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The President toured the plant’s training centre and production facility, and learned about the work of the company’s new production lines.

Klimov JSC develops, manufactures, and services turboshaft engines for helicopters and turbojet engines for fighter jets.

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President of Russia Vladimir Putin: Good evening, colleagues,

Today, we will examine plans for developing Russia’s aviation engine building sector. And to do this, we have come together at the site of one of our leading gas turbine engine designers and manufacturers at the Klimov plant.

We just saw some promising designs and the company’s executives demonstrated and discussed how the large-scale project to renew the company’s infrastructure is advancing. We will still be talking about government support measures for such projects. Indeed, the Minister and I have already begun the discussion; he has a few suggestions and will talk about them in more detail today.

Our goal is to strengthen the research, production and workforce potential of Russian companies in aviation engine building. I must say, I have wanted to see you and to talk about these matters for a long time, because the outlook in your sector directly affects our aviation industry’s future. And if we are being honest, you are well aware that although there are natural problems in combat aviation that are being resolved and, I’m certain, will be settled, when it comes to civil aviation, engine-building is one of the most significant elements that is, frankly, preventing us from breaking into the global market. And you know how our own freight companies buy our equipment: based first and foremost on such parameters as noise and fuel consumption, and then other features. I repeat: I have long wanted to see you and talk with you about these issues.

It is precisely with the goal of resolving these serious challenges that deep, structural changes were made in the sector and the United Engine Corporation was established, consolidating technological, intellectual and financial resources.

As a result, we are ultimately seeing progress as compared to 2009; that is clear. The company is producing twice as many engines, its product range has increased, and projects have been launched to develop next-generation engines for combat and civil aviation. I will note that the United Engine Corporation is in steady demand abroad, particularly for helicopter equipment. Just last year alone, the company’s exports came to more than 43 billion rubles. This is nearly half of the corporation’s total proceeds. As for helicopter equipment, you know better than me, the progress here is truly obvious. We are not just continuing to maintain a good niche in our own nation, but are expanding abroad. But what’s particularly pleasing is that new sites are appearing – very technological, productive ones – and we are getting away from dependence on our international partners, which is very important, particularly as far as combat equipment is concerned; this is obvious.

At the same time, in order to successfully remain competitive in this high-tech market, we need to offer truly innovative, high-quality products. And naturally, we must increase the share of engines certified in accordance with international requirements and standards. This is certainly a difficult and lengthy procedure, but that is precisely what will open new international markets for us.

The United Engine Corporation is also facing other pressing challenges, including with regard to combat aviation, which I already mentioned. In recent years, we have seriously increased the volume of orders for combat planes and helicopters within the framework of the State Armament Programme. And I am talking about equipment with fundamentally new, better technological features.

Today, I would like you to report the extent to which such production expansion is guaranteed by the upcoming line of engines – including the progress in testing the engine for a fifth-generation jet fighter, as well as the creation of an engine for a projected high-speed helicopter. Today, Klimov CEO [Alexander] Vatagin talked about this. I hope things stand exactly as he described. Let’s talk about it in more detail. As for the fifth-generation fighter, we know what engine it currently uses. Essentially, test pilots are satisfied, but we are also quite aware of the challenges in this respect. Today, I would like to hear about how this work is progressing.

As for civil aviation, one of our key priorities is the MS-21 mid-range jet airliner. I know that the demo engine for the aircraft is ready and is undergoing testing. It is important for the certification process to be completed rapidly, so that it can go into mass production in accordance within the deadlines set.

Moreover, as I already said, the main efforts should be focused on ensuring the independence of Russian aircraft engineering from foreign engine manufacturers, as well as imported components. For now, the share of imports is sometimes quite high. For example, for individual helicopter engines, the share of imported components can be as high as 80%. We need to develop our own component base, and increase the depth of localisation. I have already talked about this. As for helicopter engines, there is progress in this area, at the new St Petersburg sites. I would like to hear about this in more detail from you.

And finally, it is imperative for the United Engine Corporation to resolve all its financial problems to assure further development. In part, this directly affects lowering the current debt load. Minister [of Industry and Trade] Denis Manturov and I were just talking about this. In spite of the fact that the corporation’s proceeds have been growing actively in recent years, it remains in the red because of the debts inherited from the enterprises that are now part of it. Here, of course, we need some fresh approaches, reorganisation and rehabilitation measures that would include lowering debt load and production costs, as well as optimising the United Engine Corporation’s product portfolio.

Let’s discuss all these topics in more detail.

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