Russian rocket maker Khrunichev is to receive a Rbs37bn (US$636m) loan from state-owned Vnesheconombank (VEB Bank) to improve the efficiency and reliability of its Proton production process.
Speaking at a press conference held at Satellite 2015 in…
Russian rocket maker Khrunichev is to receive a Rbs37bn (US$636m) loan from state-owned Vnesheconombank (VEB Bank) to improve the efficiency and reliability of its Proton production process.
Speaking at a press conference held at Satellite 2015 in Washington DC, Andrey Kalinovskiy, general director of Khrunichev, said the company would receive the majority of the targeted ten-year loan this year with the remainder dispersed in 2016.
Proceeds would be used to support the ongoing programme to streamline the company’s operations, reducing the number of plants and facilities, as well as increasing the amount of automation to lessen the likelihood of human error. The process is expected to be complete within three years.
Kalinovskiy added that Khrunichev will receive the loan regardless of the ongoing process to consolidate the company into United Rocket and Space Corporation, the state-owned joint stock company that will pull together the entirety of the country’s space industry.
Outlining the timeframe for the creation of URSC, Kalinovskiy said: “Currently a bill is being drafted to establish the new state-owned corporation, URSC, which will unite all the assets of the Russian space industry including Khrunichev among others as well as the national space agency Roscosmos. The bill should be prepared this year and the process of consolidation should also occur throughout 2015.”
He added that there will be zero impact on International Launch Services, stating that the consolidation will have no relevance to how the company operates.
Responding to a question from SatelliteFinance over whether there would be a potential conflict of interest in the new entity – being both the customer (Roscosmos) and the vendor (the country’s space industry) – Kalinovskiy argued that the country had experience in the arrangement.
“Fortunately this is not the first state-run organisation to be set up in Russia. We have successful experience of operating such agencies as Rosatom, the united nuclear industry, and Rostec, a joint stock company for Russian technologies. So we do have the experience of operating on this scale and were able to bypass and avoid these problems.”
Kalinovskiy also pointed out that Igor Komarov, the new head of URSC, has significant experience of being a crisis manager, turning around struggling enterprises. Komarov was previously the head of Russia’s largest car manufacturer AvtoVAZ for the past five years.
Once URSC is fully operational, Komarov and his team will have a central control over the space industry, including the likes of Khrunichev and Energia, although Kalinovskiy believes that there would also be a lot of downwards delegation of authority to the various entities.
While Kalinovskiy admitted that the decline in the Russian economy since the Western sanctions were placed on it had impacted its operations, ILS president Phil Slack pointed out that those sanctions had not impacted on the launch service provider.
Slack said: “I am pleased to state that the sanctions, which were officially introduced late March early April of last year, have had absolutely no impact on Proton’s operations at all.
“When they first came out there was some concern, the [US] State department that processes our export licence put a temporary hold on the process and the licences. But this was just a hold, they did not revoke any existing licences, they did not deny any licences, they just simply put a hold on them until they better understood the situation and what direction the White House wanted to go.
“After a fairly short amount of time that hold was lifted. In 2014, we actually had 39 licences processed and approved by the State department. There has been absolutely no delay in any technical activity, any launch activity, we have all of our licences for our entire backlog.”
Slack added that Khrunichev’s drive to improve production efficiency should help ILS continue to compete in a launch market when prices have been driven down by increased competition.
The company is also benefitting from the sharp decline in the value of the rouble. Slack remarked: “The rouble situation has also changed significantly over the last year or so. Most of our contracts are negotiated in US dollars while most of the costs are in roubles. So as the exchange rate goes up that means there are more roubles provided for the overall price that we are paid.
“At the same time you have to recognise that, when you have a large change in the currency rate, that will also lead to a change in the inflation rate, so wages will go up, etc. So it is not one for one. But certainly in the near term at least there is some benefit and we are using these benefits to be able to offer more competitive pricing.”
ILS has also sought to increase its competitive advantage by utilizing the Russian export credit agency EXIAR, which has looked to increase its presence in the space sector in the past year.
However, this intent has yet to manifest itself in firm deals and none of ILS’s customers have utilised the agency so far.
Slack commented: “EXIAR certainly is available. It’s not something that has been used for space very much and not on Proton yet. I believe it was used by Angola for a satellite.
“Right now, there are lots of alternatives for customer financing and many of the larger customers can obtain good economic solutions through their own banks. EXIAR is something that is still there and available if the smaller operators want to use it.”
