has over the past several years been able to intensify military and technical cooperation with its international partners despite counteraction by Russia's propaganda machine. This is driven by the need to buy from the import market the armaments and technologies that the country’s military and public security services need on the one hand, and on the other, to improve export competitiveness of own domestic defense industries. SE (State Enterprise) Ukroboronprom and its affiliated companies are playing a key role in both efforts.


Defense Express interviewed Pavlo Bukin, CEO of SE Ukroboronprom, about the Concern’s development priorities and the current status of Ukraine’s military and technical cooperation with international partners.


What is your assessment of Ukroboronprom’s current performance?


The Concern continues focusing its activities on (1) the production of new military equipment technologies and renovation, refurbishment and upgrading of legacy inventories of Ukraine’s military and other security services, and (2) fostering the exports of domestic armaments manufacturers.


Over 2018, SE Ukroboronprom delivered over 4,900 pieces of newly-built, refurbished and upgraded military equipment for the needs of Ukraine’s army.


Regarding the international trade activity, I would give as an example the work done by SE SpecTechnoExport, one of Ukroboronprom’s affiliated companies. In 2018, the Company’s defense-related exports grew 27 percent year-on-year to reach $152.6 million. Also the same year, SpecTechnoExport concluded 148 arms export contracts with a combined value of $282.5 million – a record high for the past five years. This is just one example, minor but highly illustrative.


In 2018, Poland, the Czech Republic, India, Algeria, Myanmar, the PRC, Turkey, Indonesia, and Azerbaijan were the Concern’s largest export customers, among others.


What is the situation in the Concern with finding replacements for components that Ukrainian defense industries previously sourced from Russian suppliers?    


Methodical work to this end has been in progress since 2014. The substitution of Russian-sourced components is being achieved by setting up domestic production of the needed components and by importing some from countries where the components are in production or in surplus storage. The Concern has actively worked with over five hundred privately-owned businesses in Ukraine that have been able to substitute Russian-made components for own alternatives. Overall, most critical of the component substitution issues have been largely resolved, if compared with the situation as it was in 2014-15.


The National Security Law passed in Ukraine recently contains a provision to reform all military branches in Ukraine according to NATO standards. What challenges does this present to the defense-industrial sector?


We need to achieve membership in NATO, since this is the most effective and economical mechanism for protecting national security. Ukroboronprom is working towards ensuring progressive adoption of selected NATO standards into the manufacturing process and into new military technologies being developed. Yet this process is expensive and time consuming and can end up costing billions of dollars.


If we are speaking in the context of the adoption of NATO standards, then a transition to NATO standard weaponry is a necessary must. This [weaponry] could be obtained e.g. at no cost from our partners along with relating integration services. If we regard small arms weapons, there should be a resolve to scrap, in a lawful way, everything that has long been out of date. With legacy weapon arsenals remaining in place, decision-making is more stressful and less rational. The adoption of NATO standards related to aviation is the most complex and expensive challenge being faced.  


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There has been much talk recently about military and technical cooperation between Ukraine and Turkey. What is your assessment of its current status?


Turkish - Ukrainian military defence sphere relations have intensified during last three years. We have intergovernmental commission to develop this relation. We have very close contacts with our counterpart in Turkey, SSB. Our relations are very constructive. During last three years our countries compared our competitiveness at military production. We clearly understand where the crossroads and synergy for cooperation are.


Ukraine has recently purchased from Turkey a number of Bayraktar TB2 Armed Tactical UAVs that have already undergone successful flight testing in the Ukrainian skies. The Turkish drones were purchased completed with Roketsan MAM-L (also known as Smart Micro Munition) micro bombs.


In the export domain, Ukrainian companies are working with Turkish partners on projects covering largely, but not exclusively (1) sales of a wide range of assemblies and replacement parts for military grade weapons and vehicles, (2) maintenance, repair and overhaul (MRO) of Mi-17-type helicopters, their associated components, assemblies and systems; training of MRO personnel, (3) deliveries of components and systems for application on Turkish-produced weapon modules armed with guided missile weapons, (4) the manufacture and sales of AI-450-type turbofan engines, and (5) deliveries of Zaslon-type hard-kill active protection systems.


I would add to this that fruitful cooperation is progressing well. We are now exploring potentially promising avenues for cooperation that include, but are not limited to: (1) co-production and/or sales of Antonov-series transports, (2) expansion of the scope of cooperation on UAV technology projects, (3) the integration of explosive reactive armor kits and hard-kill active protection systems onto Turkish tanks, (4) the development and production of passive radar technologies.


Little time remains before the opening of Le Bourget Paris Air Show 2019 in France. How are relationships developing between Ukraine and that European country?      


We have pretty long relationships with France as a partner in military and technical cooperation. The history of these relationships is full of successes and fails. Still bilateral military and technical cooperation has been showing a certain degree of upward dynamics.


The largest bilateral project so far was the sale by Thales Communications & Security of Electronic Warfare systems to Ukraine’s Defense Ministry. The package also included follow-on support services and systems integration onto wheeled vehicle platforms.  


Alongside that, Airbus Helicopters is known to have agreed to sell a quantity of its H125 choppers to Ukraine. Deliveries for the needs of the Interior Ministry and emergency response services have been already under way.


The two parties are now exploring opportunities for expanding cooperation in this regard, and specifically through the arrangement of offset compensations.


Besides the purchase therein mentioned, Ukraine, last year, bought Spy Arrow UAVs from Thales Group and nigh vision devices from Sagem Defense Securite.


It is to be noted, in that context, that further cooperation is hindered by a ban on arms shipment to countries where hostilities take place, including Ukraine. Resolving this issue requires support and assistance from the country's senior-most leadership.


The potential projects that hold promise and are of vested interest to Ukraine include, most notably but not exclusively (1) naval warships, systems, and weapons, (2) building a maintenance/servicing center for the Airbus S.A. helicopters being delivered for the needs of Ukraine’s Interior Ministry and emergency response services, (3) the purchase of electronic-optical systems and devices, and electronic intelligence (Elint) systems.


Overall, Ukrboronprom has over the past few years greatly intensified its cooperation in military technology with EU countries. The EU ranked first in Ukraine in terms of the number of contracts concluded in 2018, and EU companies are also top largest exporters of defense-related products, works and services to Ukraine. In Europe, Poland, Bulgaria, Turkey, Croatia, Lithuania, Latvia, and the Czech Republic are most active in cooperating with Ukraine in the military technology domain.


There has been a perception aggressively promoted by the Russian authorities and media recently that Russia has an exclusive entitlement to do MRO of Soviet-built aircraft types. Is that so?


Ukraine is a strong actor on the market of MRO services for aircraft, including those originating from foreign countries. We are indeed a strong competitor for Russia, and this is what is driving Moscow to pressurize its friends and partners into believing to the contrary. Ukraine holds all the required and necessary licenses and technical manuals on maintenance, refurbishment and life extension overhaul for a broad range of military aircraft brands that include MiG, Su, and Il [series of airplanes], and Mil [series of helicopters]. These licenses cannot be revoked, nor are there any legal grounds for Russia to require additional licensing from Ukraine. Beyond that, each operator country establishes its own rules and makes changes to the design. The freedom of maneuver in this regard is only limited by the level of R&D and manufacuring capacities a given country possesses. Therefore, the claims being asserted by developers or producers, in this case, Russian, have no merit. Also noteworthy, Russia displays double standards when it makes such ungrounded claims against Ukraine while simultaneously promoting on export markets MRO services for the Ukrainian-designed Antonov series of airplanes.


What are your nearest goals to be met with respect to SE Ukroboronprom’s restructuring reform and defense-industrial modernization in Ukraine?


Indeed, the goal is to bring to successful completion the long-talked-of endeavor of the defense industries’ corporatization and clusterization into divisions. The work has been almost complete to clusterize defense industries into divisions depending on their respective industrial expertise and competencies. There will be five or so industrial clusters set up.


I am furthermore looking to build a clear-cut, transparent system of internal collaboration, a one involving public and private contractors, and we have worked intensively to this end.  




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