Deal Signed For Italian Helicopters

Europe's third-largest helicopter maker, AgustaWestland, signed a deal with state-run Oboronprom on Friday for the Russian helicopter giant to distribute up to 450 million euros ($700 million) worth of Italian-made equipment over the next four years.

Oboronprom, parent company of consolidated helicopter holding Russian Helicopters, will market AgustaWestland's helicopters in Russia and the CIS. A concrete order for 10 helicopters worth 65 million euros has already been struck, company officials announced at HeliRussia-2008, the country's first exhibition for the industry.

The deal comes a day after Deputy Prime Minister Sergei Ivanov stressed the need for the country to increase its number of helicopters. After years of restructuring the industry, the government has set ambitious targets to triple output to 500 helicopters per year by 2015 and claim 15 percent of the world market.

Oboronprom and AgustaWestland, a subsidiary of Italy's Finmeccanica, eventually plan to set up joint production of Agusta helicopters in Russia. The two companies signed a letter of intent in summer 2007.

"We see the Russian and CIS markets as very important, with the potential to generate significant future business," AgustaWestland CEO Giuseppe Orsi said at the exhibition.

The firm already has orders for 14 helicopters in Russia and is targeting corporate and VIP buyers in the booming market.

Russia is also looking to seal deals with Iran and China to produce helicopters in the countries, Oboronprom general director Andrei Reus said in a separate announcement, Interfax reported.

Talks are continuing over producing Russian helicopters under license in Iran, while the Russians are keen on co-producing helicopters in China, Reus said.

Adding that negotiations with Tehran over the issue are "relatively complex," Reus did not set a timeframe for reaching agreements with either side.

"In the first instance, this means civilian helicopters," Oboronprom spokesman Viktor Bordin said. The possibility of co-producing military helicopters in Iran and China could be discussed later, Bordin said.

Oboronprom will also set up joint facilities to maintain helicopters in China and India "in the near future," Reus said.