Relationship with Boeing develops

Published: 7/4/2000

The Verkhnesaldinsky Metallurgical Production Organization (VSMPO) has had a flurry of activity with western aerospace companies of late, further developing the relationships that have developed over the last few years. Some of this activity does appear to be aimed more at reassuring the newspapers of Boeing's commitment to Russia than representing a new expansion of working relationships. On 5th June, Harry Stonecipher, President of Boeing, signed an agreement that, according to Vladislav Tetyukhin, General Director of the titanium producer, contains little substance other than a desire on the part of VSMPO, with Boeing's assistance, to develop new alloys and achieve international certification. The VSMPO relationship with the Seattle-based producer goes back to 1994 with the first sales of ingot and, since 1998, has developed into the production of rolled products following the award of international certification. Currently VSMPO provides 20% of the titanium and its alloys used by Boeing and these sales represent 65% of VSMPO's production, although the fall in deliveries from Boeing in 2000 could continue the reduction in volume of the last couple of years. The company expects this situation to continue until at least 2002. The move from ingot to products however, is anticipate to improve the revenue for the Sverdlovsk-based producer. Despite the reduced volumes, Tetyukhin's view is that the enterprise is becoming more intimately involved in the development of alloys for Boeing. He cites as an example the manufacture of largest horizontal LG beam blank (weighing 1.5 tonnes) for the Boeing 777, which while small in terms of serial production, represents the start of a longer process of cooperation and product development between the two companies. This process will benefit both Boeing and VSMPO and also domestic producers according toVSMPO as the company's manufacturing expertise grows. Airbus industries have also been signing contracts with the Russian producer and according to VSMPO, they supplied 60% of the producer's titanium demand in 1999. According to Vyacheslav Bresht, Deputy General Director of VSMPO, a contract is to be signed shortly, with deliveries commencing in September 2000. The contract will last over 5-7 years and have a projected value of $200m. Elsewhere in Russia, Airbus is also sourcing parts from other producers such as Samara-based Sameko, which produces a part that has recently been certified for inclusion in the A-340. The company is additionally looking forward supplying aluminium blanks to the aircraft producer. Other major aerospace companies buying products from VSMPO include US helicopter producer Sikorsky, which signed an agreement in April 1999.

Article ID: 1911