Despite administrative barriers, the Sovelmash engineering center is already operational and continues its steady progress toward the goal. The team is tackling strategic tasks: refining technologies, manufacturing components for its own products, and increasing asset value.

Obtaining the commissioning permit and land buyout

• Another refusal has been received from the supervisory authorities regarding the permit to put the DETB into operation; a resubmission of documents is required. There is an option to file a lawsuit against the supervisory authorities — however, first Sovelmash will try to resolve the issue out of court.

• The rules for buying out the land plot have changed: instead of 1% of the cadastral value, the full price must now be paid, and it may increase. Sovelmash is assessing whether a buyout is advisable at this stage, but is preparing the documents just in case.

Commercial orders

Commercial orders continue to be fulfilled: shipments went out in December, January, and February, and will continue in March. Volumes of commercial orders are increasing; they are currently being processed on lathes and machining centers. This enables Sovelmash to hire additional machinists, increase machine utilization, and then gradually replace commercial products with its own.

Production of angle grinders

• Automatic casting of rotors on the die-casting machine has begun. The serial-production process is being refined, and specific tasks are being resolved. Accuracy to one-hundredth of a gram is critical.

• A unified temperature regime for casting different rotors has been developed both on the casting machine and in the chill mold. This is important to avoid reheating or re-cooling the metal.

• The assembly tooling for the angle grinder is being refined so that the assembler does not waste extra time. Issues with sink marks on the reinforced polymer housing have been resolved. Ventilation grilles are being implemented, improving the appearance.

• It is now important to prepare a sufficient number of angle grinder kits to avoid interrupting serial production when assembly time comes.

Project financing and share allocation

• In February, 6.5 million rubles were credited to Sovelmash’s account. These funds are insufficient to order all the necessary tooling. Part of it is being paid for from current revenue from commercial orders, which slows development.

• The transformation of Sovelmash into a joint-stock company and the transfer of shares to participants should not follow the principle “the sooner, the better.” First, a competent valuation of the enterprise must be conducted. The company’s charter capital should be at least twice the amount that was invested in the project, and the goal is to make it several times greater. In this case, the funds invested will return to participants with a profit.

• Sovelmash’s strategy is as follows: first, valuation of assets (tangible and intangible), then contribution of this valuation to the charter capital, followed by distribution of shares among participants. The valuation is increased by: the DETB building, equipment, patents, reputation, product availability, long-term contracts, production competencies, and more.

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*The translation is done with the help of artificial intelligence.

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