Moscow: Russian weapons firm Kalashnikov Concern, manufacturer of the famous AK-47 assault rifle, is now planning to expand its domestic sales by concentrating on civilian market as U.S. and international sanctions continue to strain the company’s bottom line.
In 2014, Kalashnikov was barred from doing business with American companies by the US State Department following its involvement in Russia’s annexation of Crimea that year. At the time of sanctions, U.S. markets accounted for almost 70 per cent of Kalashnikov’s small-arms exports, including AK-47 and its variants.
With access to flourishing markets restricted, the company is now looking at other avenues for a turn in fortunes.
Showing improvement in terms of profit, the company is expected to report a profit of about Rs 200 crore, when the results of 2015 are published this month. In 2014, Kalashnikov suffered a loss of Rs 35 crore.
The shift from serving conflicts to now serving civilians has helped the company turn the financial figures. It now sells fewer guns as compared to 2014-15, but makes more profit on each.
For the company behind the 70-year-old weapon, the shift from serving conflict to serving customers is expected to yield results in terms of increased profits.
AK-47s have since long been ubiquitous in conflict zones, with more than 100 million rifles been sold till date. These sturdy guns are exceptionally rugged and can remain in armouries for decades, which in turn limits the sale of new weapons.
With the military market saturated to an extreme level, Kalashnikov is now largely dependent on selling weapons to civilians.
The weapons manufactured for civilian purpose shoot only one bullet at a time and there is no option to switch to full automatic mode as in the military rifle.
Before the sanctions, Kalashnikov planned to expand its domestic sales in the United States, as the gun ownership laws there are more lenient that in many other countries.
