Aerospace sector opportunities in Russia

1. Sector briefing
Aerospace Opportunities
in Russia
Why Russia?
Aerospace is one of the Russia's highest value
adding manufacturing sectors, with between 275
and 300 aerospace companies, including 108
industrial producers, and 111 R&D and design
bureaus.
The Russian aerospace industry is one of several
key business sectors kept under constant review
and scrutiny by the Russian Government.
5 000 bln roubles (106 bln GBP) (10 times more
than in the last decade) will be allocated from the
federal budget for the aviation sector up to 2020;
470 bln roubles are allocated from the Federal
budget to be spent on civil airport modernization
and the upgrade of the general air traffic system; 11
bln roubles are allocated for transport safety “106 bln GBP will be allocated
systems upgrade and development
from the federal budget for
Find general information on the Russian aviation sector up to 2020 “
market conditions on UKTI’s website. The
Doing Business Guide for Russia gives an
overview of Russia’s economy, business
culture, potential opportunities and an
introduction to other relevant issues.
UK Trade & Investment Sector briefing: Aerospace opportunities in Russia

2. Opportunities  Air traffic control (on ground and in the
The global aerospace industry has been air); free flight technology are
focused on Russia due to the huge growth developing and seek support;
potential in the Russian market as  Re-engineering, virtual production
manufacturers replace and upgrade equipment  Scientific cooperation, UTCs, creating an
international laboratory are enlisted as
and look for modern materials, components,
major goals.
and technologies for their products.
Advanced Composites
Key government organisations
Composite materials including power composite
representing 80% of the Russian
machines are in the focus of Russian Aerospace
Aerospace:
industry representatives’ attention. New
United Aircraft Corporation (UAC), GBP 3.5
projects emerging in the Russian Aerospace
bln *. A holding consisting of the leading
sector envisage the use of advanced composite
Russian aircraft design and manufacturing
materials. UAC has announced a new $100m
companies, focused on the country's aircraft
JV to manufacture composite wing components
output and improving efficiency.
in the city of Kazan, Tatarstan. At the inception
United Engine-building Corporation, GBP 1.5
phase, the JV would import raw materials for
bln** UEC consolidates over 80% assets in
composite components.
Russia’s engine-building sector. Was
established as Oboronprom’s affiliate to control
“Aerocomposite”Ltd., created by UAC, deals
design and manufacturing of series production
with design, testing, manufacturing and
of engines for aerospace, energetic and
realisation of composite parts, aggregates and
transport.
components of civil aircraft. It is currently
Rostekhnologii was established to promote
cooperating with British companies e.g.
the development, production and export of
“Instron”, “SciTech” and is eager to find new
high-tech industrial products. One of its
partners.
aviation assets is Helicopters of Russia
Holding, GBP 1.4 bln *. The managing body of
Sukhoi, one of Russia’s premier aircraft
the consolidated Russian helicopter industry,
designers, is already designing, producing and
incorporates 14 helicopter companies, setting
testing parts and units built from polymer and
new standards of competitiveness, efficiency,
composite materials. The new production line
technology, 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 be
Memorandum of Understanding was signed at
for Sukhoi’s commercial airliner, the SuperJet
the Farnborough International Airshow 2010
100, and Sukhoi’s MS-21 aircraft where
between the United Aircraft Corporation and composite components will account for at least
A|D|S UK. The Russian Association of Aircraft 30-40%.
Engine Manufacturers also signed a similar MoU
with A|D|S. Aerospace is likely to be a NB: Russian industry representatives will also
particularly fruitful sector for collaboration, participate in International Composite
with Russia set to develop Europe’s largest Exchange Programme in March 2011, UK.
aerospace market by 2013.
Aircraft Projects
OPPORTUNITY 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 only
UK Trade & Investment Sector briefing: Aerospace opportunities in Russia

3. • MS-21
A twin-engine medium-range single aisle Ulyanovsk Special Economic Port Zone
passenger 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 to
increasing to 40-45% provided a composite manufacture close to their client or localize in
wing is added in 2015. The project is supported Russia. The Ulyanovsk region ranks 1st in
by numerous international and particularly Russia in civil aircraft manufacturing. Investor
British suppliers and the certification of the support and international cooperation is
aircraft is planned for 2016, so new welcomed now for the new project-creation of
international partners could be engaged. SEPZ.
Benefits for residents:
• Tu 204SM • Exemption from customs duties, VAT
An enhanced reduced-weight version of the Tu- and excise taxes; property tax for 5
204-100, with improved systems. Around 18% years; land tax for 5 years
of the current production Tu-204 is composite • VAT refund for goods/equipment placed
by structural weight, and this will increase to in SEPZ
22-25% 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 UNION
new partners and suppliers of equipment to
assembly and service centers. Russian Aviation Union is an industry
association, which represents corporate
Helicopters interest of the Russian aerospace industry at
Russian Helicopter industry is now focused on all levels of executive and legislative branches
light weight helicopters, as the Russian as well as in various international
helicopter fleet abandons heavy vehicles and organizations. UAC and Russian Helicopters are
lacks the light ones. part of the Union too.
Russian Helicopters is the leading Russian The Aviation Union has 5 functional proactive
full-cycle designer and manufacturer of commitees:
helicopters for civilian and defence markets. - International relationships
The holding actively works with international - Standartization
suppliers and seeks new partners in the - Flight
following 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 our
Russian Helicopters have a number of projects staff overseas in British Embassies, High
like Мi-171М, Ка-32А11BC, Ка-62, Мi-38, Мi- Commissions and Consulates, across all sectors
26Т2, Ansat, Ка-226Т, Мi-34С1 which are in and in over 100 markets.
progress now as well as new-generation Mi-38
utility transport helicopters, production to start You can be alerted to business opportunities on
in 2013. The Mil plant in Moscow is planning to a regular basis by registering on the UKTI
show the second prototype to potential start website. Find out more on UKTI’s business
batch production at the Kazan Helicopter Plant opportunities service on the UKTI website.
in 2013.
UK Trade & Investment Sector briefing: Aerospace opportunities in Russia

4. Major events and activities UKTI contacts
MAKS-2011 Elena Pashina
www.aviasalon.com/en/ Trade & Investment Adviser
Time: August 16-21, 2011 British Embassy Moscow
Tel: +7 495 956 7229
Major Russian Aerospace companies are Email: Elena.Pashina@fco.gov.uk
always represented at international www.ukti.gov.uk
airshows:
Olga Makarchuk
Farnborough (UK) Team Leader
www.farnborough.com British Consulate General
Time: 2012 St.Petersburg
Tel: +7 812 320 3223
Find full details of all events in this Email: olga.makarchuk@fco.gov.uk
country and sector on the UKTI website. www.ukti.gov.uk
New export events are added daily to the site
and you can register to be alerted to them on a
daily, weekly or monthly basis
UKTI’s Tradeshow Access Programme (TAP)
provides grant support for eligible Small &
Medium Sized Enterprises (SME's) to attend
trade shows overseas. Find out more about
UKTI support for attendance at overseas
events
UK Trade & Investment Sector briefing: Aerospace opportunities in Russia

5. Next steps -
How UKTI can help
• Arranging appointments
British companies wishing to develop their
• Organise seminars or other events for
business in the Russian market are advised to you to meet contacts and promote your
undertake as much market research and company in the Russian market
planning as possible in the UK. UKTI’s team in
Russia, with its wide local knowledge and This work is available via our Overseas Market
experience, can provide a range of services to Introduction Service (OMIS) a chargeable
British-based companies wishing to grow their service which assists British-based companies
business 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 you
Whereas 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 & Commonwealth
Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted
as to the standing of any individual, firm, company or other organisation mentioned.
Published 2011 by UK Trade & Investment.
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UK Trade & Investment Sector briefing: Aerospace opportunities in Russia