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Guy Anderson Jane's Defence Industry Editor 

Additional reporting Nikolai Novichkov JDW Correspondent

Russian state-run helicopter specialist United Industrial Enterprise Oboronprom has become the latest company to be added to the list of "strategic" ventures protected from privatisation for reasons of national security, Russian President Vladimir Putin announced on 23 June.

The protected companies list - in which foreign organisations are prohibited from taking a controlling stake - now includes approximately 550 state-owned ventures, including many in the defence and aerospace industries.

The addition of Oboronprom comes after Putin accorded the same protection to navigation systems manufacturer Norfes and electronics specialist Sozvezdiye in April. It marks another step towards greater state control of the sector.

In 2005 Putin called for tighter controls on foreign investment in Russia. "It is about time we precisely identified the economic spheres in which Russia's independence and security interests dictate the necessity of primary control on the part of national and state capital," he said in his state of the nation address before the Duma in April 2005.

In addition, Russia's Economic Development and Trade Ministry was previously mandated to work with the Industry and Energy Ministry to prepare a bill restricting foreign investment in 39 "strategic sectors" of the Russian economy.

Oboronprom was created as a closed joint stock company in 2002. Kazan Helicopters JSC was merged into the corporation, which was set up as a holding company for Mil helicopter design and production facilities.

In addition, Oboronprom includes the Ulan Ude Aviation Plant (which manufacturers the Su-25 fighter aircraft and the export variant of the Su-39 along with the Mi-171family of helicopters); helicopter manufacturer Rostvertol; Vpered Moscow Machine Building Plant (a producer of tail rotors and blades for Mil helicopters); and Stupino Machine-building Production Enterprise (manufacturer of drive mechanisms for helicopter rotors).

Oboronprom is owned by the Russian Federation (51 per cent); Russian state defence export company Rosoboronexport (31.13 per cent); the Republic of Tatarstan (15.07 per cent); and Rostvertol (2.79 per cent).

The holding company's position in the marketplace was underlined in May 2005. As a result of a governmental decree, Russia, Tatarstan and Rosoboronexport transferred their shareholdings in a number of enterprises to the authorised capital of Oboronprom. The state brought its 31 per cent stake in Mil Moscow Helicopter Plant, a 49.18 per cent stake in Ulan Ude Aviation, 38 per cent in Vpered Moscow and 60 per cent in Stupino Machine-building.

Rosoboronexport added a 14 per cent holding in Ulan Ude and some additional funds. Tatarstan added the 29.92 per cent stake in Kazan Helicopter Plant, while Rostvertol invested money in the combined venture. The issued shares of the company are valued at RUB4.29 billion (USD158 million).

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