Boeing Plays Ball With Russia For Titanium

Forming alliances and a joint venture with Russian entities, Boeing hopes to both secure supply of a precious resource and develop new business in
the country.

In an Oct 30 press release, Boeing and the State Corporation Russian Technologies (Rostech), announced “working on an agreement to expand collaboration in titanium procurement and technology development.” Rostech is a majority shareholder in the joint stock company VSMPO-AVISMA Corp. They also announced that Boeing and Rostech are seeking to increase their cooperation in commercial aviation services.


Boeing and VSMPO-AVISMA are considering expansion of their titanium-production joint venture Ural Boeing Manufacturing (UBM) to support ongoing production increases for the Next-Generation 737.


VSMPO-AVISMA has been a Boeing partner and supplier of raw material and titanium parts through a series of long-term purchasing agreements dating back to 1997, when Boeing awarded its first contract to the Russian titanium producer.


Boeing and VSMPO-AVISMA also are working to continue joint support of the Titanium Innovation Center. According to the companies, the center has developed three new technologies now used in production of the 787 Dreamliner and Next-Generation 737. These three technologies may also be used by the Russian aerospace industry. They include a new high-strength titanium alloy and a technology for fabrication of titanium sheets for super-plastic forming.


In July 2009, Boeing and VSMPO-AVISMA opened UBM as a 50/50 equity joint venture based in Verkhnyaya Salda, Russia. UBM is a state-of-the-art facility that machines titanium forgings for the 787. Boeing forecasts that over the next 30 years it will spend as much as $27 billion on Russian titanium, aerospace design-engineering services, and a variety of other services and materials.


VSMPO-AVISMA is the world's largest titanium producer, occupying more than 25 percent of the world titanium market and the major supplier of titanium to Russia. The main shareholder is Rostech, which owns more than 70 percent of the company. VSMPO-AVISMA has long-term contracts with the leading foreign aircraft manufacturers. Source: Boeing


Defense Industry Daily (11/4) in its reporting notes that Titanium is “…a big opportunity for aircraft manufacturers, who want civil customers to recapitalize their existing fleets, in exchange for lower operating costs. It’s also a big headache, as they look to firm up key sources of supply, and build their engineering and manufacturing expertise with this difficult metal.”


Why Russia: The article notes that Russia is the world’s largest supplier of titanium (the article also states that American military aircraft are restricted by law from using it). DID breaks out Boeing’s $27B in a) $4 billion in parts orders from Boeing from 2007-2017; b) $18 billion in contracts for Russian titanium products, and c) $5 billion on Russian engineering services, by 2030. “On the plus side, it led to Russian aircraft orders, as well as engineering innovations that could find military uses on both sides of the ocean.”