EADS Signs its Own Titanium Deal with Kazakhstan
In January 2008, Boeing signed a billion-dollar titanium deal with Russia’s Rosoboronexport military export agency, which had acquired top global titanium producer VSMPO-Avisa. While the 1973 Berry Amendment tends to exclude this titanium from the US defense market, its use is rising on both the defense side (fighters, armored vehicles, howitzers, body armor, et. al.) and the civilian size (esp. new passenger jets like Boeing’s 787). Titanium is the longest lead-time item, and a major cost factor, in the production of F-22 Raptor stealth fighters, for instance. When GKN Aerospace bought Stellex, DID noted this passage in their release:
“There is also a growth trend in the use of titanium… Titanium structures will account for approximately 20% of the weight of the new F-35 Joint Strike Fighter and 15% of the Boeing 787 airliner – more than twice the levels of the aircraft they replace which will drive a doubling in titanium usage within the industry over the next ten years.”
One would expect EADS to respond with its own strategic sourcing agreement, given titanium’s vital importance to both its defense products and its Airbus subsidiary. They have now done so via a Memorandum of Understanding (MoU) with the Kazakh titanium supplier UKTMP and Aubert & Duval (A&D), a major supplier of metal-based aircraft components. The MoU covers the supply of titanium to Airbus and other Divisions of EADS, via a UKAD joint venture that will transform the titanium ingots delivered by UKTMP and improvie the vertical integration of the titanium supply chain to EADS and Airbus The MoU is potentially worth more than $1 billion, and is described as “part of EADS’ and Airbus’ global titanium strategy to secure the supply of such an important raw material.” EADS release.