Perm Engine Company Managing Director Alexey Mikhalyov meets with Russian Prime Minister Vladimir Putin

This past Saturday, February 4 in Perm, Russian Prime Minister Vladimir Putin held a meeting with managers of the Perm region’s biggest economic drivers. The meeting included Perm region Governor Oleg Chirkunov, Russian Presidential Envoy to the Volga Federal District Mikhail Babich, and the directors of 13 strategically important regional companies including: Perm Engine Company Managing Director Alexey Mikhalyov, Managing Director and Chief Designer of Aviadvigatel, Alexander Inozemtsev, Metafrax board chairman Armen Garslyan, Motovilikhinskie Zavody general director Nikolay Bukhvalov, Proton-PM general director Igor Arbuzov, LUKOIL-PERM general director Alexander Leifrid, and others.

As part of the meeting, Vladimir Putin discussed current economic developments with the industrialists, and emphasized that the choice of the Perm region was anything but accidental: “The economy of the Perm region is a microcosm of the whole Russian economy. You have everything here — an agro-industrial complex, machine-building, aviation, chemicals, and extraction and advanced processing of hydrocarbon resources.” During the meeting, the corporate representatives raised questions of cooperation with federal ministries: the procedures and principles of placing state orders, and state financing on federal industrial support programs.

Alexey Mikhalyov, managing director of Perm Engine Company: “This meeting with Russian government officials was a sort of check-up with the industrialists on all key areas of cooperation with the government. This is very important, because the working relationship between strategic enterprises — such as PMZ — and the government directly impacts the placement of orders, and the wellbeing of tens of thousands of employees.

But the most important thing is that the government’s industrial policy is aimed not only at supporting the sector, but also at innovative development, bringing out new products, with which we can really compete in the global marketplace. This is why the full scale of the transition currently underway will only be appreciated in 10-15 years. This will be possible provided a continued steady course of targeted support for machine-building, which will be realized in our country over the next 12 years.”

Based on the results of the meeting, the prime minister decided to organize in the Perm region a conference with the heads of federal ministries and authorities to coordinate joint efforts and solve key issues of state support for the development of strategic sectors in the Russian economy. And on Monday he directed the Finance Ministry and the Ministry for Industry and Trade to examine the question of financial support for Aviadvigatel, the developer of the fifth-generation PD-14 aviation engine, the main producer of which is Perm Engine Company.

Russian Prime Minister Vladimir Putin: “We will be able to create an entirely new product, absolutely competitive on the global market, a new aviation engine. The work is progressing, progressing on schedule. There are problems that companies encounter, and then they need support [...] In machine-building, let’s say, attracting the resources that we are currently putting into development, has its limitations. We here all understand that in machine-building, they have to get 50% of these funds themselves, and in this sector they just don’t have it. And on the whole I agree that this bar could be lowered. They could use our money and their own small resources to turn a project around, and then start the returns once the product hits the market. But this requires additional thought, I completely understand that. Here we need the Finance Ministry and the Ministry for Industry and Trade to work together.”

Aviadvigatel is a leading Russian design firm developing gas turbine engines for aviation and industrial applications.

Perm Engine Company (PMZ) mass produces aviation engines for civil and military applications, as well as industrial gas turbine units for power stations and gas transportation.

Aviadvigatel and PMZ are a part of the United Engine Corporation, a wholly-owned subsidiary of OBORONPROM specializing in engine-building assets.

OBORONPROM is a multi-faceted machine-building group of companies, founded in 2002. It is part of the Russian Technologies group of companies. Its primary activities are helicopter building (Russian Helicopters) and engine-building (UEC).