Eugeny Komrakov, R.E.T. Kronshtadt - "Р.Е.Т. Кронштадт"
Release Date: 2009-05-22As I understand, R.E.T. Kronshtadt is a joint venture of Rosoboronexport and Transas. How did this come up and what does each party bring to the joint venture?
Initially, the idea was that Transas had many marine and aviation products for the civil market but we did not have any military market although the technologies were very good. Some ten years ago we approached Rosoboronexport which was interested in our products. The first five years were very difficult; the simulator market was not yet ready. Now it’s much better in the market of simulators and avionics, and we also have a production line of UAVs with our own electronics and software - in the future it will also be one of the most important directions for the company.
I guess that you have to adapt to the Russian products first. What products are you focused on?
If we talk about the military market, most of our activity is with the Mil Aviation Plant and the Kazan Machine Plant, Ulan-Ude, Rostvertol, Sukhoy. Most of our business is helicopters. There’s currently no cooperation with MIG but the company is considering it. Of course, if we talk about military market and civil market, companies like Eurocopter have their own partners and products for avionics and simulators. We will manage to do something in the civil sector; the military sector is closed in terms of market data.
What would a company like Sukhoi represent for your business?
They have already long-term contacts with avionics manufacturers. If you compare the quantity of helicopters and planes of Sukhoi, the difference is huge, 10-20 times. In our opinion, it is better to go to the helicopter market and it is easier.
Many of Russian helicopters are not only here in Russia but also present on foreign markets - India, China Venezuela. How do you provide after-sale service abroad?
We have a big project for avionics: we installed our avionics on Ka-31 for India who bought 12 helicopters for which we have supplied 16 systems; four of them are spare systems.
Is it the latest contract?
It was 4 years ago. There were initial problems with our lighting system and the avionics, but we changed the system and the problem was resolved.
Transas has a lot of experience in the Russian market. Three year ago, for the first time in the whole history of Russian avionics production, international requirements – such as terrain collision avoidance system - became compulsory, and there were no installations of foreign companies. We were on time, made good systems that were installed on 480 planes, and managed to avoid foreign companies penetrating the Russian market. Now we have 500 planes and helicopters with such systems and nearly no one complaining of the quality and post-warranty support.
Are you investing in R&D? What is the ratio of investment?
It is difficult to say in terms of money; we 450 software engineers and 150 electronic engineers. In total there are 1,200 people working in Saint-Petersburg. We have a very small and compact production line. All our electronics are on good automated lines and we don’t need many people working there. There’s capacity for production of 5-7 pieces of avionics every week. If we need more - like now that we got an order from Russian Railways to produce 1,800 special computers - we can use another production line. We do the design, produce the first party, test it and transfer it to another electronic factory in Vyborg.
I understand that Saint-Petersburg is a good base for producing software. In some cases specialists from Saint-Petersburg have moved to more internationalized companies… Why are you not more aggressive internationally?
Actually we are. You are referring to the more than a hundred people from our company which went to work for Microsoft. That’s one thing, but as for our presence in the international market, we have 35% of the world navigation integrated systems market. We installed our system on about 15,000 ships. As for marine simulators, we have 45% of the world market of civil marine simulators and we compete with another three companies in the world. We have 80% of the market in the USA, 50% in Japan and in China - 70%. At least half of these software engineers work in this market.
When will the success story of marine systems be repeated in aviation?
We started the aviation market 5 years later, in 1995, than the marine market that started in 1990. Aviation is a slower sector and more complicated. For helicopters it takes minimum 5 years to develop everything: hardware, flight tests, certification, and close work with design bureaus… Ships don’t require special design bureaus. But we are sure we’ll get a good portion of international market in aviation and simulators too.
Are we talking of mid-term - another 5 years?
Yes. Now we’re working with Boeing and Airbus for simulator systems in Russia. We’re also working on avionics, searchlights; in the USA we have 51% of an American company certified according to the requirements of the USA in production of avionics. It is very important because it is a sine-qua-non condition for selling. Now we’re starting business with searchlights and avionics.
Does your successful marine systems experience help to convince potential aviation partners?
Yes, but it’s another product. If in the USA almost all simulators and navigation equipment including cost guards are produced by Transas, the aviation market is much more difficult.
So what would be your competitive advantages in the aviation market?
We produce very good quality products, acknowledged by companies like Sagem with whom we have a couple of joint projects; L3 sends us good experts and experienced engineers in quality to Transas on a regular basis to help us raise quality standards. There’s a big difference in Russian quality standards: Russia mostly deals with military standards; on the international market standards are more strict and difficult.
We work actively with many partners. There’s a Swiss company that produces clock for helicopters according to international requirements. The matter is that in Russia there is only one factory that can produce this type of clock and it produces only ten clocks per year - but at least seven hundred are necessary every year! So, Transas has arranged joint production on the basis of OEM, with Transas equipment and Swiss-based production.
You don’t miss an opportunity!
We had many OEM projects during our history. For example with JRC, a big Japanese marine company which produced electronic chart display information systems with our software and their hardware. We installed our systems on thousands of ships in cooperation with UK companies. We’ll do the same for avionics.
If you have to send a message to the readers of www.Russianavia.net , what kind of a partner can they find in Kronshtadt?
Generally, we have good prospects on the international market in the nearest future. We can’t go to the military markets of NATO, but, being Russian, the markets of India or China are open for us.
Thank you, Mr. Komrakov, for talking to us!
|Company:||R.E.T. Kronshtadt - "Р.Е.Т. Кронштадт"|