Partners to develop vertical supply chain integration on titanium products
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 the 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.
“The development of the vertically integrated production structure is one of the key elements of our strategy,” said Mikhail Voevodin, General Director of VSMPO-AVISMA. “This is undoubtedly a big advantage and will enable us to better control the costs and the quality of our products during the whole production cycle. Our marketing policy is about “being closer to the customer” and we are using all possible opportunities for this. We are sure that our cooperation with EADS/Airbus will let us preserve the leading positions of our companies on the fast growing market.”
“Within 10 years, VSMPO-AVISMA has become one of major industrial partners of Airbus and today covers 60% of our titanium needs,” explains Christopher Buckley, Airbus’ Executive Vice President, Europe, Asia and the 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 Airbus and its parent company EADS 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.