In the post-Soviet era company “Belukha” was one of the largest non-state assets holder in the defense industry of Russia along with ONEXIMbank, Incombank and Oppenheimer investment fund. The Group of companies “Kaskol” holding inherited part of its assets.

Now the Group of companies “Kaskol” integrates the activities of 20 companies that work in aircraft and ship construction industry and also in the field of information and management technologies and foreign trade. The holding includes both famous industrial plants of the former USSR and recently founded firms. Now “Kaskol” has share packages and power to participate in the Board of Directors of the following companies:

The aircraft construction plant “Sokol” in Nizhniy Novgorod (construction and modernization of MiG-29UB and civil aviation equipment)where the holding has 20% of shares according to unofficial information that isn’t confirmed by the Group of companies itself,

• “Rostvertol” (civil and military helicopters Mi-26 and Mi-24), 15% of shares,

• “Gidromash” (Russian monopolist in hydraulics and chassis for aerospace industry), 60% of shares,

• The Central design bureau “Aisberg” (construction of icebreakers and nuclear vessels),

• The Central design bureau “Lazurit”(submarine construction),

• Gorky mechanical engineering plant (nuclear energetics equipment).

The group also includes:

“Vostokvneshtorg” – foreign trade and investment firm. On behalf of the Russian government it discharges the debts of the South-East Asian states to the USSR through buying goods from debtor-states and assists the Russian companies in using their barter shares for import purchase financing. The firm is specialized in import from Vietnam, Indonesia, India, China, Laos, Mongolia, Bangladesh, Pakistan.

“Rostekhimport” – complex equipment of aerospace and mechanical engineering plants with the systems for CAPRE automatic design and CAD/CAM production technological preparation. Among the clients there are Irkutsk aviation industrial holding, “Sokol” plant in Nizhniy Novgorod, APO in Komsomolsk-on-Amur, MAPO “MiG”, MPO in Ufa, Moscow “Salut” MPO, Lukhovitsk mechanical engineering plant.

Sergey Nedoroslev manages the holding’s activities. Sergey Nedoroslev was born in 1963 in Barnaul, Altay region. In 1985 he graduated from Altay State University with the diploma of BS in Physics. He had the assistantship courses on semiconductors and semiconductor-based devises technologies in Moscow Institute of Electronic Technics. In 1988  together with two partners he founded a private company, specialized in software design. In 1994 he founded “Vostokvneshtorg” that was one of the first Russian large private companies on foreign trade and investments. Sergey Nedoroslev is a member of the Board of Curators in Moscow Political Researches School. He is a member of the non-commercial managers and businessmen partnership “Club-2015” that was founded in 1999 as an informal association of the Russian professional managers who represent the different branches of the Russian economy.

Sergey Georgievich, your company is the one of the largest privatized defense industry’s assets holder. What was your motivation when you began to work with in the MIC then you could have got either bigger income or bigger political influence in the fuel and energy complex?

We organized our first private company in the summer 1988 on the base of the law on cooperation draft before the law itself was even issued. We had the time to estimate all advantages and disadvantages of work in the market conditions, work with different industrial branches. Speaking about the MIC the profit wasn’t so important for us as the experience of work with unique people. The MIC always combined the most progressive technologies that means best specialists who created these technologies. The acquaintance even with one of them is a great experience in life. For example I know some people who tightly work with Sergey Pavlovich Korolev. They recall the years spent together with the great designer as the main event in their life. When we started we all were 25 years old and these feelings that weren’t straightly connected with economical motivation, played very important role.

The second vital reason is that we all had technical education. I’m a physic. From the first year in the school I wanted to become a physic. My father was a physic. I finished the physic-mathematical school. From the second year I carried a soldering iron with me. And if the changes in the country hadn’t happened I would have been likely to work as everybody else in the defense industry today.

The money we earned we invested in what we were interested in. It isn't always superprofitable. For example, the sum we spent to buy IAPO shares from “Microdin” was enough to buy a medium oil company at that time. But we didn’t go to the fuel and energy complex, our interests were in other spheres.

Under what principle did you choose assets to buy?

Contrary to the banks that began to buy defense plants’ shares after 1993 when the privatization had started, we already had the big practical experience in work with the MIC by that time. According to their opportunities and resources the banks were buying the most different plants often without understanding what they would do with them further. We didn’t participate in the auctions with checks, didn't buy a single plant for vouchers. It was some crazy market and we didn’t want to take part in it. We bought everything on the secondary market.

We worked with many plants and exactly their shares we started to buy after they had been consolidated. In the first turn there were the plants of aviation and ship construction industry. It doesn’t mean we bought the shares of all plants we worked with. The opportunities to attract resources were limited so we had to choose carefully. For example, it were the shares of Irkutsk aviation industrial holding. Though we were forced to sell our package later, I still think it’s one of the best aviation plants in Russia. It’s situated well, plus it has very strong and skilled management: such remarkable and reliable managers as Gorbunov, Fedorov, Kovalkov, Vasilenko and the others have already worked there at that time.

Do you think that the Group of companies “Kaskol” has finished to acquire the shares of defense plants?

No, we are still interested in the number of plants but sometimes we leave plants. For example, we decided to sell our shares in IAPO because we think that the cooperative behavior is more rational than the confrontal one. On the other hand, leaving IAPO we increased our package in “Sokol” in Nizhniy Novgorod from 5 to 20%. After we had sold the shares of Voronezh aviation industrial holding and “Aviastara”, we increased our package in “Gidromash” from 5 to 45%.

Our plants have the unique production experience and the unique technologies. When we bought the first shares of “Gidromash”, the plant wasn’t exporting a single detail. Now 85% of the production go abroad. Today there isn’t a single West-European “Airbus” that hasn’t at least one our detail. We work on this project with pleasure because Airbus Industry traditionally has strong marketing and sales. In our turn we ensure the resolving of the high-degree difficulty production tasks. Some times ago “Gidromash” made chassis for “Mriya”, the heaviest plane in the world. Nobody in the world has such experience in construction of chassis for such class and takeoff weight planes.

Did you have portfolio investments?

No, we had no portfolio investments at all. When we were buying “Gidromash” from a very famous company that mainly deals with portfolio investments they were very surprised by our choice. They offered us to buy one more plant that produced fireproof bricks. Large sales. The capitalization was ten million dollars. Net profit after the taxes are paid – 20 million dollars. But we refused because it didn’t match  our profile.

Where do you take loan facilities?

First of all we invest our facilities. We always created additional value and invested it. Besides we always found investors, interested in the real production.

Tell the story of your company from the moment of its foundation.

The Group of companies “Kaskol” totally includes more than twenty companies. Originally there was “Altan”. It still exists now. We founded this company in 1988. One of our first work was the order of Altay scientific research institute of cattle breeding to create a mathematical software. They had a contract for million rubles, at that time it was big money – the cost of two nine-floor apartment buildings. We accomplished this task for them and got one tens of the work cost – one hundred thousand rubles while our official salary in the University was 120 rubles.

After that we founded the number of the companies, everyone of those is known in its own way. For example, “Vostokvneshtorg” is the leading company on Soviet era debts discharge. It has its representatives in Laos, Vietnam, India. The company also accepts payments for armaments supplies as debt discharge.

“Rostekhimport” successfully competes in its sphere. This company installed CAD/CAM/CAE system in “Sukhoy” plants in Komsomolsk and Irkutsk and other plants.

The property division in the fuel and energy complex was accompanied with fierce bank competition. In aluminum industry it turned to battle operation. Where wasn’t there anything similar in th MIC?

That’s exactly what we have talked about in the beginning. The cruelest wars are conducted for alcohol beverages booth site in Kurskiy railway station. You can be shot from “Shilka” here. In the MIC the well-bred people work what makes such wars impossible.

Do you need support of the state to work in the MIC or do you believe in the liberal principle – less state regulation is good for a businessman?

Yes, we need support of the state. But we use another meaning of this term. I have objection when the state gives money to those people who don’t create additional value but use valuable resources. Those very people more often cry: “Give us one hundred million dollars immediately!”. They will waste it as they have already wasted billions of dollars that the country had.

We create additional value and we need the support from the state. But first of all we need a government’s program that considers the high-tech production peculiarities. The tax issues also need different approach.

How do you imagine the integration of the Russian industry including the defense one into the world economy? What place will Russia take?

Both the Russian economy and industry are integrated into the world economy for a long time. I’ve already mentioned the cooperation between “Gidromash” and Airbus Industry. I can name dozens world-known companies more that work with us. But perhaps something else should be mentioned.

The country’s leaders, large industrial holdings, branch associations must join their efforts and coordinate all its interests to reach the strategic goals. To my mind, the active expansion to the foreign markets can become such a goal in the field of civil aviation. The well-prepared strategy is needed here because we will never succeed only because of the MIC. The export military equipment supplies should cut overhead expenses of the civil aviation. Probably it’s time to think about creation and market promotion of a unified trade mark for the civil aviation that will join all our resources and attract for cooperation such countries as India and China. Then, perhaps, we could try to compete with “Boeing” and “Airbus”.

The creation of the turboprop passenger plane “Saras-Duet” for local flights in the frames of the joint Russian-Indian government program can be mentioned as the successful example in this field. This is a break in the concept of the governments cooperation. For Russia it doesn’t mean only great opportunities for expansion to the civil aviation market of India, but China, Iran and other Asian countries as well. Speaking about international projects it should be remembered that people but not countries work on projects. If Vladimir Ilich Luzyanin hadn’t visited the DASA vice-president and agreed on the international A3XX project Russia would have never participated in it. If Luzyanin and “Gidromash” have a global project that means Russia has it. That’s why it only depends on everyone of us what place Russia will take in the world.