Friday, July 18, 2014

Concern Kalashnikov Comments on U.S. Sanctions

Since, the introduction of the latest U.S. sanctions against the Russian small arms manufacturer, Concern Kalashnikov, we have seen some blather that this will be of little consequence to Russia. Given the increased effort to market civilian firearms to the United States through RWC Group LLC among other entities, along with the partial privatization of these firearms manufacturers following continued financial difficulties, it is of the best interest of any company to have open trade with customers offering the highest demand for their products. 

Earlier this year Concern Kalashnikov announced plans to deliver 80,000 to 200,000 firearms to the U.S. and Canada per year. The consideration of sanctions from other NATO nations should certainly be taken into account. In response to the latest sanctions, Concern Kalashnikov released an interesting statement, which you will find below. Clearly they have taken their own view point on the issue. We seem to think there is plenty of supply from U.S. firearms manufacturers stateside and from international manufacturers to fill the demands of U.S. consumers. 

Clearly, the Russian manufacturer is offering a specific brand to their popular products, but somehow alternatives will present themselves to fill a gap. Barring any immediate change and not considering other sanctions from the U.S. or other nations, perhaps Russia will look at this action as a mere blip on the radar. However, we are sure the company itself will certainly consider this a huge hit to its bottom line, which decides its viability. Ultimately this will fall back on the state as 51% of its ownership still falls under their control and private shareholders certainly won't be happy with the hit given their recent contributions to revamp a failing business. 

Concern for "Kalashnikov" is part of Rostec (Russian State Company for the promotion of military and civilian weapons) and the United States is an important market for civilian weapons. It should be noted that the production of "Kalashnikov" in the U.S. enjoys high demand, pre-order of civilian products is three times the annual volume of deliveries. Thus, taken in relation to "Kalashnikov" sanctions the U.S. government goes against the interests of American consumers

Concern "Kalashnikov" (formerly NPO "Izhmash") - Russia's largest producer of automatic and sniper combat arms, guided artillery shells, as well as a wide range of civilian products - shotguns, sporting rifles, machines and tools. The company was founded in 1807.

Included in the State Corporation Rostec. "Kalashnikov" United large state enterprises Infantry branch of Russia (NGOs "Izhmash" JSC and "IMZ"). In the future, the concern will include Vyatskie Polyansky Machine Building Plant "MOLOT", KBAL, LN Koshkin. Products are exported to 27 countries, including USA, UK, Germany, Norway, Italy, Canada, Kazakhstan and Thailand. State Corporation "Russian Technologies" (Rostec) - Russian corporation was established in 2007 to promote the development, production and export of high-tech products civil and military purposes. It includes 663 organizations, of which 8 are currently formed holding companies in the defense industry, and 5 in civilian industries. Rostec organizations are located in 60 regions of the Russian Federation and deliver products to market more than 70 countries. Rostec revenue in 2012 amounted to 931 billion rubles ($26.07 Billion), net profit - 38.5 billion rubles ($1.1 Billion). Tax payments to the budgets of all levels exceeded 109 billion rubles ($3.12 Billion). 

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