OREANDA-NEWS. VSMPO-AVISMA which is part of Rostec State Corporation and Boeing company signed a memorandum of understanding to establish a new production facility in Titanium Valley of Sverdlovsk region to machine forgings for the new generation of commercial jetliners produced by U.S. aircraft manufacturer. It will double the output of the joint venture Ural Boeing Manufacturing (UBM) by 2016.

“This agreement is a logical step in the development of our strategic partnership with Boeing,” said Sergey Chemezov, Chairman of VSMPO-AVISMA Board and Rostec CEO. “We are committed to maintaining a strong alliance and working together to increase the output and improve the product quality for the advanced aircrafts produced in U.S.”

A joint venture, UBM, was established in 2009 in Verkhnyaya Salda, Sverdlovsk region. This facility performs rough machining of forgings produced by VSMPO-AVISMA for the advanced airplanes, the Boeing 787 Dreamliner, Boeing 737 MAX, and Boeing 777X.

A new production facility that will be located near VSMPO-AVISMA in a special economic zone Titanium Valley will perform both rough and finish machining of forgings. This facility will employ about 100 highly skilled engineers. State-of-the-art equipment will help to achieve considerable cost savings and increase the output of titanium parts for all Boeing aircrafts. The majority of parts produced in Russia are made of unique titanium alloys developed by Boeing-Rostec Research Center.

Project investments are not disclosed at this stage, provisional deadline of project implementation is 2016.

“Today we mark another important step in further expanding our partnership and our mutually beneficial cooperation”, said Ray Conner, Boeing Commercial Airplanes President and CEO. “Rostec has been a reliable and valuable partner for Boeing for many years, and I am positive, future cooperation will be advantageous and beneficial for both parties.”

“The agreement reached between VSMPO-AVISMA and Boeing to open a second machining facility for titanium forgings is very important to us”, underlined Michail Voevodin, VSMPO-AVISMA CEO. “It is a good opportunity to increase the output, become more mature and create new jobs”.

Boeing forecasts that it will spend approximately USD 27 billion on procurement of titanium products, aerospace design-engineering services and a variety of other services and materials.

VSMPO-AVISMA - producer of titanium forgings located in Verkhnaya Salda has been a partner of U.S. manufacturer for more than 15 years. Today, the Russian producer supports almost 40% of Boeing needs.

In addition to a joint venture UBM for machining of titanium forgings, VSMPO-AVISMA and Boeing have established a joint innovative Technical Research Center for titanium.

Rostec State Corporation is the Russian corporation established in 2007 to promote development, production and export of high value-added products for civil and military applications. Rostec comprises approximately 663 companies, which currently form 8 holding companies in the defense and industrial complex and 5 holding companies in the civil industrial sector. These companies are located in 60 regions - members of the Russian Federation and supply products to more than 70 countries worldwide. Rostec revenue in 2012 was 913 bln RUR, net income - 38.5 bln RUR. Tax payments to the budgets of various levels were 109 bln RUR.

Boeing is the world's largest aerospace company and leading manufacturer of commercial jetliners. Boeing products include military helicopters, electronic and defense systems, satellites, launch systems, advanced information and communication systems. In addition to designing, producing, modifying and supporting fighters, bombers, transports, rotorcraft, aerial refuelers, missiles, munitions and spacecraft for military, civil and commercial use, BDS is developing enhanced capabilities through network-enabled solutions, communications and intelligence, surveillance and reconnaissance technologies. The company also provides aircraft maintenance and after-sale services. A top U.S. exporter, the company supports customers in more than 90 countries.