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Kirov Plant JSC

Kirovski zavod (Kirov Plant)
Kirovski zavod (Kirov Plant) 
Location(region):  St. Peterburg 
Branch:  Engineering 
Post address:  47, Stachek ave., Saint-Petersburg 198097 
E-mail:  KZ@KZ.SP.RU 

The Kirov Plant Joint Stock Company is a major producer of tractors and steam turbines for both the military and civilian markets. It has also designed and produced tanks for the military. It is a vertically-integrated association that also produces its own steel, its own sheet metal, and its own forgings and stampings. The main component of the Kirov Plant Production Association is the Kirov Plant proper, the largest and oldest industrial complex in St. Petersburg. Other components of the Kirov Plant Production Association include and the Transmash Plant in Tikhvin. The Kirov Plant ceased producing tanks in November 1991. It continued to produce turbines, tractors, construction machinery, and rolled steel. Tikhvin produces castings, as well as machinery, spare parts, and consumer goods.

Leningrad Kirov Plant (formerly Putilovsky, in 192234, "Red Putilovets"), was one of the largest machine-building and metallurgical enterprises of the USSR. Produces powerful agricultural, industrial and skidding tractors, turbo gear units for merchant ships, a lot of other technically complex machines and mechanisms, high-grade steel and rolled products and other products, including consumer goods. The plant was founded in 1801 as a state-owned iron foundry, which produced artillery shells. In 1868, engineer N.I.Putilov bought it and organized the production of rails on it. By the end of the 19th century the plant turned into a large metallurgical and machine-building enterprise in Russia with 4 types of production: metallurgy, car building and locomotive engineering, artillery and shipbuilding.

The history of the Kirov Plant reflects the development of Russian industry and the state itself. Since its foundation, the company has been an active participant in key events in the history of Russia. The skill, professionalism and the highest authority of the company's team were determined by the fact that in different historical periods the Kirov factory was always at the forefront of industrial development of the state, implementing the most important orders in the field of agricultural, construction and power engineering.

The Kirov plant has always been famous for its high scientific and technical potential: in different years, many well-known scientists and engineers worked around the world. People such as I. M. Zaltsman (1905-1988), director of the plant in 1938-1945; J. Y. Kotin (1908-1979), head of the design bureau, chief designer of the Kirov plant in Leningrad and Chelyabinsk in 1937-1968; MA Kazak (1908-1998), chief designer of ship steam-turbine installations; N. Popov (19312008), chief designer of the Kirov Plant in 19681991, and many others ensured the reputation of the flagship of the Russian industry for the Kirov Plant.

In 1992, the Kirovsky Plant was one of the first state-owned Russian industrial enterprises to be transformed into a joint-stock company. In the years of perestroika, in difficult socio-economic conditions, the enterprise carried out the conversion of the defense complex and the restructuring of financial and economic activities, which played a fundamental role in the transition to market relations. Production was reoriented to the release of new competitive equipment that is in demand in the market.

For the first time in the country, on the basis of industrial tractors K-702 and K-703, a line of special machines for road construction, oil and gas industries was created. The production of Onega and Ladoga armored vehicles, Maral forage harvesters, Tundra high-speed trenching machines, wheeled-tracked chassis, self-propelled crawler cranes, etc. was mastered. In 2000, the K-744R model line was launched; serial tractor of the Kirov agricultural plant. Along with the legendary seven hundred, they currently form the basis of a fleet of heavy arable tractors of most Russian agricultural enterprises, perform up to 40% of the main agricultural work and provide year-round solutions to many transport problems in the countryside.

The Kirov Factory is is also known as the Leningradskii Kirovskii Zavod (Kirov plant), AO "Kirovskiy zavod," and PO "Kirovskiy zavod." The Kirov Plant Production Association is a major producer of tractors and steam turbines for both the military and civilian markets. It is a vertically-integrated association that also produces its own steel, its own sheet metal, and its own forgings and stampings.

The main component of the Kirov Plant Production Association is the Kirovskiy mashinostroitelnyy i metallurgicheskiy zavod (Kirovskiy Znamya Oktyabr zavod, Kirov Plant), the largest and oldest industrial complex in St. Petersburg. Other components of the Kirov Plant Production Association include the former All-Union Scientific-Research Institute of Transport Machinery (VNII TRANSMASH) in Gorelovo and the Transmash Plant in Tikhvin. It continues to produce turbines, tractors, construction machinery, and rolled steel.

The Transmash Plant in Tikhvin produced castings, as well as machinery, spare parts, and consumer goods.

Like other companies in Russia's machine-building and metals industry the Kirov factory suffered a steep decline in output after the demise of the Soviet Union. Formerly the factory churned out tens of thousands of tractors a year for the country's collective farms, paid for by government credits, and processed large state orders for the defense sector. However, in the 1990s the company went through a major transition, downsizing some production facilities and restructuring others. In that process the output of tractors plummeted from 25,000 a year in the late 1980's and 16,000 in 1992 to 1136 in 1994 and 850 in 1995. During the same period the company shed most of its 30,000 strong workforce and by th emid-1990s employed some 8300 workers.

The factory, however, increased its output of steel and rolled products through the subsidiary Petrostal that produced 294,000 tons of crude steel in 1996 (10% above its 1992 output), one-third of which was exported. Steel production accounted for around 50% of the Kirov factory's revenues; but the company was also seeking out potentially lucrative niches in the production of small tractors and sweepers, busses and armoured vehicles, as well as equipment for the country's oil and gas sector. The factory hoped to export an increasing share of its production of small tractors and sweepers to European markets.

Among the Kirov factory's projects is the joint production with General Electric of turbines to be used in Gazprom's pipelines. The company expected to receive orders for equipment from the oil industry: the state oil holding Rosneft holds a 4% stake in the factory that also enjoys close relations with another oil major, Yukos.

Given its location in one of Russia's most dynamic regions, its powerful corporate and political backers and the steps it has taken to re-focus production the Kirov factory is well-placed to benefit from the upturn in the Russian economy expected from late 1997 onwards. The company is not yet through its painful transition, but the overall positive trend in company performance makes the Kirov factory an interesting investment consideration for the medium term.

The Kirov factory was privatized in 1992; its charter capital consists of 8,149,005 shares of common stock and 2,176,335 shares of preferred stock each with a par value of 100 rubles. The company's stock is traded on the electronic RTS-2 system.The single largest shareholder as of late 1996 was the St. Petersburg Promstroibank that held a 13.8% stake.

The Company saw its sales increase by around one-third in 1996 to reach 1.12 trillion rubles ($218.15 million) up from 740 billion rubles ($161.9 million) in 1995. The 1996 figures pointed to continued stabilization at the plant after it reached a low point in 1994, with sales of just 200 billion rubles ($83.4 million). Company management expects the positive trend to continue in 1997: under this year's business plan the Kirov factory intends to increase output by almost 17% and boost ruble sales proceeds by 22% to 1.37 trillion rubles; a projected increase of some 5-7% in real terms.

Caterpillar's construction of a company factory in the city of Tosno in the Leningrad region was scheduled for completion in December 1999. The project was launched in August of 1998, and the investment plan included $50 million. The Tosno plant will manufacture road building and excavation equipment with a projected capacity of 1,500 machines and 14,000 tons worth of spare parts a year. By all indications, joint-venture arrangements have failed to achieve goal because requirements set by foreigners exceed the resources and capabilities of Russian partners. Caterpillar's experience of establishing joint ventures with the Kirov Plant, Uralmash and ZIL serves to prove it. Caterpillar has preserved very friendly relations with these enterprises, but decided that its goal can be reached faster by building a new facility from scratch.




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