Volgogradskiy Metallurgicheskiy Zavod Krasny Oktyabr (
Russian: Закрытое акционерное общество "Волгоградский металлургический завод "Красный Октябрь",
romanized: Zakrytoye aktsionernoye obshchestvo "Volgogradskiy metallurgicheskiy zavod "Krasny Oktyabr") is a Russian closed
joint-stock company which maintains the Krasny Oktyabr factory, one of the largest Russian
metallurgy facilities.
In 2007,
Rosoboronexport gained control of Krasny Oktyabr through its subsidiary Russpetsstal which purchased a 100% stake in Krasny Oktyabr from the
Alex Shnaider (
Russian: Алекс Шнайдер) and
Eduard Shifrin (
Russian: Эдуард Шифрин) associated
Midland Group.[4][5] In 2007 under advice from
Troika Dialog and its managing director
Sergey Skvortsov,
Sergey Chemezov, who was the General Director of
Rostec, formed one holding for all enterprises manufacturing special steels and alloys.[1] On 28 November 2007, Krasny Oktyabr under general director
Sergey Nosov (
Russian: Сергей Носов) was placed in a holding CJSC Russpetsstal (
Russian: ЗАО «Русспецсталь») which RosTec, a firm which was formerly known as
Rosoboronexport until 25 November 2007, held a 25.1% stake through its subsidiary Promimpex (
Russian: «Промимпекс») and a 50% stake was held in two
Cyprus based firms Lacoveta Management and Briefway Trading, and a 24.9% stake was held by the
Guernsey based Midland Steel Industries Limited.[6][7] For financing both JSC Russpetsstal (
Russian: ОАО «Русспецсталь») and CSJC Russpetsstal in the holding Russpetsstal,
VTB provided 1.7 billion rubles in early 2007 and 1.96 billion rubles at the end of 2007,
Sberbank provided almost 2 billion rubles in 2008-2009 in addition to the 1 billion rubles that Krasny Oktyabr obtained from Sberbank in 2006,
Gazprombank provided 1.8 billion rubles in 2008, and
Bank Rossiya provided 1.3 billion rubles to
Ступинская металлургическая компания [
ru] (Stupinskaya Metallurgical Company) which was held by JSC Russpetsstal.[6]
2009 Bankruptcy
The company entered bankruptcy proceedings in 2009 with
Andrey Akimov as interim director.[8][9] In 2013 it came under the ownership of
Dmitry Gerasimenko.[10][a] In November 2016, Gerasimenko was detained in Cyprus on fraud charges, over the alleged theft of a $65 million loan from
VTB Bank.[8][10][12] Gerasimenko believed that representatives of
Uralvagonzavod and
Oleg Sienko, who was the general director of Uralvagonzavod, represents Rostec, and is a protege of
Sergey Chemezov, were involved in stealing the proceeds from the loan before the funds were received by Gerasimenko and Krasny Okyabr.[13] In 2016, Sienko stated, "In fact, all the profitability that we have goes to servicing the loan portfolio."[14] In March 2017, Alexander Potapov (
Russian: Alexander Valerievich Potapov) replaced Sienko as head of Uralvagonzavod due to financial abuse.[15]
For his freedom from incarceration, Dmitry Gerasimenko "sold" the plant, which was in bankruptcy proceedings, to Pavel Krotov in late November 2018.[10][b]
2018 state-backed financial rescue
The plant was preserved in 2018 with government intervention. A subsidiary, Volgograd Drilling Equipment Plant was restarted in 2020. After six years of inactivity, the company is reviving.[17] VZBT retained its main activity - the production of drilling rigs.[18]
The stainless steel production was 34093 tons in 2020, compared to 2019, which was 26281 tons.[19]
Production delays
During the
War in Ukraine, "the full development of the factory is hindered by a large number of debts, including to commercial banks" causing financial difficulties which disrupted production at Krasny Oktyabr and Uralvagonzavod so significantly that, in 2019, the 2013 order for pressure reactor containers for nuclear powered submarines was not completed, and the 2012 order for the initial 132
T-14 ArmataMBT or 44 tanks annually, which were to be delivered in 2015 for experimental testing, had not been fulfilled but instead Uralvagonzavod "will supply only 16 vehicles by the end of 2019" or later and would not complete the initial order until after 2021 or later.[14][15]
Submarines
In late November 2017, only three of the eight pressure reactor containers for Russian
nuclear submarines could be delivered in May 2018 on time from a 2013 order. The remaining delivery of the other five hulls was frozen. Because of ongoing financial difficulties, Krasny Oktyabr had reduced its work force from 5,200 employees in December 2016 to less than 4,000 in October 2017 and then to only 800 with a 20% to 30% reduction in salary and pay. Both Dmitry Gerasimenko and his mother Svetlana Gerasimenko, who lives in
Dnepr, are Ukrainian citizens.[11]
Malachite armor for T-14 Armata
To support
Uralvagonzavod's
T-14 Armata, Krasny Oktyabr is participating in the production of the
"Malachite"
dynamic protection armour with the 44S-sv-Sh (
Russian: «44С-Св-Ш») steel which was developed by
Moscow's
Scientific Research Institute of Steel (
Russian: Научно-исследовательский институт стали («НИИ стали»))[c] and intended to meet
STANAG 4569 Level 5 standards for protection against 7.62-14.5 mm caliber heavy armor-piercing bullets and have improved cold weather protection for use in the
Arctic environment.[20][21] Malachite is a fourth generation armor, which is a modular complex of built-in dynamic protection, and will be used on the
Armata platforms.[d][22][23][24][25][26] Numerous financial difficulties at Krasny Oktyabr resulted in production delays of the ultra high strength armoured steel "44S-Sv-Sh".
Notes
^Dmitro Gerasimenko, who began his career with
Dneprospetsstal (
Russian: «Днепроспецстал»), placed numerous persons from Dneprospetsstal at positions at Krasny Oktyabr including his mother Svetlana Borisovna Gerasimenko, who became financial director and conducts her business with Krasny Oktyabr over the phone from her home in Dnipr where she instructs her fellow accountants and bookkeepers where to write each number for the various forms and financial documents,
Eduard Shifrin, who worked with Svetlana Gerasimenko at Dneprospetsstal, Vadim Leibenzon, who Gerasimenko calls his “right hand” and in the early 1990s led the steel shop at Dneprospetsstal and became general director of Dneprospetsstal in 1998-2001 and 2003-2004, and Konstantin Ryabov, who became the president of Red October International and was very close to
Viktor Pinchuk who had been a co-owner of Dneprospetsstal until 2008.[8][11]
^Located in
Moscow, the OOO Steel Research Institute is also known as the OOO Research Institute of Steel or OOO Institute of Steel Research or OOO Scientific Research Institute of Steel or OOO Scientific Steel Research Institute or NII Stali (
Russian: АО «НИИ стали»).
^Козырев, Михаил (Kozyrev, Mikhail) (3 October 2007).
"Под прикрытием" [Under cover]. Forbes (in Russian). Archived from
the original on 11 August 2021. Retrieved 11 August 2021.{{
cite news}}: CS1 maint: multiple names: authors list (
link)
^"Структура холдинга "Русспецсталь"" [Structure of the holding Russpetsstal]. Таможенный союз (проект CustomsUnion) (CustomsUnion.ru) (in Russian). 7 December 2010. Archived from
the original on 16 July 2012. Retrieved 11 August 2021.