OREANDA-NEWS. August 24, 2011. Airbus and VSMPO-AVISMA Corporation have signed a Memorandum of Understanding (MoU) for strategic collaboration on the manufacture and supply of value-added products, joint development projects and especially on the “Vertical Integration Project”. This agreement further enhances the long-lasting cooperation between Airbus and VSMPO-AVISMA and confirms VSMPO-AVISMA’s strategic position within the EADS/Airbus supply chain.

Under this MoU, the partners confirm their intention to widen their activities from the supply of titanium raw material and forgings to value-added activities. The MoU covers different strategic collaboration areas such as the development of new alloys for the specific use of EADS/Airbus or the possibility to develop the industrial cooperation within the framework of Special Economic Zone “Titanium Valley” to be located in the territory of Verkhnaya Salda, Russian Federation.

The partners also confirm their intention to develop their joint-activities in the scope of the "Vertical Integration Project". Within the Vertical Integration Project, VSMPO-AVISMA activities for Airbus would not be limited to the supply of raw material and forging, but would potentially be extended to rough machining or pre-machining of titanium parts for a more vertically integrated supply chain.

“Developing of vertical production structure is one of the most important elements of our strategy” said Mikhail V. Voevodin, Chief Executive Officer of PSC VSMPO-AVISMA Corporation, “Certainly it is a great advantage that allows to control costs, lead times and product quality within the whole production cycle. “To be closer to the customer” is the main principle of the Corporation marketing policy and we use all possible reserves to achieve this purpose. We’re sure our cooperation with EADS/Airbus will allow to hold the leading positions of our companies in the rapidly developing market”.

“Within 10 years, VSMPO-AVISMA has become one of major industrial partners of Airbus and today covers 60% of our titanium needs,” explains Chris Buckley, Vice President, Europe, Asia and Pacific. “Over the last years, we have worked very hard at Airbus to rationalise and integrate our supply chain to improve efficiency and lead time. We are extremely happy to reinforce our cooperation with our long-term partner VSMPO-AVISMA in the area of vertical integration as it is at the heart of our industrial strategy.”

Since the 1990s, VSMPO-AVISMA has become a major supplier for EADS/Airbus and today covers 60% of the group’s titanium needs in semi-finished products or titanium forgings. Based on the strategic and increasing importance of titanium use in every new aircraft programme and in the aeronautic industry as a whole, in April 2009, EADS/Airbus and VSMPO-AVISMA signed the biggest and longest-term frame contract for the supply of titanium for Airbus and other EADS divisions until 2020. In the scope of this 2009 agreement, Airbus manages the distribution to the whole EADS supply chain.