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. Last Updated: 07/27/2016

Aerospace Group Formed

A group of aerospace firms in the Samara region announced Wednesday that they have formed a new financial-industrial group, NK Engines, to speed development of engines for rockets, aircraft and natural-gas pumping stations.

"The task of our group is to offer products that are good enough to stop the advance of foreign technology on the Russian market," said Igor Shitaryev, chief director of the Motorostroitel engine manufacturing enterprise, which will head the new group.

The Samara grouping has reason to fret about foreign competition. Its rival, Perm Motors, is poised to agree with Pratt & Whitney of the United States on development of the PS-90 aircraft engine. It could upstage the NK 93, the product that will be crucial to the success of the Samara group.

Motorostroitel already suffered a disappointment earlier this year when it was outdone by Energomash, an engine builder near Moscow, in the bidding to supply engines for the U.S. Atlas space rocket.

Whatever the success of NK in the aerospace market, it can fall back on the Russian natural gas monopoly Gazprom, which needs large numbers of Samara engines for pumping gas through the vast Russian pipeline network. But even here, there is a growing threat from another U.S. company, General Electric.

NK's relationship with Gazprom and with the Russian space agency, which buys its rocket engines, has enabled the Samara group to overcome cash shortages.

Gazprom provides gas in return for pumps from the Samara engine maker, which receives cash for the gas from other companies. The Russian space agency, meanwhile, keeps down Samara's tax debt by giving it tax exemptions in lieu of payment for rocket engines.