Rostec, September 14, 2016 - The top advisor to the CEO of Rosoboronexport and the head of the company's delegation at the Africa Aerospace and Defence 2016 Fair, Yuri Demchenko, discussed in a TASS interview what kind of Russian military equipment is in the highest demand in the African region, and about competition with European states, the USA and China.
They also addressed how the current state of the oil market is being reflected in the purchasing capacity of African oil-producing countries.
- What are the dynamics of Rosoboronexport's presence on the weapon's market in Africa? What subregion dominates the supply structure – North Africa, or the region to the South of the Sahara? And how is the share of Rosoboronexport's supplies to the African region changing?
- During the last three years this market, which is quite appealing to Russian suppliers, has demonstrated stable growth trends. There are a range of objective factors playing different roles. Firstly, this means the growth of terrorism, maritime piracy, drug trafficking, illegal fishing and hydrocarbon extraction threats, the need for important infrastructure protection objects, as well as counteractions against extremist groups of different types. In addition, African countries are increasing their role in regional and international peace-support missions. Priorities in the promotion of Russian military purpose products (MPP) to specific countries accordingly heavily depend on the effects of the listed factors. But to talk about one subregion's dominance over another is not quite correct due to strong differences in the number of countries in each of them and the current condition and development of States on the African continent.
As a whole, the share of Africa in world weapons exports is not relatively large. For example, the African region to the South of the Sahara makes up about 2% of this sector. However, the dynamics of Russian MPP promotion on the continent for Rosoboronexport products has shown growth over the last years. The same situation is also observed in the subregion of North Africa, where a series of countries have significantly increased the volumes of Russian weapon purchases and now rank among our main partners in MTC.
- What can be said about competition with European states, the USA and first and foremost China, on the African weapons market? Would it be appropriate to say that Rostec is still the leader in terms of finance volumes of supplies to the region?
- Data for military product deliveries to African countries are commonly closed. Therefore we have no opportunity to operate using specific numbers or give an accurate analysis of the financial volumes ratio of Rosoboronexport to other world export supplies. Nevertheless, open source information allows us to say that Russia occupies one of the top places in this market. The share of our country in supplies only to African countries to the South of the Sahara is the most significant, and totalled around 30% for 2011–2015.
Indeed, Rosoboronexport has to work in the African weapons market among severe competition from foreign exporters, primarily Western countries and China. Lately, the activity of the Republic of South Africa as one of Africa's exporters has grown notably in this market. With that, Russian special exporters have a great competitive advantage thanks to a profitable price and quality ratio of the products offered. In African countries people are very familiar with, including from combat use experience, and highly evaluate Russian weapon reliability and the ease of its operation in the most adverse tropic and desert conditions.
- What kind of Russian military equipment is in the highest demand in the African region? What is the export supply structure to Africa by kinds and types of weapons and military equipment?
- Over the years, Russian helicopters, rocket and artillery weapons, armored vehicles, small arms and close combat weapons, and automotive vehicles including armored vehicles, have remained as the most in-demand in Africa. In North African countries this list can be supplemented by submarines, tanks, air defense systems and war airplanes.
There are also a considerable volume of deliveries of equipment designed for fighting terrorism and organized crime, and also conducting peacekeeping operations. Small arms, close combat weapons and special technical devices are actively purchased for these purposes.
- Is cooperation with Angola regarding light armored vehicles, fighter aviation, helicopters, artillery systems and air defense weapons still continuing? Did the situation in the oil market and the price drop have any effect on the purchasing capacity of Angola and other African oil-producing countries (Republic of Congo, Nigeria, Gabon) in the W&ME market?
- Rosoboronexport continues to complete contracts on the delivery of modern air complexes — Su-30K airplanes as well as Mi-17SH and Mi-24P helicopters — entered into with Angola. Of course, the situation in the world oil market has a definite negative effect on the ability of African oil-producing countries to fund weapons purchases. Moreover, we already have specific examples of when some importers had to correct their needs taking into account the condition of the hydrocarbon market. However, we struck upon a mutually acceptable payment scheme and optimal solutions on the offered products in such a manner that reduced impacts on our partners' budgets.
But on the whole, oil market fluctuations do not have a radical impact on Russian weapon exports to oil-producing African countries. Their needs are primarily stipulated by serious existing threats and challenges, not by hydrocarbon prices.
- Which of the countries to the South of the Sahara is the priority partner for Rosoboronexport?
- For such questions we typically answer that we have neither privileged nor priority partners. Each partner is important and uniquely individual for us. In the coming decade, experts evaluate GDP growth in African countries by 3–6%. Therefore, as a dynamically developing continent, Africa itself is a priority and perspective market for us.
The market of weapons in the Republic of South Africa is considered to have a high volume. For many years, we have been actively working with our South African partners to find specific, mutually profitable projects of cooperation in very different areas. Rosoboronexport will take active part in the seminar of Russia and SAR defense industry representatives to be held as part of the Africa Aerospace and Defence 2016 International Fair of weapons for all weapon types in Johannesburg on September 12, 2016. In the course of the seminar a variety of subjects and projects of mutual interest will be discussed, including in the hi-tech sphere.
- Is there cooperation on the supply of heavy armored vehicles to Nigeria?
- Supplies of armored vehicles to Nigeria, including heavy ones, are non-existent, and currently these purchases are not among the priorities. Nevertheless, we are also ready for cooperation in this regard, taking into account the country's needs to stand against the Boco Haram terrorist organization. Russian manufacturers offer a variety of armored vehicles, including custom vehicles, designed for just these purposes.
- Are used and repaired or upgraded weapons in demand in African countries? What is the ratio of the supplies of new equipment to the supplies of available equipment?
- Many countries of Africa actually prefer to purchase for the most part used weapons and military equipment. For example, we deliver overhauled Mi-8 and Mi-24 helicopters to this region. In addition, we offer our African partners repair and upgrade service for previously delivered Soviet and Russian weapons and military equipment. But in general, preference is still given to the purchase of new products.
- Is cooperation with the RSA continued in the aerospace industry?
- In relation to Rosoboronexport, cooperation in the aerospace industry is not formerly developed with the RSA. And there are also no current projects in this area.
- Is there any interest in the newest, most advanced Russian developments, especially for heavy armored MRAP class vehicles, from African countries?
- Of course, many of our African partners are showing interest in the latest developments, including heavy armored vehicles. This became particularly clear after the Victory Parade in Moscow in May 2015, where Russia showed the most recent developments in armored vehicle technology to the whole world: T-14 tanks on the Armata platform, and infantry combat vehicles on the Kurganets platform. However, it is unknown when these advanced Russian machines will be set for export, and generally speaking, not all countries have a real opportunity to buy such equipment. Therefore, preference is still given here to light machines, which are appealing not only because of price, but also with its lower operational and maintenance costs, and its potential mobile application both in metropolises and on rough terrain.
- What position do Russian rotor-wing machines occupy on the African market? Are there confirmed improvements over last year?
- Helicopters remain one of the most in-demand types of military equipment on the African continent. In 2014–2016, Mi-8/Mi-17, Mi-24/Mi-35 Russian military helicopters were delivered to such countries as Angola, Uganda, Sudan and Rwanda. In 2016–2017 there are plans to continue the delivery of these helicopters to Angola, Mali, Sudan and Nigeria. Our positions are very strong on the helicopter market in Africa, and therefore we assess its further development prospects as hopeful.