Possible Merger In The Works–Izhmash & Izhmekh

images (4)The Russian government is considering a proposal presented by Deputy Prime Minister Dmitry Rogozin to merge the financially troubled Izhmash with another firearms manufacturer, Izhmekh, creating a new enterprise which will be called Kalashnikov. Vladimir Putin favors the proposal saying,

“As for the merger, this is of course possible. But the result needs to be an improvement in the situation and in no way a worsening. And always in such cases, there are many social questions. I ask you to pay attention to these.”

“I would like support in creating through the merger a cooperation where we can concentrate industrial potential and can make a modern firearms factory,”

Both firms are not in the best of health due to steep declines in orders from the Ministry of Defense, and a failed approach to the commercial markets in Europe and the United States. I cannot speak for the EU, but there is no lack of demand for Russian AK47, AK74 and variants in the United States.

If properly capitalized with an aggressive marketing strategy tuned to the commercial markets, the new firm “Kalashnikov” stands to do very well. Both companies would be merged as part of the giant state industrial conglomerate Russian Technologies.

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