Rostec and Vnesheconombank establish a conversion agency
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Rostec and Vnesheconombank establish a conversion agency

 

Rostec State Corporation and Vnesheconombank signed an agreement on establishing a joint venture, NPO Konversiya, which is to ensure transfer of technologies and products of the enterprises of the military-industrial complex to civilian segments and promotion of high-tech civilian products on the domestic market. The agreement was signed on the sidelines of the St. Petersburg International Economic Forum by Rostec's CEO Sergey Chemezov and the Chairman of Vnesheconombank  Sergey Gorkov.

 

NPO Konversiya is established in accordance with the Order of Russian President Vladimir Putin for conversion of the enterprises of the military-industrial complex due to completion of the main phase of rearmament of National Defense Forces of the Russian Federation and a gradual decrease in state defense procurement after 2018. The Russian Ministry of Industry and Trade (Minpromtorg) and Vnesheconombank are responsible for conversion as a regulator and a state development institution respectively.

 

Minpromtorg has developed a road map. In accordance with it, a commercial organization for promoting civilian products of the enterprises of the military-industrial complex on the domestic and foreign market was to be established before May 30, 2017. As a result, JSC NPO Konversiya was established on the basis of Rostec's subsidiary LLC National Center of Informatization (NCI) and JSC Federal Project Finance Center (FPFC).

 

The key functions of the joint venture will include determining market demand and finding opportunities for promoting and selling products of the enterprises of the military-industrial complex, ensuring their analysis, providing assistance in seeking funding for conversion projects and implementation of ecosystem projects, such as "Smart City" "Electronic Health Care", "Industrial Internet", etc.

 

Besides, the JV will help create the demand for civilian products of the enterprises of the military-industrial complex, promote products of the Russian military-industrial complex on the B2G market, develop competences not related to production, primarily in marketing, industrial design and analytics.

 

The key customers of NPO Konversiya will include the enterprises of the military-industrial complex which work with state defense procurement. Along with this, NPO Konversiya will develop relations with other relevant enterprises, including state corporations, private enterprises and development institutions.

 

"We have adopted a strategy aimed at increasing the share of Rostec's revenue from civilian  products to 50% by 2025. Priorities include achieving parity between military and civilian products, as well as the opportunity to transfer military technology to the civilian sector and vice versa. At the same time, the scientific and technical potential in the military sector will not only be preserved but it will also be given a new impetus for development. We hope that NPO Konversiya will become a "single window" for coming onto the market for civilian products not only for Rostec enterprises but also for the Russian defense industry in general," said Sergey Chemezov.

 

"In accordance with VEB's approved development strategy up to 2021, the main objectives of the upgraded Vnesheconombank will include transformation of Russian economy. The increase in manufacture and sales of high-tech civilian products is also Rostec's priority. I am confident that setting up a joint venture improving the performance of the enterprises of the military-industrial complex will ensure better coordination in tackling massive tasks; besides, it will enable Russia to become one of the leaders in terms of a new techno-economic paradigm," said Sergey Gorkov.

 

Along with this, during SPIEF the state corporations signed a strategic partnership agreement providing for creation of a single corporate treasury for Rostec and its enterprises. In accordance with this agreement, ensuring more effective cooperation between Rostec and VEB in terms of banking services provided within Rostec will become a priority.

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