p>Boeing (www.boeing.com) announced it has signed a 50/50 equity joint venture agreement with Russia’s VSMPO-Avisma for machining titanium forgings at VSMPO’s facilities in Verkhnaya Salda, Russia. VSMPO will perform rough machining of the forgings with final machining and processing done in Boeing’s Portland, Ore., fabrication facility.
The parts will be used in Boeing’s new 787 Dreamliner and Boeing expects to spend $18 billion on Russian titanium over the next 30 years.
VSMPO-Avisma is the world’s largest titanium supplier and already provides material to both Boeing and rival aircraft manufacturer Airbus. “This agreement is beneficial for both companies,” said Kirill Chuiko, a metals analyst at Moscow’s UralSib Financial Corp. “They are key partners and a deeper cooperation will give Boeing a longer-term contract for cheaper titanium while VSMPO will get technology.”
The agreement has significant political complications as it comes one week after the U.S. State Department imposed sanctions on Rosoboronexport, which is in the process of buying out VSMPO, for breaking a U.S. regulation on trading with Iran. “Boeing will continue to work closely with all government agencies,” said Mike Cave, vice president of Airplane Programs for Boeing Commercial Airplanes, “to ensure our joint venture and all other activities in Russia remain compliant with all U.S. and international obligations including the sanctions recently announced by the U.S. State Department.”
“VSMPO will expand its capabilities in titanium parts production and Boeing will increase efficiency and reduce the waste associated with titanium machining.”