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. Last Updated: 07/27/2016

VSMPO, Boeing Extend Deal on Titanium Supplies 5 Years

Boeing Co. and VSMPO inked a deal Wednesday that will make the Russian metals company one of the U.S. aerospace giant's two major titanium suppliers next year.

The companies did not reveal financial details or the volume of titanium to be delivered.

The contract, which expires at the end of 2007, extends a 1998 deal under which VSMPO, or Verkhnaya Salda Metals Production Association, was to supply Boeing with products worth between $175 million and $200 million.

Titanium, a key structural component in airplanes, accounts for 10 percent of the value of metals in a Boeing 777, VSMPO vice president Vyacheslav Bresht told reporters Wednesday.

Boeing has two other major titanium suppliers, both American, but one will be dropped, said Bob Noble, the company's director of raw materials and standards. He said in addition to titanium, the company will purchase more value-added products like forgings. "The exciting part is moving VSMPO up what we call the value chain ... now shipping less material in terms of weight but with more value," said Noble.

Sverdlovsk region-based VSMPO began supplying titanium to Boeing in 1993 and in the past six years delivered $250 million worth of the metal, or 25 percent of the aerospace giant's demand. VSMPO's other aviation clients include Europe's Airbus and Brazil's Embraer.

Last year, VSMPO exported 11,680 tons of titanium and sold 2,900 tons domestically, posting sales of $320 million, VSMPO's Bresht said.

This year's export figures should drop to between 9,000 and 10,000 tons because of lower demand from the aircraft industry following the Sept. 11 terrorist attacks in the United States, he said.