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VSMPO-Avisma signs titanium supply contract with Boeing

Russian titanium producer VSMPO-Avisma has signed a $1.25 billion contract with Boeing to supply titanium in 2011-2015 for the Boeing 787 Dreamliner passenger aircraft.

Vladislav Tetyukhin, CEO of VSMPO-Avisma, told Kommersant, a leading business daily, on Wednesday a similar contract could be signed next year. Investment analysts told the paper the five-year deal is one of the longest in the history of cooperation between Russian and international companies. The Voronezh-based VASO aircraft plant earlier signed a contract for the delivery of Airbus components for a slightly shorter term.

Sergei Kravchenko, president of Boeing Russia/CIS, said, „Political risks [in relations between Russia and the United States] will be reduced if more deals are signed and they bring Russian and US industries closer. When we sign contracts worth billions of dollars for a number of years, we expect our relations to be stable and predictable,” the Boeing official said. Kravchenko said Boeing planned to invest $27 billion in Russia up to 2038. Of this sum, „around $18 billion will be spent on titanium products, $5 billion on design services and $4 billion is planned to be spent on other goods and services.” At the MAKS air show in August 2007, Boeing and VSMPO-Avisma, which launched cooperation in 1997, announced plans to establish a joint venture, Ural Boeing Manufacturing (UBM). The company will start processing forged titanium components for the Boeing 787 Dreamliner in 2008. The components will then be transferred to the US for completion at Boeing’s Oregon Plant.

Russia’s VSMPO-Avisma, the world’s largest titanium producer, is to be listed on the global stock market in 2009-2010, the head of the Russian Technology state corporation said on Thursday. „Avisma is the technological heart of the [Russian Technology] state corporation currently being established. In particular, we plan to set up a company to produce composite materials and we expect that Avisma will enter the global stock market in 2009-2010,” Sergei Chemezov said. Chemezov said all companies to be incorporated into Russian Technology will be floated on international stock markets in the future. „Russian Technology itself will not be listed, but all companies integrated into the state corporation will later be floated on global exchanges through an IPO,” Chemezov said. The Russian titanium giant exports 70% of its products, with the remainder consumed on the domestic market, according to its website.

VSMPO-Avisma’s major consumers are the world’s largest aircraft building companies, such as Boeing, Airbus, SNECMA, General Electric, Rolls-Royce and Pratt & Whitney. Last year, the company increased titanium output by 15% to almost 24,000 metric tons, and posted a 69% increase in revenue to 28.4 billion rubles ($1.15 billion). This year the company plans to increase its titanium production by 13% to 27,000 metric tons. (