VSMPO-Avisma has signed a $4 billion contract with the European aircraft builder.
VSMPO-Avisma, the world's largest titanium producer controlled by the Government corporation Rostekhnologii yesterday signed a $4 billion contract with Airbus. The head of Airbus Thomas Anders and Director-General of Rostekhnologii Sergey Chemezov put their signatures under the contract.
Prime Minister Vladimir Putin, who watched the signing, said the contract started being prepared from the summer of 2008 when the parties signed a framework titanium supply agreement at the Farnborough Air Show. Now the Russian company will meet almost 60% of Airbus's titanium needs. "We intend to develop our relations with EADS (European Aeronautic Defense and Space Company) which is the sole shareholder of the Airbus in many areas. Cooperation with the Airbus in the sphere we are discussing today is an important part of interaction in the high technology area," Mr Putin noted.
Under the contract, Russia will supply flat and round rolled titanium alloy items as well as castings which will be used in the manufacture of all Airbus liners. The possibility is under consideration of treating titanium products at VSMPO-Avisma to create an integrated titanium supply chain starting from raw material and ending with finished products.
In early April VSMPO-Avisma signed an agreement with Boeing to form a joint venture to provide titanium castings for the Boeing 787 Dreamliner. The JV is scheduled to open in July in time for US President Barack Obama's visit to Moscow.
"The key point is that VSMPO-Avisma is one of the main suppliers of semi-processed products both for Airbus and for Boeing", says Oleg Panteleyev, a senior expert with Aviaport Agency.
One should not forget that aircraft builders have already announced cuts in plane production because of the crisis. Earlier Airbus planned to cut the production of A320s and A380s and Boeing said it would cut production of Boeing 777s starting from 2010. The Americans have postponed indefinitely earlier plans of increasing the building of B747 and B767 liners.
"That is an obvious problem because it has been suggested that in connection with the crisis leading world producers may slow down their production", says Oleg Panteleyev. However, because the schedule of plane construction has been made years ahead, VSMPO-Avisma will not experience much of a shock.
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Rosavia to buy 200 planes
After the signing of the contract for the supply of titanium the Director-General of Rostekhnologii, Sergey Chemezov, said that the newly created Rosavia airline may need more than 200 planes to renew its fleet. He said the issue will also be discussed with Airbus, adding that the air carrier will buy liners not only from Airbus, but from other manufacturers, including Boeing and the Unified Aircraft Building Corporation. Sergey Chemezov also noted that not only Russian sources will finance the purchase of foreign-made planes by Rosavia and its main shareholder Rostekhnologii. "We would be interested in obtaining credits from Western banks because, unfortunately, the cost of money in the West is much cheaper than here," the Director-General of Rostekhnologii said.
Yekaterina Sorokovaya