Boom for Russian AK-47 maker Kalashnikov

Amidst the gloomy Russian economy, there is one product whose business plan has managed to avoid the economic downturn, which was primarily caused by lower oil prices and Sanctions by the West.

AK 47

The AK47, designed by Mikhail Kalashnikov, also known as the maker of one of the world’s most popular assault rifle, reported $45 million in revenue last year despite the sanctions that emerged out the Ukraine crisis to put pressure on the Russian government.

Even though the AK-47 maker was one of the first companies to be targeted with trade sanctions, Kalashnikov attributed the tremendous growth to developing customers situated primarily in Asia and Africa.

According to CNN, Kalashnikov and his team had to change their sales strategy once they got slapped with sanctions. The new strategy aimed to produce military products which proved to be right on target as the Worlds Armed Forces are being confronted by a new set of security threats.

According to a video report, Global Defense budgets were increased in 2014 for the first time in three years and despite their waning economy, Russia is boosting their military expense by almost 30% in 2015 driving domestic demand.

Despite having to change the sales strategy and gain new global customers, the Russian military and other Russian law enforcement agencies are still among Kalashnikov's most important customers, and they're spending heavily on new weapons.

Until today, about 74 million AK47 weapons have been produced, primarily by IZHMASH, the Kalashnikov Concern that also manufactures automobiles and other weapons.


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