Ukraine’s principal space hardware designer, Yuzhnoye State Design Office of Dnepropetrovsk, is finally reaping the benefits from years of effort in trying to sell its expertise outside the former Soviet Union.

The company, whose best-known products are perhaps the Zenit and Dnepr rockets, is providing key hardware for the Taurus 2 rocket being developed by Orbital Sciences Corp. of the United States for an inaugural launch this year, and for the European Space Agency’s Vega small-satellite launcher, which is also scheduled to debut this year.

The decade-long Sea Launch commercial venture, which has had four difficult years, is now out of bankruptcy and, under new Russian ownership, preparing to re-enter service. Yuzhnoye is no longer a principal shareholder of Sea Launch, but it remains a major supplier with the Zenit rocket. Alexander Degtyrev, Yuzhnoye State Design Office’s general director, says Ukraine’s Zenit production plants are committed to the venture’s success.

While it often refers to itself as European, Yuzhnoye has had little success in winning much business from the 27-nation European Union outside the Vega rocket’s upper stage. That is not the case with Brazil, whose government appears determined to make the equatorial Alcantara launch site a commercial spaceport flying the Ukrainian-built Cyclone-4 rocket.

Degtyrev outlined Yuzhnoye’s status and ambitions to Space News staff writer Peter B. de Selding.


It looks like 2011 will see the resumption or the start of rocket launch operations on several continents using your hardware. What is planned?

We are continuing work on existing international projects where Yuzhnoye and Yuzhmash supply launch vehicles or major components. In 2011, Sea Launch will resume operations. Land Launch, which uses a similar vehicle to Sea Launch but operates from the Baikonur Cosmodrome in Kazakhstan, continues to function. Kosmotras [a Russian-Ukrainian company], which provides Dnepr launch vehicles, is successfully operating.

Last year we began delivery of hardware under the contract with Orbital Sciences for the Taurus 2 vehicle. In 2012, the first launch of Cyclone-4 from Brazil’s Alcantara spaceport is scheduled, and we will deliver our first batch of hardware to Brazil in the near future.

I should mention here that Ukraine is committed to observing the ITAR [U.S. International Traffic in Arms Regulations technology export rules] and is a member of the Missile Technology Control Regime. Our activities are guided by these rules and regulations, and we abide by them.

Many people know about the rockets you help develop, especially the Zenit, Cyclone and Dnepr vehicles, but not many know about the company. Who is Yuzhnoye State Design Office?

We are a state-owned company reporting directly to the State Space Agency of Ukraine. We have 4,500 employees, and our manufacturing partner, the Yuzhniy Machine-Building Plant, has about 16,000 employees.

What is your annual revenue, and do you account for profits and losses?

We are a nonpublic enterprise and I cannot provide detailed financial information. But in recent times the company has seen an annual growth in orders of 20 to 25 percent. We currently have 22 customers from outside Ukraine. American customers account for about 30 percent of our foreign income, with Russia at about the same amount. We continue to cooperate with European Union countries, although it is less intensive than we would like.

We are financially stable — I am not talking about exceptional financial performance, but in the context of a world financial crisis we are operating successfully and we provide our employees with a salary that is about 40 percent higher, on average, than the rest of Ukraine’s engineering sector. Exports account for nearly 80 percent of our business volume.

Russian authorities sometimes refer to their goal of being less dependent on former partners such as Ukraine and Kazakhstan. How would you describe relations with Russia?

It is one of our priorities. We have never had any interruptions in our relations with Russian companies or organizations. We are cooperating in Sea Launch, Land Launch, we are jointly providing Dnepr launches from Baikonur in Kazakhstan and Yasny in Russia’s Orenburg region. There is every reason to think our relations with Russia will remain solid.

At the same time, Ukraine acts as an independent, self-reliant player in the international space technologies market for both launch vehicles and satellites. We also have cooperation in the propulsion domain, and we are striving to expand this.

The commercial Sea Launch company has emerged from bankruptcy with new Russian owners. Yuzhnoye is no longer a large shareholder but you continue to be a key supplier. What is your assessment of Sea Launch’s prospects?

Satellite operators were awaiting the return of Sea Launch to operations, as evidenced by new contracts signed by Sea Launch. The approved new organization will enable Sea Launch to return to the market as a strong and competitive provider of commercial launch services. I am absolutely certain that Sea launch has everything necessary for fast resumption of successful operations. There is already a launch scheduled of the Zenit-3SL [the Sea Launch Zenit variant] in 2011.

There have been questions about whether the Zenit production line in the Ukraine can tool up for renewed operations after being idle.

I can say with confidence that technically the Ukrainian enterprises are absolutely ready to support the project with their products and services.

What is your view of the fact that a division of Energia of Russia is now taking ownership of Sea Launch?

Enhancing the role of Energia, one of Russia’s largest space corporations, in the Sea Launch project, including strengthening ties with the leading Russian rocket-engine manufacturer, Energomash — we have longstanding relations with both of them — inspires confidence in the quick return of Sea Launch to its previous launch rate.

We often hear that the space industry in the former Soviet Union is no longer attractive to young engineers. Is work force aging a problem for you?

We see an increasing interest among young people in working at Yuzhnoye. Employees that are 35 years old or younger make up one-third of our total personnel. Launch teams working at remote launch sites also include well-qualified young specialists.

What rocket developments are you working on for the future?

We are developing variants of the Mayak launcher family based on technologies from the proven Cyclone and Zenit systems. We are also looking at air-launched rocket systems. One is for small payloads to be launched from fighter jets for payloads of up to 40 kilograms into low Earth orbit. A second option is based on the Antonov cargo aircraft. A space-launch vehicle launched from this plane could take up to 2,000 kilograms of payload. We are also readying the launch of the Sich-2 Earth observation satellite, which should occur this year, and we are developing the Sich-2M satellite for launch in 2012. We are promoting, on the international market, an Earth observation system with a 2-meter resolution and higher.

Peter B. de Selding was the Paris bureau chief for SpaceNews.