Titanium producers looking to raise $500m to treble production (300 words)

Published: 10/16/2000

According to a report carried by UralPressInform on the 9th of October, the governors of the Perm and Sverdlovsk Regions, Gennady Igumnov and Eduard Rossel have sent a joint letter to the Russian Prime minister Mikhail Kasyanov asking for support for plans of AO VSMPO and its affiliate AO Avisma to treble production of titanium-aluminum-magnesium alloys. The producers plan to increase sales within the next five to six years from their current $220m to $713m. According to sources the investments required to increase the producer's capacity will be a very specific $553m.The capital being used for the overhaul of the production facilities and increased working capital. The companies expect the state to provide 47% of the funding through tax concessions and the fixing of energy costs, with the balance of funds coming from the regional governors. These two companies represent the most successful segment of the Russian aerospace industry and have significant international contracts for the supply of components their largest customers being Boeing and Airbus, as well as a number of other producers including Sikorsky. Support from the Russian government should therefore be forthcoming, but it does however, pose the question, why successful aerospace companies within Russia, of which there are few. Should be seeking all of their funding from the state or local authorities instead of looking to the private sector, which of late has shown itself to be more interested in Russian companies with a successful story to tell and is probably a more reliable sources given the inconsistent payment record of the state.

Article ID: 2130