Ukroboronprom

Ukroboronprom (UOP) (Ukrainian: Укроборонпром, Ukrainian Defense Industry) is an association of multi-product enterprises (conglomerate or concern) in various sectors of the defense industry of Ukraine.

State Concern Ukroboronprom
Native name
Ukrainian: Держа́вний конце́рн Укроборонпром
State-owned enterprise
IndustryConglomerate: Defense industry
FoundedDecember 2010 (December 2010)
Headquarters
Kyiv
,
Ukraine
Area served
Worldwide
Key people
Aivaras Abromavičius (Director General)[1]
ProductsMunitions, Small arms, Artillery, Explosives, Combat vehicle, Warship, Civil and military aerospace, Engines, Missiles, Electro-optical devices, CBRN defense
28,3 Billion ₴[2] (2016)
Number of employees
<80,000
Websiteukroboronprom.com.ua

The Concern includes enterprises which operate in development, manufacture, sale, repair, modernization and disposal of weapons, military and special equipment and ammunition, and participating in military-technical cooperation with foreign states.

The organisation has the functions of strategic planning, interaction with public authorities and coordination with divisions. This approach allows the top management of the organisation to focus on strategic decisions and long-term programs of the defense industry.

According to multiple reports the level of corruption in Ukroboronprom remains very high even in comparison with other parts of Ukrainian defence sector.[3] The systemic corruption in Ukroboronprom reached such a high level that it undermines relationship of Ukraine with its most important supporters.[4]

History

“Ukroboronprom” was created by the decrees of the President of Ukraine of 9.12.2010 № 1085/2010 and 28.12.2010 № 1245/2010, as well as decrees of the Cabinet of Ministers[5] of 29.12.2010 № 1221 and 31.08.2011 № 993.

The main goal of “Ukroboronprom” is the efficient management of Ukrainian military industrial sector and improvement of the effectiveness of the enterprises that are parts of State Concern.

In September 2013, five divisions were created in the structure of “Ukroboronprom”: aircraft industry and aircraft maintenance; precision weaponry and munition; armored vehicles, automotive equipment, engineering and special equipment; shipbuilding and marine facilities; radar, radio communications and air defense systems.

As separate divisions stand those, that are authorized to conduct import/export operations with military equipment and wares that hold National Security information. These enterprises conduct international sales of equipment produced by Ukrainian military industrial sector and post-sales service of equipment, maintenance, and modernization.

Roman Romanov, who graduated from the International Institute of Management (MiM-Kiev) and has an MBA degree, headed “Ukroboronprom” since 4 June 2014. As a result of his activity, “Ukroboronprom” finally became profitable by the end of 2014.

At the end-year 2014 “Ukroboronprom” fulfilled all government contracts by 100%. During the second half of the year 2014, the enterprises of the Concern created more than 2000 jobs and 13 more enterprises became profitable. Moreover, over the second half of the year wage arrears to employees totaling to 45 million UAH were overtaken.

On 26 August 2016, “Ukroboronprom” signed a memorandum of cooperation with the former head of the Agency for Defense Advanced Research Projects (DARPA) Anthony Tetter. He became an advisor on the long-term development of “Ukroboronprom”.[6]

“Ukroboronprom” was the first among Ukrainian industrial giants to launch the system of e-procurement. Its official start was in October 2014. By the results of 2015, the company saved 304.8 million USD, and in 2016 – 476.6 million UAH.[7]

Managed by its new Director Roman Romanov, Ukroboronprom increased its production by several times and started to provide systematically Ukraine's Armed Forces with the newest weaponry. In 2017, «Ukroboronprom» has fully completed the State Defense Order and conveyed 3 673 units of weapons and equipment to the security agencies of the country, including 2 053 new and upgraded ones.[8]

For 2014-2017, "Ukroboronprom" has risen by 14 positions – from 91 to 77th place – in the SIPRI world ranking of arms manufacturers.[9]

"Ukroboronprom" together with the American company Delphi Corporation has launched a new enterprise "Electric Systems". It has become the official supplier of components for Mercedes products.[10]

The Cyber Guard project from "Ukroboronprom" became the general partner of the cyberforum HackIT-2017. The event was attended by co-founder of Apple Steve Wozniak.[11]

On 12 February 2018 Roman Romanov announced the decision to resign from the post of the head of "Ukroboronprom".[12] On 21 February 2018 the President of Ukraine appointed Pavlo Bukin as the Director General.[13] Aivaras Abromavičius succeeded him on 31 August 2019.[1]

General background

The conglomerate was established in 2010 in place of the existing "Armored Equipment of Ukraine" (1999) and "Technological Military Service".[14][15][16][17]

The feasibility of combining in a single management structure of scientific, experimental, industrial enterprises and special exporters is supported by the positive effect, that the Concern has shown during its existence. Formation of “Ukroboronprom” made available organization of an innovation cycle "research - development - serial production - consumption (sales) - service - utilization".

To ensure optimal decision-making in different fields the State Concern uses a concept of divisional management structure. The concept was adopted taking into account current trends in theory and practice of management. Its essence is to separate strategic and operational objectives from industry operational problems management. A divisional principle is to provide administrative and economic "autonomy" of industries, a delegation of administrative powers of heads of divisions.

Initially it consisted of seven major state companies:

Currently the conglomerate includes 134 enterprises of the military–industrial complex of Ukraine.[14][18] It employs some 120,000 people.[18] In 2012 eighteen of those companies were to be reorganized (Resolution #223, March 21, 2012).[19] They included:

  • Kharkiv Morozov Machine-Building Design Bureau
  • Kharkiv Engine Building Design Bureau
  • Ship Building Research Project Center[20]
  • Shostka State Factory "Zirka" (Star)
  • Science Producing Complex "Iskra" (Spark)
  • Chemical State Association of Petrovsky
  • others

According to the company itself, China and India are a traditional market for Ukrainian military products.[18] In 2013, the Brazilian Navy announced a potential partnership with Ukroboronprom.[21]

In March 2014, during the 2014 Crimean crisis, the company barred all exports of weaponry and military equipment to Russia.[22]

Structure

State Concern consists of 134 military industry sector enterprises of Ukraine (123 state enterprises and 9 joint stock corporations, with the profits participation rights delegated to the management of “Ukroboronprom”).

Manufacturing and design sector

Armored vehicles, artillery armament, automotive, and special engineering equipment
Kremenchuk Automobile Plant

Shipbuilding
Shipbuilding Factory of 61 Communards

Radiolocation, RF Signal and Air Defense systems
  • "Rubin" (Ruby) (Uman)
  • Research Institute of Radio-electronics (Kharkiv)
  • Central Design Bureau "Proton" (Kharkiv)
  • Zmiiv Power Engineering Repair Factory (Zmiiv)
  • Balakliya Repair Factory (Balakliya)
  • 2nd Repair Factory of Signal Devices (Berezhany)
  • Ternopil Science Technology Company "Promin" (Ray) (Ternopil)
  • Research Institute "Shtorm" (Storm) (Odesa)
  • Special Design Bureau "Molniya" (Lightning) (Odesa)
  • Technical Production Company "Hranit" (Granite) (Odesa)
  • Southern Technical Production Company (Mykolaiv)
  • Ukrainian Radio-frequency Engineering Institute (Mykolaiv)
  • Lviv Research Institute of Radio-frequency Engineering (Lviv)
  • Lviv Radio-frequency Repair Factory (Lviv)
  • Kvant Factory (Quantum) (Kiev)
  • "Meridian" of Korolyov (Kiev)
  • Kyiv Factory "Radar" (Kiev)
  • Research Institute "Buran" (Kiev)
  • Henerator Factory (Generator) (Kiev)
  • Special Design Bureau "Spektr" (Kiev)
  • Research Institute "Kvant" (Quantum) (Kiev)
  • Science Technology Complex "Impuls" (Impulse) (Kiev)
  • Research and Production Complex "Iskra" (Spark) (Kiev)
  • Zaporizhia Company "Radioprylad" (Radio-frequency device) (Zaporizhia)
  • Zhytomyr Repair Factory of Radio-frequency equipment "Promin" (Ray) (Zhytomyr)
  • Research Institute of Complex Automation (Donetsk)
  • Design Bureau of RF Signal (Sevastopol)
  • Lviv State Factory "Lorta" (Lviv)
  • Production Union "Karpaty" (Carpathians) (Ivano-Frankivsk)

Aircraft

High-precision armament and ammunition
  • Shostka Treasury Factory "Zirka" (Shostka)
  • Shostka Treasury Factory "Impuls" (Shostka)
  • Research Institute of Chemical Products (Shostka)
  • Zhulyany Engineering Factory "Vizar" (Vyshneve)
  • Donetsk Factory of Chemical Products (Donetsk)
  • Design Bureau "Artyleriyske Ozbroyennia" (Kiev)
  • State Kyiv Design Bureau "Luch" (Kiev)
  • Science-Production Complex "Prohres" (Nizhyn)

Contracts and trading

Other
  • Southern Aviation Industrial Adjustment (Zaporizhia)
  • Kharkiv Aggregate Design Bureau (Kharkiv)
  • Tiachiv Factory "Zenit" (Tiachiv)
  • Konotop Aircraft Repair Plant "Aviakon" (Konotop)
  • Luhansk Aircraft Repair Plant (Luhansk)
  • Yuzhmash (Dnipro)
  • Pavlohrad Chemical Plant (Pavlohrad)
  • Luhansk cartridge plant (the Ukraine’s only small arms ammunition manufacturer. It was captured during the 2014 Russian aggression against Ukraine)[25]

Directors General

University cooperation

“Ukroboronprom” has cooperation with Central Scientific Research Insitute of Armaments and Military Equipment of Armed Forces of Ukraine[27] and leading Ukrainian universities like Kyiv-Mohyla Academy, Kyiv Polytechnic Institute, Kharkiv Polytechnic, V. N. Karazin Kharkiv National University, ME Zhukovsky KAU, Kharkiv National University of Radio Electronics and I. Kozhedub Kharkiv University of Air Force.

Best inventions of Ukrainian students are being embodied. Scientists of the Kyiv Polytechnic Institute have created a UAV. Students of other universities are actively involved in apprenticeship on the leading enterprises of Ukroboronprom.

In 2016, “Ukroboronprom” began to work with the best business schools in the country. In particular, the International Management Institute and Kyiv-Mohyla Business School. Senior management, management of the average level plants and industrials undergo training.[28]

At the end of 2017 "Ukroboronprom" and Igor Sikorsky Kyiv Polytechnic Institute opened a new master's program “Management in the field of defense and industrial complex”.[29]

In 2017, a series of MBA curricula for “Ukroboronprom” specialists was completed, including a partnership with the US Thunderbird School of Global Management and the International Management Institute in Kyiv.[30]

New developments

In the summer of 2016, “Ukroboronprоm” presented multipurpose unmanned aircraft complex “Gorlytsa” and tactical unmanned multipurpose vehicle “Phantom”.[31]

On September 28, 2016, at the international exhibition of armaments “ADEX-2016” in Azerbaijan, the State Concern introduced a new combat module “Taipan”[32] which specifications meet the highest Western standards.

In 2016, “Ukroboronprom” also developed and presented a digital fire control system “Myslyvets”,[33] combat modules “Duplet” and “Kastet”, 60 mm mortar KBA.118, and transport aircraft An-132.[34]

At the beginning of 2017, “Ukroboronprom” agreed with the American company “Aeroscraft” on co-production of automatic M16 rifle (model WAC47) that meets NATO standards.[35] As of October, 1st, 2019, no weapon of this type and model has been produced, confirming the inappropriate technical choices voiced by many experts.

In March 2017, the newest multipurpose transport aircraft An-132 successfully made its first flight.[36] “Ukroboronprom” agreed with the companies TAQNIA (Saudi Arabia) and Havelsan (Turkey) to develop a new modification of the aircraft for the marine patrol.[37]

At the 13th International exhibition of military equipment “IDEF-2017” in Istanbul, “Ukroboronprom” introduced a new portable grenade launcher.[38]

In 2017, “Ukroboronprom” successfully implemented a number of international projects. Together with the American company Aeroscraft, it introduced the automatic carbine M4-WAC-47 according to NATO standards. It can be adapted for a variety of calibers, including 5.56x45 NATO.[39] As of October, 1st, 2019, no weapon of this type and model has been produced, confirming the inappropriate technical choices voiced by many experts.

Two Ukrainian-Polish projects have also been created and demonstrated: main battle tank PT-17 and multiple launch rocket system ZRN-01 Stokrotka.[40]

In November 2017, the first Ukrainian combat drone "Gorlytsia" performed the first flight.

In 2017, "Ukroboronprom" successfully tested a new Ukrainian missile complex "Vilkha". Unique shells of missiles are made from superstructural alloys on the new technological line of “Ukroboronprom".[41]

International activity

“Ukroboronprom” actively works with foreign partners and has signed contracts to deploy production in Ukraine. For example, “Ukroboronprom” and Polish company Lubawa SA signed a memorandum on the establishment of new joint ventures in Ukraine, that will get 1 million euros investment.[42]

At the international exhibition “Arms and Security 2015” in Kiev, “Ukroboronprom” agreed on cooperation with the American company “Textron” in the production of heavy armored vehicles. The cooperation between “Antonov” and Polish company “WB Electronics” was also agreed. Ukraine will use the technology of the Polish company to develop a new tactical unmanned aviation complex for the Armed Forces.[43]

At one of the largest Asian international defense exhibition “Defense & Security 2015”, “Ukroboronprom” signed an agreement with the enterprise authorized by the Ministry of Defence of Thailand to manufacture modern Ukrainian BTR-3E1 and ensure its service in the Kingdom.[44]

At the International Aviation Salon Dubai Air Show in 2015, “Antonov” and the company “Taqnia Aeronautics” signed two memorandums on cooperation in promoting 4 sanitary AN-148-100, 4 reconnaissance and rescue variants of the AN-132, and 2 devices for producing of radio interference based on the aircraft to the market of Saudi Arabia.[45]

In 2016, “Antonov” and “Taqnia Aeronautics” signed an agreement on cooperation on the construction of aircraft complex and production of An-132 in the Kingdom of Saudi Arabia.[46]

The result of one of the largest international exhibitions “DefExpo 2016” was the agreement on large-scale partnership in military-technical sphere with the Indian company “Reliance Defence Limited”. The parties signed three agreements in the sphere of aircraft and aircraft repair, modernization of armored vehicles, maintenance of marine engineering, production and supply of drones.[47]

During the International Aerospace Salon “Farnborough Airshow 2016” in the UK, “Antonov” signed two contracts with the Canadian company “Esterline CMC Electronics”. Under the contracts, transport aircraft An-124 and An-148/158/178 will be equipped with modern avionics.[48] In addition, “Antonov” and “General Electric” have agreed on modernization of Ukrainian planes. The company also signed a memorandum with “Pratt & Whitney Canada”.[49]

Meeting of NATO Secretary General Jens Stoltenberg with the head of "Ukroboronprom" Roman Romanov, July 2017

“Ukroboronprom” also cooperates with NATO. Priority of cooperation is the development of a roadmap for Ukrainian defense industry transition to NATO standards, and deep partnership with the EU member countries. In 2016, for the first time in the history of Ukraine, the Day of the Ukrainian defense industry was held in NATO Headquarters (Brussels, Belgium) and the headquarters of NATO Support and Procurement Agency (Kappelen, Luxembourg). “Ukroboronprom” presented its products there including a number of new projects.[50]

In 2016, “Ukroboronprom” signed over 70 memorandums on cooperation with 20 countries.[7]

At the LAAD-2017 Defence & Security held in April 2017 in Rio de Janeiro, Brazil, “Ukroboronprom” agreed on cooperation in aircraft and unmanned vehicles, radio intelligence and heavy armored vehicles with Central and South America countries.[51]

At the international exhibition of arms IDEF-2017 in May 2017 in Turkey, the State Concern has agreed on direct cooperation with Undersecretary for Defense Industries under the Ministry of National Defense of Turkey.[52] “Ukroboronprom” also signed the agreements with Turkish companies Aselsan, MKEK, TAI.[53]

On July 10, 2017, NATO Secretary General Jens Stoltenberg highly appreciated “Antonov” transport aircraft during his visit to Kyiv.[54] He discussed with the head of “Ukroboronprom” Roman Romanov the prospects for expanding the SALIS program on strategic transport activities for the member countries of NATO and speeding up the transition of the “Ukroboronprom” enterprises to produce products according to the NATO standards.

In the annual world rating of arms manufacturers of the analytical edition Defense News, “Ukroboronprom” took 62nd place.[55] Western analysts have noted high rates of increase in production of modern military equipment. In 2016, “Ukroboronprom” took 68th place, while in 2015 – 92nd place.

In 2017, "Ukroboronprom" first participated in the international defense exhibition AUSA-2017 in the USA. "Ukroboronprom" introduced machinery, manufactured according to world standards. In particular, it presented an improved version of the unmanned armored personnel carrier "Phantom-2".[56]

The latest achievements of the aviation cluster "Ukroboronprom" demonstrated at Dubai Airshow 2017 in the UAE.[57]

Reforming strategy of the military-industrial complex of Ukraine

In 2016, “Ukroboronprom” developed a strategy for reforming military-industrial complex of Ukraine.[58] It consists of five key initiatives: corporatization, clustering, audit, a platform of innovations, and technologies protection. In 2016, Aircraft Corporation has been already created on the basis of “Antonov”.[59] Four clusters are in the process of creation: armored vehicles, shipbuilding, high-precision weapon systems, radar, electronic warfare and communications. A technical task for an independent audit by leading international consulting and auditing companies was developed.[60]

In May 2017, “Ukroboronprom” presented a new website presenting the strategy for reforming of the military-industrial complex of Ukraine - reformdefence.com. The site contains all important materials for each of the areas of strategy: corporatization, clustering, audit, technologies protection, and launch of the General Advanced Research and Development Agency (GARDA) that will be a platform to bring together developers, startups, investment funds, and military.

In November 2017, “Ukroboronprom” launched a new phase of reform – an international audit. A tender committee is formed to choose a consulting company. A Transparency International - Ukraine specialist is a member of the committee.[61]

Associated products

Ukroboronprom companies among others, manufacture such products:

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See also

References
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