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PJSC Octava — the Tula plant founded in 1927 is a developer and the creator of the electro-acoustic equipment, both for the civil purposes, and for defense industry complex. The bulk of professional microphones of PJSC Octava is exported to Europe and other regions. Thanks to the high quality and the attractive price professional microphones Octava enjoy popularity among musicians and sound recording studios.

First and the radio engineering plant of a full stroke, oldest in the country, developing and serially producing the modern electro-acoustic equipment - the Tula plant Octava (PJSC Octava) - is created in 1927. Its products – microphones for studio work of musicians and sound producers, headsets.

The Tula plant \"Octava\" develops and produces the modern electro-acoustic equipment serially
The Tula plant "Octava" develops and produces the modern electro-acoustic equipment serially

Performance Indicators

2019: Growth of revenue from the main implementation for 61.5% up to 228 million 611 thousand rubles

On March 24, 2020 the Octava plant (enters into State Corporation Rostec) reported that at the end of 2019 total sales were 272 million rubles. 228 million 611 thousand rubles from this amount — revenue from the main implementation which for 61.5% exceeded indicators of last year. Growth of proceeds from sales of civil products in relation to 2018 was 87%. Its share in total sales from sales — 64%, in absolute measures is 146 million 264 thousand rubles. The enterprise implemented plans for expansion of geography of export, started 7 new products for 2 years, entered the market of biometrics.

Export grew in absolute measures from 22, 525 million rubles to 34, 937 million rubles. For March, 2020 products of the plant are exported to Germany, Greece, China, the USA, the Netherlands, Belgium, France, Italy, Spain, Austria. In a priority the exit to 26 additional export markets, the plant signs contracts with Norway, Great Britain, Canada, Turkey, Bolivia, Mexico, Vietnam, the UAE, Japan.

Within development strategy implementation Octava continued development and release in serial production of products: the vocal MK-119 microphone provided at the beginning of 2019 in California and also bonus MK-115, MK-117, MKL-112. MKE-215 Sberbank, Promsvyazbank, Bank bought Russian Standard, Novikombank, Gazprom Bank, Opening, Sovcombank, VTB, Rosselkhozbank (RSHB), Alfa-Bank, Uralsib Bank, Rosgosstrakh Bank, the Ak Bars. MKE-215 supply rate in 2019 exceeded 49 million rubles.

Investments into production, performance improvement of work allowed to increase products production volume, at the same time upgrade is still necessary for the enterprise.

Despite disruptive results on increase in revenue, one of the main tasks there is a production upgrade. The lack of the necessary modern equipment increases cost value and does not allow to meet in full market demand for civil products. In 2019 the investment program therefore in the next years production upgrade, mastering of serial production of headsets for radio stations, an output to the market of the vocal dynamic microphone is planned was approved. In plans also an increase in labor productivity and the salary,
noted the CEO of the Octava plant Vladimir Saukh

For March, 2020 over 360 specialists work at Octava. Based on 2017 booked in the summer of personnel audit, average age of staff of the plant was 54 years. Thanks to the announced set of the new frames, including youth, salary increase, average age of employees decreased for 7 years and reached 47 years. The number of the main production personnel in 2019 is increased by 16.4%. However at the plant the need for highly skilled workers and specialists still remains.

The development strategy of the enterprise is directed to further gain of positions in a class of professional microphones, development and development of production of hearing aids, strengthening of provision in a broadcast-segment and an exit in a segment of concert scenic activity. Headsets are carried to the most perspective segments, in addition to the microphone equipment. Octava signs contracts with airport terminals of the country: international airports Sheremetyevo Domodedovo Pulkovo Koltsovo Vladivostok, Khrabrovo and others.


Start of the Import substitution program for the Russian banks

On June 19, 2019 the electro-acoustic plant "Octava" (enters into State Corporation Rostec) announced start of the Import substitution program. The essence of the program is that the enterprise gives to credit institutions an opportunity to replace the import microphone equipment purchased till January, 2019. Gazprombank became one of participants of the Import substitution program. Read more here.

Correction of strategy

In 2019 Octava carried out correction of strategy, the actions directed to increase in profitability are entered to it. The business process reengineering at the enterprise begun in 2017 brought Octava to qualitatively other level of the made products, the provided services and performance. Quantitative indices during a transient period showed the expected decrease, but thanks to elasticity of approach and carefully planned updating in 2018 process of growth of separate segments which achievement of optimal indicators is planned for 2019 was started.

At still high cost of production the second year in a row the enterprise is at break-even level, products of Octava occupy 17% of the Russian market of the microphone equipment and the plant's management expands sales channels in the country and abroad. In 2018 the first contract with the distributor from the USA is signed, negotiations on cooperation with the countries of the Pacific Rim are conducted. We not only provided the created models of professional microphones, but also expanded a product line at the expense of the bank equipment. In 2019 we are going to master a market segment of vocal microphones for Octava. Only in Russia the capacity of this market exceeds the capacity of studio almost six times.
Lyubov Stalnova, marketing director of the Octava plant

In 2019 the enterprise will continue developments in the field of headsets for aircraft and airport service: focal product GSSh-A-18M-1 — the headset with average shumozashchity will be improved.


Export of professional microphones of Octava exceeded 47% of all Russian export of muzinstrument

On March 15, 2019 the Tula plant "Octava" created a bonus line of microphones and also left in other product segment of the market of electroacoustics: equipment for the biometric systems of the Russian banks. In spite of the fact that the sales increase of the microphone technology of significant growth did not make profit yet, the enterprise keeps the second year in a row at break-even level and plans expansion of channels of wholesale distribution. In 2018 the plant already signed agreements with partners as in Russia, and the contract with the distributor in the USA.

At the end of 2018 export of professional microphones of Octava exceeds 47% of all Russian export of musical instruments and at low percent in total sales, export showed growth in absolute measures. The plant passed from model of sales through the exclusive import distributor on the export direction to sale through wider partner network and began to expand deliveries to other foreign markets. According to experts, entry of Octava into independent export sales and development of distribution abroad in 2018 increased marginality of sales. The implemented model — a combination of b2b of direct sales and work through dealers — showed growth of cash receipts from sale of civil products in comparison with 2017 for 21% in relative indicators.

The plant remains at break-even level, despite such factors as instability and change of structure of GOZ, high production cost value and restrictions on production volumes. The previous year revaluation of fixed assets which indirectly influenced change of indicators of profitability of production was performed.

In February, 2018 at the enterprise the function which integrated industrial design and engineering that allowed Octava to create in a year a line of professional microphones in the updated design was entered. Other packaging is implemented, are released modification of flagman MK-012 model and MKL-112, MK-115, MK-117 models are added.

For an exit in a segment biometrics in the voice direction in 2018 by the plant it was developed and the MKE-215 microphone which already bought Sberbank, Promsvyazbank, Bank Russian Standard, Novikombank and others for program implementation on biometric data collection of clients is produced in lots.

The development strategy of the enterprise is directed to further gain of positions in a class of professional microphones, strengthening of provision in a broadcast-segment, development of the Russian professional microphone for concert activity and development of production of hearing aids which were provided in September, 2018.

Headsets are carried to the most perspective segments, in addition to the microphone equipment. For 2018 Octava signs contracts with the airports of the country.

Certification of the Russian export center

On August 22, 2018 the Octava plant announced that it became the participant of a system of voluntary certification and marking of "Made in Russia" of the Russian Export Center (REC). The enterprise underwent conformity assessment to the set requirements of products intended for export and acquired the right of placement of the sign "Made in Russia" on packaging or the product.

Microphone of production of the Tula plant \"Octava\"
Microphone of production of the Tula plant "Octava"

The Made in Russia program started in 2017, and, as of August, certification there underwent 111 enterprises of the country. According to representatives of Octava, the program is designed to promote an exit of the Russian producers to international markets and to guarantee to the foreign consumer security and goods quality. Within the program start of the electronic directory of the Russian producers in foreign languages, the systems of digital identification of the marked Russian goods for fight against a counterfeit, development and implementation of a complex of the marketing efforts (including, carrying out researches) directed to promotion of the Russian brands and products in foreign markets taking into account features of the importing country is supposed.

The assessment of the plant within voluntary certification was carried out on such factors as: product quality, history of the enterprise, image, competences of personnel and safety of production. Thanks to strict rules of a system of certification only eco-friendly and reliable products meeting the high international standards have an opportunity to undergo expert testing. Establishment of objective practice of marking takes place in cooperation with government agencies and trade organizations, told in Octava.

The enterprise exports more than 65% of the released professional microphones to the countries of Europe. In 2018 the marketing efforts directed to rebranding and promotion of products of PJSC Octava in international market are implemented, works in the field of industrial design, improvement of a complete set are conducted. Participation in the Made in Russia program for us one more opportunity to increase an export share which according to the results of last year made 17% of revenue of the enterprise — Lyubov Stalnova, the marketing director of PJSC Octava reported.

Target markets for Octava are EU countries, the USA, Canada, the countries of Latin America and the Middle East. The forecast of growth of a market share for different categories of products of the plant makes from 1 to 4.1% in the world market, shared in Octava.

Revival of the legendary enterprise

Well-known brand

High quality of products of Octava is confirmed by the fact that its most part goes for export. Octava microphones are on sale in the western countries, the USA and in Southeast Asia. Professional microphones Octava such musicians as Radiohead used for record of the albums, U2, Sting, Iron Maiden, Marylin Manson and many others. Besides Octava microphones are used for the film industry, a body and broadcastings (Mosfilm, Charles Meynz (Hollywood), Ostankino).

In the late nineties – the beginning of the 2000th products of the enterprise became very demanded in the European Union countries, North America, Australia, New Zealand. Export supply of steel at that time for Octava the proof of original competitiveness and significantly improved a goodwill of the plant abroad. Only top MK-012 microphones, since 1989 about 120 thousand were sold, - Alexander Veselov, the CEO Octava tells TAdviser

In addition to the civil equipment, the plant turns out dual-use products - chatter boxes, technology of order loudspeaker communication, the wire negotiation systems, the notification equipment, aviation headsets.

At the same time for many years after disintegration of the Soviet Union the plant was not upgraded, wearing out the production capacities more and more. As of June, 2017 average age of the equipment was 30 years, costs for its contents were extremely high, and loading did not exceed 15%. Marketing, the organization of sales, the analyst of the market, work on modern design of products and its packaging, expansion of sales channels – all this either was absent, or was in embryo.

None of the former management of the enterprise looked at the Russian market, and it was wrong, of course. At the same time many famous domestic actors know our microphones, - Alexander Veselov notes

In addition to the civil equipment, the plant turns out dual-use products
In addition to the civil equipment, the plant turns out dual-use products

Transfer to direct control of State Corporation Rostec

In June, 2017 the Tula plant was transferred to direct control of State Corporation Rostec. The supervisory board made the decision on transfer of the enterprise under coaching of the director of special instructions Vasily Brovko. At the enterprise there was a replacement of the leadership, the unrolled strategy of upgrade was accepted, the first practical steps are taken – for the first time in 30 years the new boiler house was built, repairs of the areas of the production body are made.

With transition of Octava to direct control of Rostec at the plant upgrade of work of the enterprise in general began.

The lack of new products was a big problem. The enterprise conducted researches on upgrade and development of new models of microphones, headsets, but full-scale implementation was not given start and practices lay at designers in a table. Now product development process changed. We establish a feedback with the consumer. Certain results were already achieved, and we plan that new products will be put on the market in 2018, - Veselov notes.

In the second half of 2017 the investment program was developed and approved, technical audit is booked and sections of a production chain, critical for upgrade, are defined, works on protection and protection of the rights of results of intellectual activity are started, personnel audit is booked, the organization structure of the enterprise is changed. Changes in the HR policy assume salary increase for 20%, system implementation of motivation of work, enrollment of new employees.

С переходом «Октавы» в прямое управление <!--LINK 0:85--> at the plant upgrade began
С переходом «Октавы» в прямое управление Rostec at the plant upgrade began

The carried-out work naturally was expressed in new contracts - in their 2017 about 100 were concluded, and 20 of them – with new partners (Lyutner company, airline "Irkut", the airports "Sheremetyevo" and "Vnukovo", Head department of aircraft National Guard of the Russian Federation).

The small, but sign project was implemented in Ostankino - Octava microphones equipped studio Tone studio No. 3. For the purpose of promotion of products in the Russian and international markets the enterprise participated in the MAKS-2017 exhibitions, "Army-2017", Import substitution, NAMM Musikmesse, Interpolitekh, NATEXPO.

We already entered the domestic market, we sell about 300 microphones a month. For comparison – in the western markets we sell monthly about 700. I will note that our capacities allow to produce monthly about 3 thousand microphones, - Veselov says

As new product lines – an important component of the development strategy of the enterprise, in 2017 the agreement on strategic partnership of the plant and JSC Angstrem T - the leading Russian developer and the producer of semiconductor products from discrete transistors to modern microcontrollers and microprocessors was signed. The agreement purpose - release of import-substituting acoustic products of new generation: the systems of conference communication, intercom complexes and also a line of digital hearing aids and other products developed for the purpose of execution of the state program "Available environment". Large-scale work on carrying out the developmental works directed to creation and an output to the market of conceptually new series of the aviation GNSh-A-24 headsets intended for work as a part of the equipment of a cabin of the pilot of a wide lineup of airplanes (Tu-204, Tu-214, Il-96 and YAK-40) was begun.

The first results of renovation of the plant - at the end of 2017 the enterprise increased production volumes twice and reached break-even level, and the main growth is provided at the expense of civil products which share in the total amount of deliveries exceeded 50%, and sales growth made about 20%, having reached 123 million rubles.

Consolidated revenues of the enterprise in 2017 - 230.5 million rubles, and the analytical indicator of profit of EBITDA which had earlier negative value grew by 189% (9.3 million rubles).

Ambitious strategy

Strategy implementation in the long term should lead to development current and to creation of new products in four directions – microphones, headsets, earphones and military products.

In the microphone direction focus becomes on development of the current segment of professional professional microphones, development of new microphones for TV and broadcastings, concert activity and conferences.

Regarding headsets expansion of a lineup and creation of the new facilitated types of headsets with active noise reduction and also expansion of scopes - a conference circuit for land and air transport, service of rescue and aircraft is supposed.

On the third activity start of production of full-sized laid on wire and wireless headphones is planned.

With arrival of new management for increasing sales, expansion of regions of sale at the enterprise marketing function was created. Octava began to participate in the leading world exhibitions.

The enterprise takes an important step also for overcoming a design barrier, integrating design and engineering. At the plant the new department which is responsible for a uniform development cycle of a product – from industrial design before carrying out design works is created. The new division is faced by a task to raise quality characteristics of a product, having increased its market attractiveness.

The activity directed to revival of unique production technologies of the microphone equipment and headsets, implementation of marketing function and also function of industrial design which became a component of design work drew attention of professionals of the industry that promotes the conclusion of new contracts and recovery of partnership with old clients.

For the purpose of sales increase it is supposed to expand sales retail network, to develop and implement price policy, to develop and implement the system of customer service.

Actively we are going to act on the Russian market with new products – professional microphones, the aviation headset for land service of the airports. At present we have a work on signing of the contracts with 10 large Russian musical networks, among them – Muztorg and Lyutner with which agreements are already signed. About the western markets we do not forget too, naturally, - we conduct negotiations with foreign dealers on further promotion. Our microphones on a ratio the price quality exceed many western analogs, - Alexander Veselov notes

Strategy implementation should lead to the annual growth of export sales, increase in a share of revenue from export up to 85%, and in the long term – removal of the plant on a position of the leading world supplier of the electro-acoustic equipment.

In domestic market and in neighboring countries it is also going to develop sales of products of the plant, and local models on technical characteristics will not differ from export.

Approach to development of products and user feedback

The main segment of civil products of PJSC Octava - microphones for professional and home musical studios, cultural institutions, music schools, television and radio studios, theaters and concert halls.

The Octava company offered me on the test three microphones among which were legendary MK-012, MK-519 and MK-101, - Ilya Zudin, the musician from the Dynamite group told TAdviser. - All were pleasant, but as the vocalist for myself in this three I especially noted MK-519. I estimate this microphone as very good, and taking into account its price of competitors at it in the domestic market just is not present. We tested this model of the microphone, comparing it to Neumann M 149 and though it was not quite correct – to compare the condenser microphone to lamp, but how MK-519 proved, for me was simply amazing. By my voice the microphone was more contrast, detailed. Very much also the fact that passport characteristics of the microphone, and what it showed "in the field", at studio, it was very close was pleasant without deception. I consider that MK-519 - one of top inexpensive microphones.

Ilya Zudin, the musician from the Dynamite group, estimated microphones of Octava
Ilya Zudin, the musician from the Dynamite group, estimated microphones of Octava

At the plant microphones with different technical characteristics, a total quantity of models - 46 are made. The main types of microphones are defined by the principle of work of caps: dynamic (lineup of MD) and condenser (MD). Two other important technical characteristics - type of the preliminary amplifier and the direction characteristic. On the first sign microphones are divided into transistor and lamp, and according to the direction characteristic - on model with orientation "circle", "eight", a kardioda and a giperkardioda, but also a number of models of microphones (MKL-111, MKL-5000, MK-220) are equipped with orientation switches.

Sergey Chemezov took part in opening of a creative industrial cluster Octava and visited the PJSC Octava plant
Sergey Chemezov took part in opening of a creative industrial cluster Octava and visited the PJSC Octava plant

In a product line there are models of a bonus, average and low price segment. Flagman in product assortment Octava the condenser professional microphone MK-012 - actively competing with the western analogs, very popular both in EU countries, and in the USA model.

But MK-012 – not the only flagship product: in 2017 the plant had the whole line of the flagman models which are selected after carrying out special audit of a line of all types of the range – microphones, the headset, earphones. On the flagman models which are most conforming to modern technology standards and, focus will also be made taking firm positions in the market in comparison with competitors according to new product strategy.

In category "microphones" of flagman were among MK-012 and MKL-111, and are included MK-319/519, MK-105, MK-220, ML-52-02 and MKL-112 in the main product line (as replacement of MKL-5000), in category "headsets" wireless GSSh-A-18B and aviation GSSh-A-18M1, flagman earphones - professional studio TDS-23 became a flagship product.

Then children from Octava brought to me "tsar" - MKL-111, - Ilya Zudin adds. - I recorded on it the new song and I can fairly tell that I was delighted. The microphone very worthy - soft and really imperial on sound quality. Besides, taking into account price policy of Octava, I think that many sound producers will want to purchase to themselves this domestic product, and they should hurry because the price of these microphones, I think what will shortly rise. In MKL-111 qualitative, very expensive lamp is used, a gilded membrane, all components are executed top-level. You hold in hand as "Rolls-Royce". I am very happy, purchased this microphone for the studio, and I am not going to remove it from a microphone rack yet. In general, at that price at which Octava offers microphones I consider that they just have no competitors

The headsets released by the enterprise are demanded in aircraft, armored vehicles, ship communication, telephony and some other spheres of economy, a total quantity of models – 17. Flagman models of this category of products are GSSh-A-18M1.

According to the results of 4 months of work the pilot batch of flagman GSSh-A-18M headsets was bought by airline "Irkut", 100 headsets of an average shumozashchita are purchased by Head department of aircraft National Guard of the Russian Federation, headsets with low noise reduction of the airports by land services "Sheremetyevo" and "Vnukovo" are highly appreciated.

Since May, 2018 products of Octava became for the first time available to the consumer through an online megamarket — the Tula plant signed the agreement with — one of the first Russian projects of e-commerce in B2C segment. On more than 30 names of the equipment of Octava are submitted.

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