United Engines fleshes out restructuring plans

This story is sourced from Pro
See more Pro news »

Russia's United Engines (UEC) has finalised its internal restructuring plans with the stated aim of optimising its product line and ramping up output volumes.

The new organisational structure hinges on grouping assets and business processes together around distinctive products, it says.

In 2012, United Engines' parent Oboronprom endorsed the principle that its business units should act as directorates handling particular enterprises under the common umbrella rather than standalone legal entities.

"To this end, we've thoroughly spelled out functions which should be performed by management companies and manufacturers," says UEC director general Vladislav Masalov.

"To date, four directorates have been formed. Alongside industrial engines, separate business units are dedicated to the aeroengine production for civil airplanes, rotorcraft and military aviation."

UEC is also considering setting up a fifth directorate which will be focussed on producing engine components. Masalov says it has designated the Perm-based manufacturer Star as its core.

In addition to production facilities, each of the business divisions holds sway over appropriate engine design and maintenance organisations.

Formerly independent production plants have abandoned commercial activities of their own.

"One of their key tasks is to work out a debt restructuring plan for the entire corporation," says Masalov, acknowledging that combined debts of the constituent enterprises surpass their annual sales revenue.

Last year, UEC earned 27 billion roubles ($885 million) in proceeds mainly stemming from state orders. Masalov expects this value to increase by at least 15% in 2013.