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#Boeing and United Technologies Stockpile Titanium Parts from Russia

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August 08 2014

According to The Wall Street Journal /WSJ/, the Boeing Corporation and United Technologies, one of the largest financial and industrial groups in the U.S., have been stockpiling titanium parts from a Russian producer in case escalation of tensions between the U.S. and Russia.

Titanium parts for Boeing are made in Russia by VSMPO-AVISMA Corporation – the world’s largest producer of titanium and titanium components. A golden share of VSMPO (25% + 1 share) is owned by the State Corporation Rostech some companies of which faced sanctions imposed by the United States. VSMPO covers about 35% of Boeing requirement in titanium.

However, Boeing’s European rival Airbus is not going to create any buffer stock of titanium parts from Russia, despite the fact that VSMPO supports 60% of Airbus needs in titanium.

In July 2014, Boeing and VSMPO-AVIMSA extended the current long term supply contract for titanium mill products for another three years – until the end of 2022. Previously this contract covering supply of VSMPO mill products to Boeing was valid until 2020.

VSMPO-AVISMA is a partner of Boeing and supplier of raw materials and titanium parts via a number of long term agreements since 1997, when Boeing signed its first contract with the Russian titanium producer.

In 2009, Boeing and VSMPO-AVISMA established an equally owned joint venture Ural Boeing Manufacturing (UBM) located in Verkhnaya Salda, Sverdlovsk region. A new state-of-the-art facility performs machining of titanium forgings for Boeing 787-8 and Boeing 787-9 Dreamliner.

Between 1993 and 2013, Boeing has successfully signed contracts with the Russian and CIS companies for the total amount of 7.5 billion dollars. Over the next decades, the Company is going to invest 27 billion dollars in the procurement of the Russian titanium, aerospace design and engineering services, as well as in some other services and materials.

VSMPO-AVISMA Corporation supplies its products to the markets in 50 countries worldwide, and is deeply integrated into the global aerospace industry being a key strategic supplier for many companies. The Corporation employs 20,000 people. VSMPO-AVISMA management has a majority ownership in the company (about 60%) and Rostech has a blocking minority ownership (25% plus 1 share).

The Wall Street Jornal
Prime – News, Metals