VSMPO-Avisma to increase supplies for Airbus
Release Date: 2009-02-05
Source: kommersantRussian State Corporation Rostechnologies is arranging a new contract with Airbus for supplies of Russian titanium. Unlike previous agreements, this contract will be long-term (till 2020) and implies introducing a flexible price formula. This is a win-win agreement for both parties of the contract.
According to a source in Rostechnologies, a long-term agreement with Airbus is being arranged for titanium supplies from VSMPO-Avisma enterprises. Sergey Chemezov, head of the Corporation, met with Thomas Enders, head of Airbus, who came to Moscow to participate in a round table “Aspects of Russian-German partnership”. According to the Kommersant source, “Mr Enders has held negotiations with Sergey Chemezov in the framework of this event. The key subject of the negotiations was discussion of the new agreement for titanium supplies from Russia”. Rostechnologies confirmed the fact that the meeting took place.
Vladislav Tetyukhin, President of VSMPO-Avisma (a titanium manufacturer, part of Rostechnologies), informed Kommersant that the Corporation was going to sign a new contract with Airbus till 2020. “Although the previous contracts were long-term - 3-7 years - this is the first contract for such a long term”, he added. Up to now VSMPO-Avisma had such long-term contracts with Boeing only. According to Tetyukhin, the contract implies an increase of titanium supplies “as Airbus develops its business”, possibly increasing three-fold in 2009-2012. Tetyukhin declined to disclose the amount of the contract and exact amount of supplies.
This year Airbus has provided distribution of 12-13% of VSMPO-Avisma products. Besides, the contract price formula will change to “take into account changes of the market situation”, according to Tetyukhin. The final formula has not yet been agreed; it can be based on the cost of electricity or inflation level.
VSMPO-Avisma (66% of shares owned by Rostechnologies) is the largest world titanium manufacturer. The company provides up to 40% of Boeing’s and 60% of Airbus’ needs in titanium. Titanium production amounted to 27,500 tons in 2007.
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