* Middle East is its largest market after US sanctions
* Company to invest across its operations
* JV in India to make assault rifles in 2017
By Stanley Carvalho
ABU DHABI, Feb 21 Russian weapons maker
Kalashnikov Group's sales doubled last year, helped by demand in
the Middle East for its drones, missiles, rifles and military
vehicles, making up for US sanctions that cost it its largest
market, its chief executive said.
Kalashnikov, whose AK47 assault rifles have armed Russian
forces for 70 years, embarked on a modernisation programme and
targeted new markets after it was ousted from the United States
due to sanctions for Russia's role in the Ukraine conflict.
It invested 10.5 billion roubles ($182 million) over 2014 to
2017 and targeted new markets for its lines of assault and
sniper rifles, guided artillery projectiles and precision
It plans to invest more than 10 billion roubles over the
next two years, Alexey Krivoruchko said.
The programme has paid off and the Middle East is now its
largest market, accounting for the bulk of its exports, he told
Reuters on the sidelines of the International Defence Exhibition
(Idex) in Abu Dhabi.
“Sales have doubled in 2016 with demand growing for weapons,
drones and other products,” Krivoruchko said, declining to give
figures or further details.
Military products now account for 80 percent of sales with
civilian sales accounting for the rest, unlike before U.S.
sanctions when it was the reverse, he said. Its civilian
products include hunting shotguns and sporting rifles.
To keep up with orders it is hiring 1,500 more people to
staff its factories 24 hours a day, seven days a week, as its
expands operations across its companies, Krivoruchko said.
It is also in advanced talks with a partner in India to
start producing assault rifles there, possibly this year.
“India is a very big market and we like the ‘Make in India’
programme,” he said, adding Kalashnikov is also in talks with
two other countries to set up similar joint ventures.
Krivoruchko and investor Andrei Bokorev bought a 49 percent
stake in Kalashnikov from state-owned holding company Rostec in
2014. Three weeks ago, they bought another 25 percent stake from
Rostec, taking their ownership to nearly 75 percent, he said.
“We have more flexibility in making speedy decisions now for
faster growth of the company,” he said.
Kalashnikov is keen to return to the US market, but there
are no indications yet from the new administration that
sanctions will be lifted, he said.
($1 = 57.5858 roubles)
(Reporting By Stanley Carvalho, editing by Susan Thomas)