Alcoa, a supplier of aluminum solutions to the world's aerospace industry, and Russia's VSMPO-AVISMA Corp., a manufacturer of titanium ingots and forged products, have agreed to join forces to meet growing demand for high-end titanium and aluminum products for aircraft manufacturers worldwide.
Alcoa Chairman and CEO Klaus Kleinfeld and VSMPO-AVISMA Chairman Sergei Chemezov signed a cooperation agreement at a ceremony in Moscow, marking the first step in forming a new joint venture. Once formed, the joint venture will combine Alcoa's expertise in manufacturing value-add products with VSMPO-AVISMA's global leadership in titanium production to manufacture high-end aerospace goods, such as landing gear and forged wing components, at Alcoa's plant in Samara, Russia.
"The agreement marks an important step in leveraging Alcoa's and VSMPO-AVISMA's strengths in innovation and manufacturing to capture opportunities in the high-growth aerospace market," says Klaus Kleinfeld, Alcoa chairman and CEO. "This alliance will enhance Alcoa's competitiveness and position our global aerospace business for continued profitable growth."
"We actively collaborate with global industrial leaders to implement large-scale projects. Our partnership with Alcoa will help increase our productivity, expand our offerings to customers, and help VSMPO-AVISMA move forward on our strategy to increase the share of our value-add products," says Sergei Chemezov, chairman of the board of directors, PSC VSMPO-AVISMA and head of Rostec Corp.
Mikhail Voevodin, general director, PSC VSMPO-AVISMA Corp., says, "This agreement will add to our current manufacturing capabilities, as the company gets access to unique forging equipment. This step enables us to increase our output and ensure the consistency of supply, allowing us to meet growing demand for our products from leading global aircraft manufacturers."
"This manufacturing partnership will expand on our mutual and complementary strengths in making the largest and most advanced aerospace forgings in the world," says Eric Roegner, chief operating officer of Alcoa Investment Castings, Forgings and Extrusions.
The joint venture, which is expected to be operational in 2016, will capture opportunities in the global aerospace market. Based on Alcoa's estimates as of Oct. 8, 2013, the aerospace market is expected to grow by 9% - 10% in 2013.
Additional terms of the transaction were not disclosed.
Alcoa invests more than $40 million each year to develop new products and aerospace technologies as part of its approximately $4 billion aerospace business.
Alcoa Russia began in 1993. In 2005 the company acquired two fabricating facilities in Samara and Belaya Kalitva. Since 2005 Alcoa has invested nearly $800 million to upgrade its Russian facilities.
PSC VSMPO-AVISMA Corp. is a worldwide titanium producer, providing the full production cycle from stock processing to production of finished parts.
Rostec is a Russian corporation established in 2007 to promote development, production, and export of high-tech industrial products for civil and military purposes. It includes 663 organizations, which currently form 8 holding companies in the defense-industrial sector and 5 holding companies in civilian industries. The organizations of Rostec are located in 60 constituent entities of the Russian Federation and deliver products to the markets of more than 70 countries. In 2012, the revenues of Rostec amounted to $31 billion, with net profit amounting to $1.2 billion.
Days earlier, it was announced that Rostec will invest $100 million in an aircraft building factory in the Ulyanovsk region. Rostec and Canadian aerospace company Bombardier officials announced in late August they had signed a letter of intent for the sale of 50 Q400 NextGen turboprop airliners for use by Russian regional airlines. The two companies also signed a memorandum of understanding for establishing a final assembly line for the Q400 NextGen in the Ulyanovsk region with a capacity of 24 aircraft a year. European turboprop manufacturer ATR is also vying for an assembly site there, according to a Russian press report.
Sources: Alcoa, RIA Novosti
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