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. Last Updated: 07/27/2016

Restructuring Motovilikha Eyes Indian Market

Ailing Perm-based defense company Motovilikha Plants will undergo a major overhaul and net a profit in 2003, its recently appointed general director said Friday.

"We have begun to restore the company's financial well-being," Ivan Kostin said at a news conference marking his 100th day at Motovilikha.

Majority shareholder Rus, a financial group, invited Kostin last fall to turn around Motovilikha as he had just done as general director at the country's No. 1 truck maker, KamAZ.

Kostin said he will restructure the multitude of subsidiaries that sprouted under previous management and create a more efficient head office by slashing the number of managers by a third to 300. Motovilikha will also shed non-core assets to concentrate on multiple-rocket launchers, artillery systems, oil extraction and road-building equipment, he said.

Motovilikha expects sales to leap 23 percent in 2003 to some 3.2 billion rubles ($100 million), yielding a net profit, Kostin said. The company reported a loss of 450 million rubles on sales of 2.6 billion rubles in 2002.

Kostin said oil industry equipment sales should bring in about a third of revenues this year. Military orders, which make up 20 percent of Motovilikha's business, have also picked up. The number of orders from the Defense Ministry -- mostly modernization projects -- has doubled compared with 2001.

Export-wise, the company is pinning its hopes on a long-awaited contract to deliver 9A52-2T Smerch multiple-rocket launch systems to India. Kostin said the contract -- negotiations began in 1995 -- could be signed by April.