FIG "Oboronitelnye sistemy" (OS) ("Defense systems") was founded in 1997. The group includes more than 20 enterprises - the state unitary plants and the joint stock ventures where the state possesses control or large share packages. All these plants and design bureaus are engaged in the production of the S-300P anti-aircraft missile systems. The Group's leading company is a joint stock venture with the same name - "Oboronitelnye sistemy" that was founded in 1996.

The predecessors of the current company's shareholders have joined efforts to restore the cooperation on the S-300P anti-aircraft missile system's production. The work on the long-distance anti-aircraft missile system requires the participation of 12-14 plants each of those is the leader in its particular direction and has a long chain of subcontractors. Since the collapse of the Soviet MIC management system there was no need to maintain the structural and production integration because the serial S-300 production for the Russian Armed Forces had been suspended. Nevertheless in 1994 the first contract on C-300 supplies to China was signed and the industrial cooperation had to be restored. In order to accomplish this task "Volkhov.Oboronitelnye sistemy" company was founded. In 1996 it became one of the co-founders of "Oboronitelnye sistemy" joint stock company then in 1997 - a participant of FIG "Oboronitelnye sistemy".

In April 1999 FIG included 34 plants, design bureaus, factories and banks. In January 2000 the company conducted the third share issue and increased its initial capital for 15 times. Some additional serial plants that participated in the production cooperation on S-300PMU became shareholders. At the same time the decision on the forth issue was taken in course of that the OS control share package would be transferred to the state. In return the state is supposed to hand over OS the state-controlled share packages of the plants that participate in the joint stock company. Thus, the Group's central company seeks to get the direct control over the member-enterprises.

In February 2000 Russia and Belarus signed the intergovernmental agreement to create an interstate finance and industrial group of the same name on the basis of Russian FIG OS. Some Byelorussian machine-building plants joined the Group. The Byelorussian producers of control systems, elementary base, guidance and radar equipment are reported to join later.

The profit of the OS joint stock company for the nine month of 1999 was reported to exceed the one in the same period of 1998 for 50 thousand times. In the end of 1999 the company's assets made up around 1 billion rubles. The annual shareholders' meeting decided to direct the most of the profit to R&D and the savings fund.

According to the press, 12 S-300PMU and S-300 PMU-1 battalions in all have been delivered abroad since 1992. It's known for certain that the deliveries were made to China and Cyprus. According to the different estimations, the OS general export volume made up about USD 1 billion in the 90's.

Libya, Syria and India are likely to purchase the S-300P systems in the next years. Supplies of the effective anti-aircraft defense systems to the Middle East Muslim countries, however, arouse counteraction from the side of the USA and Israel that will be ready to put political and economic pressure on Russia if the contracts are signed. One of the most promising opportunities to export the S-300P systems is the program of the South Korean Defense Ministry to deploy a modern anti-aircraft and anti-missile system that will cost USD 1,62 billions. Within the declared tender the Russian S-300 systems compete with the American Patriot and the European SAMP-T systems.

The other actual project is the "Pechora" anti-aircraft defense complex (SA-3) modernization that is being conducted by several Moscow and Sankt-Petersburg design bureaus together with the other Russian and Byelorussian plants under the aegis of FIG "Oboronitelnye sistemy" and "Rosvoorouzhenie". The modernization program increases the complex mobility and its electronic anticountermeasures and upgrades its combat characteristics through the usage of the modern elementary base. It is very possible that OS has a contract with either Egyptian or Indian Armed Forces for "Pechora" modernization to "Pechora-2" version. The SA-3 modernization market is likely to be the major one for OS in the next few years.

I n July 1999 it was reported that a new corporate structure that will produce and develop the S-300P systems was created. The leading company of such structure was "Almaz" scientific and industrial association. The corporation should have combined seven basic structures: constructors of anti-aircraft missile mount, anti-aircraft guided missiles, missile launchers, radar stations, control systems, communication devices and components. The corporate structure was supposed to have a potential to produce 50 complexes a year. Nevertheless, since August 1999 till July 2000 the new corporation neither showed commercial activity nor developed its structure.

In general the prospects of the corporate development on the OS basis looks more preferable because FIG "Oboronitelnye sistemy" has more necessary experience and facilities.