New defense holding formed in Russia without governmental interference

Two Russian companies of the military-industrial complex, Morinformsystema-Agat and Radar MMS are forming a joint concern at their own initiative. As of today the parties already established the core of the concern and continue taking over some more companies-members. In the context of the numerous mergers and transformations in Russia’s defense industry this precedent is especially noteworthy because from the very beginning it was the initiative of the enterprises themselves.

Morinformsystema-Agat is a JSC that had been established on the basis of the enterprises Morinformsystema and Agat, is traditionally specializing on the radio-electronic components for the military manufacturers. Radar MMS is also a well-known Russian brand working in the same niche. The joint structure will deal with the aiming devices for practically all main types of the missiles made in Russia for all armed forces Navy, AF, Army. Together the companies emphasize that they are ready to compete on the edge level technologies in the sphere of complicated integrated electronic systems for missiles, aircraft and ships.

Number one direction is aiming systems for cruise missiles (Uran, Bal, Clubs, X-59, R-500 (Iskander)). The only sphere where the new structure will not be present is air defense. It remains the realm of another defense holding Almaz-Antei. However, even in this niche the parties have limited but fruitful business relations. Morinformsystema-Agat is one of the basic partners of the design bureau Novator, part of Alamz-Antei. It seems that integration processes in the missile industry do not need enforcement from the state structures. Individual companies state that being not in one concern does not mean isolation from each another. The same goes with Tactical Missiles Corporation, KBM (Kolomna), Splav.

This year at the decree of the President of the Russia Federation Vladimir Putin Morinformsystema-Agat took over six more companies it needs to fulfill the program of providing radio-electronic components to the naval turbines: Salyut (Moscow), Topaz (Moscow), Ametist (Moscow), firm Meridian (St. Petersburg), Kometa (Ulyanovsk), Izumrud (Vladivostok). Soon the Dubna based plant, will first merge with Kamchatka Hydro-Physical Institute, after which a single structure will join Morinformsystema-Agat as well.

With all technical and organizational success behind Morinformsystema-Agat is reaching the stage of creating integrated electronic systems encompassing those of surface ships and submarines. Such a system is being made for the latest multi-role submarine Yasen-M now constructed in Severodvinsk. This is one of the developments which are to raise combat opportunities of the Russian Armed Forces on a qualitatively new level by forming an integrated informational field for the commanders.

A separate and very important sector of Radar MMS now and of the joint structure in the future will be ground based and sea based UAVs, first of all helicopter type for the Russian Armed Forces and export. This is a particular contribution of Radar MMS, which intensively works with the informational technologies. UAVs are regarded as an integral part of a complex ensuring a problem-free way of the missile to the target in any environment. Radar MMS promises to suggest original solutions in this sphere shortly, which will drastically change the situation with these technologies. Aiming for the cruise missiles is regarded by the military engineers as a big problem today. This is a problem not only in Russia, but also the Americans and Europeans. In this field Morinformsystema-Agat and Radar MMS develop new UAVs intended for the use not only by the surface ships, but by the subs too. Noteworthy, Radar MMS is one of the few entities on Russia fully certified and licensed for testing UAVs and having the newest experimental base, including flying laboratories.

Patrol aircraft Il-114 equipped with the complex Kasatka is the third direction of the development of the new concern.Probably Morinformsystema-Agat is a debutant with patrol aircraft, but this ambition is based on the huge experience of developing systems of monitoring surface in soviet time. Iceberg-Razrez, Nit are the time proven complexes, which were designed by the enterprises-members before. They are still operated by the Armed Forces. Today Morinformsystema-Agat is ready to propose principally new equipment of the next generation not only for military use, but for ecological monitoring, rescue service etc. This is also based on the former experience. Radar MMS in soviet times participated in creating rescue complex on the basis of Il-76, but then the development was suspended. Now Morinformsystema-Agat resumes this direction.

Formation of Morinformsystema-Agat is also a very peculiar organizational precedent. Different members of the concern, when they were independent companies, were supervised by different departments of the MoD. Now, being parts of a single system, they will be also supervised by different departments of the MoD. At the same time the MoD and the government give a card blanch to integrate economically, technically and organizationally on the corporate level. This is regarded as a sign of the trend of forming single informational field for the Armed Forces. Morinformsystema-Agat deals with the work which assumes collecting information from various sources and providing it to aiming systems.

Morinformsystema-Agat is open to new members. First of all for the enterprises of the so called third level of integration, i.e. the producers of elementary base. Today these companies are also in the process of forming their own integrated structures, but it concerns mainly large companies. At the same time this sector has a lot of mini-plants, which are, nevertheless, playing an important role. Western experience shows that periodically small manufacturers of the elementary base come up with the latest developments, which might be of no importance for the world industry, but vital for certain specific technologies. At the moment Morinformsystema-Agat does not intend to take over such producers, preferring to suggest economically attractive organizational forms of associating small manufactures of the elementary based around the bigger company to ensure the supply of the elementary based from own sources. This is a trend which is now followed not only by Morinformsystema-Agat, but by other big manufacturers.

Appearance of the structures like Morinformsystema-Agat is likely to have an important and positive impact on the development of the Russian radio-electronic complex. Today experts fear that the newly created holdings in aviation, shipbuilding etc might start or already starting to establish so called natural farming, i.e. setting up self sufficient production of all possible components and spares themselves. According to the overwhelming majority of experts this is highly risky temptation at the moment.

For example, there will be 3-4-6 missile holdings. Today it is no secret that making and testing radio-electronic complexes for the missiles takes considerably more time than all works with the missile itself taken together. Therefore it would be totally wrong if each missile maker will have “own” instrument maker. Why to spend time and money on identical systems? The proponents of this idea disclaim the accusations of the lack of competition. According to them competition is good, and there is enough competition with the US and Europe in the world markets. Inside the country national companies are supposed to fulfill national defense order. Russian electronic holdings are ready to compete between themselves, but in other cases they should work together.

Morinformsystema-Agat as well as other specialized manufacturers should meet the demand of both aviation and shipbuilding. And the government must ensure the conditions for a situation when instrument makers would be able to work for different customers in different industries. - Pravda.Ru

Yuri Seleznev

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Author`s name Alex Naumov