Memorandum Number: No. 034-M

February 14, 1995



The Department of Defense announced today the creation of a $4.4 million joint venture to manufacture cellular telephones in Kharkiv, Ukraine. Under the Cooperative Threat Reduction (CTR) (Nunn-Lugar) program, the Defense Nuclear Agency recently awarded a $3.25 million cost-sharing contract to Federal Systems Group, Inc., Falls Church, Va., to form a partnership with Kommunar Production Association, Kharkiv, Ukraine. Federal Systems Group will contribute $1.15 million to the venture.

Kommunar, an electronics manufacturer, formerly produced missile and space guidance control systems and relays for military satellites. Federal Systems Group's U.S. partner is OMNI Telecommunications of Carthage, Ill.

The partnership's telephones will be compatible with the Ukrainian cellular telephone system and will enhance the local communications infrastructure. The telephones will be compatible with systems in Europe and Asia, but not with those in the United States.

he joint venture will initially employ approximately 120 people and eventually over 200.

This project is the fourth initiative funded under a $40 million Cooperative Threat Reduction (Nunn-Lugar) program defense conversion implementing agreement signed March 21, 1994, by DoD and the Ministry of Machine Building, Military-Industrial Complex and Conversion of Ukraine.