and RTI moved up the list with increased revenue over 2010.  Almaz-Antey, Irkut, and United Engine-building slipped down.  RSK MiG hasn’t reported 2011 data.

Here’s last year’s post.

Makarov Reports to Public Chamber

Makarov Briefs the Public Chamber

According to Mil.ru, General Staff Chief, Army General Nikolay Makarov reported to the Public Chamber today as part of its hearings on “The New Profile of the Russian Army:  Results, Problems, Prospects.”  Here’s a sampling of what he discussed.

According to ITAR-TASS, Makarov said there are 186,400 contract servicemen today, and there will be 425,000 in 2016.  Recruiters will work throughout Russia starting next year.  Prospective contractees will train for three months before signing contracts.  Minimum pay will be 23,000 rubles.  Makarov said 2012 will be a test year, and from 2013, 50,000 contractees will be signed up each year.

RIA Novosti printed Makarov’s stark assessment of Russia’s conscript manpower.  The General Staff Chief said, of all men liable to conscription, only 11.7 percent can be called up, and 60 percent of them are excluded for health reasons.  So, he concludes:

“Therefore we are practically faced with the fact that there is almost no one to callup into the Armed Forces.”

He said Russia’s current mobilization reserve consists of 700,000 ex-conscripts. 

Makarov suggested increasing the prestige of military service through a veteran’s preference system.  Former soldiers and officers would enjoy a priority in hiring for government service, according to RIA Novosti.

ITAR-TASS quoted Makarov on cuts in military command and control organs.  He indicated they’ve been cut by a factor of four — from 51,000 to 13,435 personnel, and this process continues.  One-third of C2 organs were disbanded, and the rest reduced in size several times. 

He indicated that, when the Defense Ministry’s central apparatus numbered 51,000, it occupied more than 20 buildings in Moscow.  The apparat is now in a single building.  Other buildings were sold off.  But Makarov assured his audience the effectiveness of C2 hasn’t declined because of the reductions.

Regarding the new pay system for officers, RIA Novosti wrote that Makarov said higher pay basically implements the old Order No. 400 on premium pay, but officers will still have the chance to receive extra “stimulus” pay under the new system.

ITAR-TASS printed Makarov’s figures on efforts to get rid of old ammunition.  According to the General Staff Chief, at the start of the year, Russia had 119.5 million tons of old munitions to destroy, but now only 7 million.  Less than one percent could be dismantled; the vast majority had to be blown up.  Makarov indicated the number of ammunition storage sites will drop from 161 at present to about 30.

Makarov defended his past criticism of domestic weapons and equipment by giving more examples where foreign systems are superior to Russian ones (i.e. tanks, MLRS, satellites), according to ITAR-TASS.  The general argued for increasing the range and service life of systems as well as providing better protection for soldiers operating them.

RIA Novosti reported Makarov intends to continue pushing for lower prices on arms and equipment the military’s buying.  He intimated there will be a “specialized department” for negotiating with producers.  He claimed shipbuilding contracts with OSK were concluded on the Defense Ministry’s terms.  He added that the military has given Almaz-Antey two years to build two new factories to produce the S-500, according to RIA Novosti.

ITAR-TASS relayed Makarov’s remarks on Russia’s airfields.  Makarov indicated Russia has cut from 357 military airfields down to 26 that he describes as meeting world standards.  Russia has eight air bases. 

He said pilot flight hours are at 90 per year.  He said it’s planned to increase them to 130 next year, and then to 220 at some point.

ITAR-TASS and RIA Novosti carried the General Staff Chief’s comments about threats on Russia’s borders: 

“Under certain conditions, local and regional conflicts can grow into mass ones with the employment of nuclear weapons.”

“The conflict which could occur in connection with the withdrawal of American troops [from Afghanistan] could lead to a local, regional and even large-scale one.  And we have to be ready for it.”

Passion for the S-300PS

Friday’s Nezavisimoye voyennoye obozreniye editorial assures readers the end of S-300PS production — combined with a lack of contracts for the S-400 — won’t bring the apocalypse or, at least, a threat to Russia’s administrative and industrial heartland.

Like others, NVO is wrestling with the meaning of former Almaz-Antey General Director Igor Ashurbeyli’s most recent words.

Despite the sturm und drang over the S-300’s demise elsewhere in the media, NVO takes the rational tack.  There’s nothing new in Ashurbeyli’s statements.  Everything’s normal, it says.  Almaz-Antey could have upgraded the S-300P Favorit forever, but proposed S-500 development instead.  It’s natural and sensible to draw S-300 production down to a close.

And, after all, the S-400 is entering service, and the Vityaz and S-500 are in development.  The medium-range Vityaz will replace the S-300PS.  Morfey’s in development for short-range protection of the most important targets.  And Ashurbeyli says “it’s proposed” that the S-500 will be complete in 2015.

Here, NVO’s editors shift to a less optimistic, perhaps a more realistic tack:

“It’s true, we all know that in our country it’s always a great distance from plans to their fulfillment.  In that great distance, sometimes not just ruts and potholes arise, but even chasms.  Here not everything with full-blooded use of the S-400 system is clear and obvious.  According to the reports of both Ashurbeyli and the VVS CINC General Zelin, there are big problems with the long-range missile, and also at Moscow factory “Avangard,” where this serial production goes on, according to media accounts, there are no orders for it.  It could be because it’s not in shape.  And the “400,” on which great hopes rest today, as a transitional system from the S-300PS to Vityaz and the S-500, doesn’t justify these expectations?  It isn’t excluded that it’s for exactly this reason that the Defense Ministry no longer wants to order it?  Why spend money and buy something that doesn’t meet the tactical-technical requirements which the customers laid down for the system?  Here the generals wouldn’t lack common sense.”

But, says NVO, they could go forward with the S-400’s short- and medium-range missiles, couldn’t they?  Delays in the S-400 contract threaten to cause failures in establishing the country’s defenses.

With a two-year production cycle, and no contracts in 2011, it’s naive to expect the appearance of new systems in 2013, according to NVO’s editors.  What’s more, there’s no absolute certainty that Vityaz and Morfey will succeed in this time frame, or that some kind of real basis for developing the S-500 will be laid.

NVO concludes:

“And so here passions for the “300” are understandable.  But it’s only desired that they shouldn’t take on an alarmist character.  It isn’t necessary to frighten anyone.”