Boeing’s Russian Titanium Deals
Dec 06, 2012 16:29 UTC
New planes need titanium. Its exceptional strength and low weight help military aircraft offer better performance, and civilian aircraft offer better operating costs. Unsurprisingly, the use of titanium and composite materials has skyrocketed in new military and civilian aircraft. It’s a big opportunity for aircraft manufacturers, who want civil customers to recapitalize their existing fleets, in exchange for lower operating costs. It’s also a big headache, as they look to firm up key sources of supply, and build their engineering and manufacturing expertise with this difficult metal.
Russia is the world’s largest supplier of titanium, but American military aircraft are restricted by law from using it. On the civil side, however, Boeing can do what it likes. In order to secure its civil supply, build it manufacturing expertise, and break into a modernizing Russian market, Boeing signed deals with Russia’s state firm Rosoboronexport, and established a joint venture. That endeavor could produce up to $4 billion in parts orders from Boeing from 2007-2017; plus up to $18 billion in contracts for Russian titanium products, and $5 billion on Russian engineering services, by 2030. On the plus side, it led to Russian aircraft orders, as well as engineering innovations that could find military uses on both sides of the ocean.
