AIMEE TURNER / LONDON
US manufacturer agrees to set up 50/50 joint venture in Ural mountains with Russian mining firm VSMPO
Russian titanium miner VSMPO-Avisma is to partner in a c60 million ($73 million) joint venture to machine parts for Boeing’s 787 as the US manufacturer bids to counter a six-fold surge in titanium prices since 2002.
The agreement to launch the 50/50 venture, which will be based in Verkhnaya Salda in the Ural mountains, will see VSMPO start rough machining titanium forgings, with final machining and processing to be completed either at Boeing’s Portland, Oregon plant or outsourced.
The titanium forgings will cost an estimated 25% less than comparable ones made in the USA.
VSMPO-Avisma supplies more than half of Boeing’s titanium and about 55% of that of European rival Airbus’s, both of which are boosting production to meet record demand for modern, fuel-efficient aircraft whose performance increasingly depends on the use of the superior lightweight metal.
VSMPO chief executive Vladislav Tetyukhin says each company will initially invest $30 million in the new venture, and that this investment may increase with expansion after the plant becomes fully operational in 2008.
Mike Cave, Boeing vice-president, says the joint venture is targeting turnover of more than $1 billion – half to be accounted for by Boeing, but also domestically manufactured aircraft such as Sukhoi’s Russian Regional Jet (RRJ), which has secured 40 firm orders.
“Ultimately, this capability will be available to the Russian aviation industry, which will improve its competitiveness,” says Cave.
The first contract between Boeing and VSMPO was a two-year agreement signed in 1997 to provide 2,400t of titanium ingots to the US manufacturer. This was followed in 1998 with a five-year, $200 million deal for Boeing to buy milled products from the Russian firm.
Source: Flight International
