Russian Maker of AK-47s Banks on Asia to Join Defense Elite

Asia is a key part of Moscow-based Rostec State Corp.’s plan to become one of the world’s top five defense companies within a decade, according to a senior executive.

Rostec, whose units account for about 70 percent of Russia’s defense industrial base and include AK-47 assault rifles and MiG fighter jets, will focus on selling more to countries including India, Indonesia, Thailand and the Philippines, Viktor Kladov, Rostec’s director for international cooperation, said in an interview conducted by email on March 24.

Russia is attempting to diversify its economic, diplomatic and security ties throughout Asia and the Middle East, partly to overcome sanctions imposed by the European Union and U.S. over the Ukraine crisis. Capturing a bigger slice of rising defense budgets in Asia — and market share from competitors in the U.S., Europe and China — fits with that strategy. U.S. sanctions specifically target Rostec and subsidiaries.

“I believe that we can manage this work,” Kladov said, while attending the Langkawi International Maritime and Aerospace Exhibition in Malaysia. “Countries are increasingly striving to get access to technologies so as to be able to organize domestic production, and not to depend solely on imports. All this is potentially a vast business volume — this is a worldwide trend.”

China Competition

Russia’s ambitions in Asia will put it head-to-head with China, one of its biggest customers and increasingly a competitor as it attempts to establish itself as an arms supplier. China, which used to rely on selling copies of Russian weapons systems, is starting to develop more advanced equipment.

“Since the Russian economy isn’t doing so well, arms exports are a very attractive way to make money, so I am not surprised that they are really aggressive when trying to push their arms exports, particularly in Asia,” said Richard Bitzinger, who studies the military as a senior fellow at…

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