Kalashnikov CEO answers some questions...

[whitewolf001]

Kinda neat, I had always assumed that Molot was under Kalashnikov Concern but it is actually it's own separate entity. I'll post the contents of the article below. Admins, if you feel this needs to go elsewhere, by all means relocate it. ^_^

 

http://www.thefirearmblog.com/blog/2015/04/08/exclusive-alexey-krivoruchko-the-ceo-of-the-kalashnikov-group-has-answered-your-questions/

 

The Kalashnikov Group

Little is known about the Kalashnikov Group business/legal structure in the West. What we know mostly comes from poorly translated mainstream news articles. Can you please explain the relationship between Kalashnikov Group, Kalashnikov Concern, Baikal and Izhmash? Are Kalashnikov Concern, Baikal and Izhmash separate legal entities or sub-brands of Kalashnikov Group?

In 2013, based on the decision of the State Corporation Rostec Kalashnikov Concern (NGO “Izhmash”) was renamed into Concern “Kalashnikov”; and that same year Rostec leadership decided to transfer 49% of the “Kalashnikov” to private investors. A group of private investors (shareholders) are represented by me and co-owner of “Kuzbassrazrezuglja” and “Transmashholding” Andrei Bokarev.

To implement the transaction Rostec issued additional stock, so that our investments were made directly into the share capital of the Kalashnikov Group and went to the company’s development right away. Today, the main goal – to increase capitalization and profitability of the enterprise, to ensure the sales growth.

In May 2014 a deal to transfer 49% of the company’s shares to private investors was completed, a majority – 51% – remained within the state corporation (Rostec). At the same time, by agreement of shareholders, the control over the management of the Concern always stays with the private shareholders. Therefore, despite the fact that the state has remained a controlling stake owner, the management structure of Kalashnikov today is of a private company. We are currently discussing a repurchase of additional 2% of the shares from Rostec and receiving a controlling stake in JSC “Kalashnikov Concern” by private shareholders.

The model of public – private partnership is one of the most effective for the management of industrial enterprises and it allows us to implement large-scale projects.

Within the framework of our rebranding, which was done in December 2014, a new corporate brand of Kalashnikov was presented, as well as updated product brands for the combat Kalashnikov weapons, Baikal hunting weapons, and sports line – Izhmash, which are now part of our brand portfolio.

Where does Molot fit into the Kalashnikov Group?

We considered a possibility of acquiring assets of Vyatsko-Polyansky Engineering Plant “Molot” but after an audit, we decided to abandon the acquisition of the assets.

Izhmash used to manufacture automobiles, machinery and tools. Does Kalashnikov now manufacture these types of products?

In addition to the production of small arms for military and civil purposes, we are engaged in the production and testing of precision-guided artillery shells and remotely controlled combat units (MBDU), test machines, machine tools and high-quality tools.

Since the formation and Kalashnikov Concern and the Kalashnikov Group, has manufacturing been consolidated? If so, what factories have closed down?

Kalashnikov Concern was created on the basis of NGO “Izhmash” and is the parent company of Rostec’s small arms holding. There were no closings of any plants.

We were all very sad at the passing of General Mikhail Kalashnikov. Up until his death, how involved was he with Izhmash? Did he regularly visit the factory?

A winner of numerous big honors and awards, Mikhail Kalashnikov for over 60 years continued to work at the Izhevsk plant, which is now honored to carry his name. The Kalashnikov assault rifle and its variants are the most commonly used small arms in the world. In 60 years, more than 70 million Kalashnikovs of various modifications were produced. While ailing in the recent years, Mikhail Kalashnikov continued to work for the Group, took an active part in its creation and assisted in the development of new weapons.

АК-12

Is the Russian military going to adopt the AK-12?

The adoption of the AK-12 for the Russian military needs to be addressed by the military forces; we – as producers of the weapons are ready to fully meet the needs of all government orders. I might add that the final decision on the adoption of the AK-12 for the needs of the Armed Forces of the Russian Federation and the beginning of its serial production will be made before the end of 2015 based on results of some trials by the military.

The AK-12 has strong competition from the FN SCAR, H&K HK416 and Beretta ARX-160. What advantages does the AK-12 offer over these rifles?

Other things being equal in terms of technical parameters, the price of an AK-12 is significantly lower than the competition.

When designing the AK-12, we managed to significantly improve the characteristics of the gun and adapt it to modern conditions of warfare, while preserving the unique characteristics of the Kalashnikov system: simplicity of design, high reliability, operational rigidity, and relatively low cost of production.

The AK-12 has a new set of iron sights with an increased sighting line and barrel with improved performance due to the higher precision of manufacturing. These innovations will improve single-shot fire efficiency.

To improve accuracy, the dynamic characteristics of the automatic action and shape of the stock were changed. One of the most anticipated innovations in the AK-12 design was the slide stop. This feature significantly reduced reloading time of the weapon, and the AK-12 automatic rifle also received a new ergonomic pistol grip.

Among other significant innovations is the new trigger mechanism. The AK will now operate in three modes of fire: a single-shot mode, a 2-shot burst mode and a fully-automatic mode. Due to its construction and design features it has better accuracy than other AK rifles and its accuracy in semi-automatic mode is on par with the best foreign small arms.

The fifth-generation Kalashnikov assault rifle has become adaptive for additional equipment. The design of the AK-12 has integrated Picatinny rails, which can be used to mount a wide range of sights: optical, reflex and night sights, grenade launchers, flashlights, designators and visible and infrared lasers. All this allows to effectively use the AK-12 at any time of day and in any climate.

The AK-12 is equipped with a new muzzlebrake, which allows it to shoot rifle grenades made by foreign manufacturers, and install a tactical silencer. The barrel has better accuracy and quality of workmanship than its predecessors. The charging handle on the AK-12 is located in the front part of the operating rod, and can be switched to the left side of the gun. This design made it possible to remove the gap between the dust cover and the receiver.

The AK-12 will be the base platform, which will allow further modification for various law enforcement agencies, as well as to produce variants of the assault rifle for use with a wide range of cartridges.

When will Kalashnikov develop a consumer semi-automatic version of AK-12?

Along with the start of mass production of the AK-12, at the beginning of 2016 we will start the production of the civilian version – rifles based on the AK-12.

TFB Reader Hebizuka asks: What are the different variants of the AK-12 that Kalashnikov is currently marketing? (What I mean is what different configurations such as calibers, barrel lengths and other configurations such as with suppressors etc.). [Photo of the AK-12 in different unique configurations would be fantastic].

Yes, we are developing a number of variants of AK-12. In particular, we are talking about the military and civilian versions.

We have heard that a 12 Gauge version AK-12 will be developed, or has been developed, by Kalashnikov. Is this true? If so, when will it go into production? [If you can provide photos of any prototypes, they would be greatly appreciated].

We already have a 12-Gauge shotgun, which is already superior to other analogues and has no competitors for 3-Gun and practical shooting. In particular, we are talking about the Saiga-12 version 340. During its development, requirements of special forces, as well as competition shooters were taken into account. The new gun differs from its predecessors by an increased magazine capacity of 10 rounds, reinforced receiver, as well as a new magazine release mechanism and a new muzzlebreak that significantly reduces the recoil.

Has Kalashnikov had interest in the AK-12 from Law Enforcement?

Yes, the interest in this gun is very strong, including the law enforcement agencies from other countries, which are waiting for the results of the state-run tests. Increased levels of reliability of the weapon allows it to be used by both police and army units.

Other Kalashnikov Group Products

We have heard that Kalashnikov is developing a brand new 6.5mm rifle cartridge? Are you still developing this product? Can you share any information about it with us?

Of course, we are working on this at the Concern, but as these are developments for the Defense Ministry, we are not supposed to discuss these details.

In the United Kingdom semi-automatic rifles are banned. UK and USA AR-15 manufactures have developed manual-operatated/bolt-action AR-15 rifle to export to markets where semi-automatics are banned. Does Kalashnikov have plans to develop a manual/bolt-action version of the AK? 

We already developed a bolt action version of most of our Saiga rifles, they are available on special order and are sold worldwide.

TFB readers Riot & Garrett ask: Does Kalashnikov have any plans to develop a modern replacement for the SVD? In the West we have heard only a little about the SVDM and SVDSM, are these still being developed?

Yes, there are such plans. We have a number of projects to build several models of semi-automatic sniper rifles. Currently modernized 7.62 mm Dragunov sniper rifle – SVDM has passed state-run tests and we are preparing for the mass production.

At the Moscow ARMS & Hunting 2011 expo, Molot exhibited AR-15 rifles. Does Molot still manufacture AR-15 rifles? Has Kalashnikov considered manufacturing AR-15 rifles for the Russian market or for export?

No, there is no need for that.

TFB Reader Zugunder asks: Does Kalashnikov plan on developing a long-range marksman version of the AK-12, or a Light Machine Gun version?

We are doing such work and next year we plan to show such gun. But it won’t be based on the AK-12 platform. 

TFB Reader Iksnilol asks: Does Kalashnikov have any plans for a modernized, lighter PKM? For example similar to what the Americans did with the M240B (they made a lighter version of it using titanium and aluminium in areas that didn’t require steel).

We are actively looking for opportunities to use new materials in the manufacture and the use of plastics, which can help reduce the weight of our weapons.

TFB Reader Kev asks: Is Kalashnikov still developing the AK 107 and AK-108 concept with a balanced recoil system? Does Kalashnikov still plan on manufacturing a Saiga MK 107? Is Kalashnikov, or any other Rostec corporations, developing a smart semi-automatic grenade launcher such as the US military’s XM-40?

Currently, self-loading rifled carbine Saiga MK-107 (5,56×45 caliber) – is one of the key projects of Kalashnikov for the market. We are actively working on upgrading the rifle. We plan to present a new variant at the end of this year, and a sporting version for practical shooting will be announced at the European Practical Shooting Championship in Felsotarkani (Hungary, June 21-26).

Saiga MK-107 is a unique weapon with balanced recoil system, it virtually eliminates the effects of recoil. The main advantage of this model is that there is no shock impulses from the moving parts in the extreme positions, which makes it possible to make accurate and quick multiple shot strings.

TFB Reader Dave asks a question that has had many of us in the West debating for many years: Could you share with us the details regarding the Shellac applied to the laminate wood used on Kalashnikov guns in the past? What kind of Shellac was used? Did the factory add dyes or pigment into the shellac? Was the wood coated in a preservative before applying the Shellac?

[ Steve says: Kalashnikov are investigating this and will answer it  when and if they can find the necessary historical information. ]

Sanctions

Has Kalashnikov had to lay off any works because of sanctions?

No, no one had to be laid off. Despite the sanctions at the end of 2014 Kalashnikov almost doubled the production of small arms and in 2015 we plan to further increase it by at least 20-25%. This requires skilled workers. Staff growth at the Concern in 2014 was 14%, in 2015 we plan to increase core staff by 10%. There are no plans for layoffs.

Does Kalashnikov expect the US sanctions will be dropped within the next two or three years?

The sanctions affected not only the Concern, but also foreign buyers of our products. We hope that the sanctions will be lifted and the Concern will be able to return to the US market. Especially since now there are new products that we announced: the balanced automatic carbine Saiga-107, carbine Saiga-9 and self-loading shotgun Saiga-12, which evoked great interest among American consumers.

It should be noted that our products are in great demand in the United States, with pre-orders for civilian-use products more than three times the annual volume of deliveries. The sanctions against the Concern contradict the interests of American consumers. Americans themselves admit that they are very upset with this situation: They love Russian weapons and want to be able to get them.

It should be noted that it is important to buy authentic product – from the original manufacturer. Our partners tell us that some Asian manufacturers have budget versions of the AK, which cost about $ 60, they cannot withstand even 70 shots, and fall apart, and the first question that is asked by these vendors during negotiations about a wholesale order of AKs is the following: “How many times you want it to be able to shoot”? At the same time, we as manufacturers of weapons with more than 200 years of history, cannot afford any compromises in terms of quality and reliability. The life span of our barrels is 10,000 shots without sacrificing accuracy, plus an “additional” 6,000 shots that we do not show in the warranty documentation, but steadily show at tests and in trials.

Has the Russian government helped Kalashnikov because of lost revenue from the sanctions?

Kalashnikov does not receive any grants or subsidies from the state.

Do US sanctions also apply to Baikal products?

Not legally, and we hope this does not change.

Kalashnikov and the USA

TFB Reader Fracsid and Steve ask: What is the relationship between Kalashnikov USA and Kalashnikov Concern?

The fact of the matter is that RWC company for several years has been the exclusive distributor of Kalashnikovs in the United States. After the imposition of sanctions the business of importing Russian-made weapons manufactured by the Concern was suspended.

To date, because of the imposed sanctions, the company has no rights to continue to cooperate, and even to contact representatives of Kalashnikov Concern. These measures only cause regret and impact primarily American consumers.

The contract with RWC signed in January 2014 for 5 years outlined delivery of up to 200,000 weapons per year. It is clear that RWC is interested in maintaining the US market share; that is why they filed an application for trademark registration.

Previously, the company announced independent production of Kalashnikov assault rifles in the United States. It was also reported that they established a “Kalashnikov US” corporation. The decision to create “Kalashnikov US” and begin production of Kalashnikov assault rifles in the United States was made by RWC independently. There was no consulting between RWC and Kalashnikov Concern.

For further action on the part of the Kalashnikov Group, including on the issue of similarity of the brand names, consultations are underway with lawyers and experts in the field of international law aimed at analyzing and monitoring the situation.

The situation is complicated by the fact that the rights to produce Kalashnikov rifles were issued to a number of countries, including the United States, in the 1970s, and by the elapse of time they have lost their validity. Since the 1990s the issue of protection of intellectual property and the trademark of Kalashnikov was not dealt with, and as the result, the brand found itself in a catastrophic situation from a legal point of view.

At the moment, we have started the process of trademark protection, but it is a long process intertwined with numerous litigations. In the US, the trademark had not been registered, and due to the anti-Russian sanctions, the process of registration in the United States was suspended.

It is worth noting that a similar situation exists around the American machine gun AR15, better known as M16, which is used as common stock by the US Army. The license to manufacture this rifle was issued to a number of countries, and despite the fact that it expired, it is still being produced in over 30 countries around the world.

These issues are difficult to overcome, and one of the tools is the production of innovative products, which will be drastically different from competitors.

Our company is already actively working on modernizing the line of produced weapons.

Cooperation with RWC, as mentioned above, as well as any business negotiations are currently impossible due to the sanctions.

TFB Readers David & Gary ask: Does Kalashnikov Concern/ Kalashnikov USA plan on manufacturing the AK-12, PKM, Bizon or MP-446 Viking in the USA?

We are not planning it; due to the sanctions it is impossible. Although, if the sanctions were not the issue, it would be very relevant, since we know that many consumers in the US would be interested in such products. For example, in the new handgun, which Kalashnikov Concern is preparing to produce. In May, we will be able to reveal photos of our new product specially for The Firearm Blog.

The Future

 Does Kalashnikov have any plans to start manufacturing accessories (such as magazines, optics, stocks, pistol grips etc.) for the civilian market? 

Yes, there are such plans. We will produce accessories for all kinds of weapons produced by us, including the entire range of civilian weapons.

In particular, for the Russian Defense Ministry, we have already developed modernization kit for AK series of rifles that features a number of upgrades enhancing the weapon’s capabilities including Picatinny rails on the handguard and dust cover allowing secure mounting options for different types of modern day and night scopes, red dots and infrared lasers, so the rifle could be used effectively in low light conditions, an upgraded stock, a new sling and a new safety selector that will significantly improve the ergonomics of the weapon.

- See more at: http://www.thefirearmblog.com/blog/2015/04/08/exclusive-alexey-krivoruchko-the-ceo-of-the-kalashnikov-group-has-answered-your-questions/#sthash.QC8tOcH5.UT9c6b1E.dpuf