OREANDA-NEWS. September 13, 2010. Motor Sich (UX: MSICH UK) plans to open a helicopter engine production facility in Russia, owned jointly with Russia’s Ministry of Defense, Interfax reported on Friday. The plant is scheduled to be opened in late 2010 on the base of an existing service facility in St. Petersburg region. Planned  output is 100 TV3-117 series helicopter engines p.a.

Concorde Capital: this is Motor Sich’s second attempt to open a production facility in Russia. In 2008-09, the company said it would open a helicopter engine service facility in Moscow region. Motor Sich postponed the opening several times and still has not completed the plant. In our view, given Motor Sich’s high dependence on Russian demand for helicopters, the company will likely open some production facilities in Russia in order to be designated as a domestic producer in Russia. Nevertheless, we think no more than 10% of Motor Sich’s production facilities would be relocated to Russia, even in the long-term. We do not expect this news to have any effect on the stock.