Airbus announced that it has signed a Memorandum of Understanding (MoU) with VSMPO-AVISMA, a major supplier for Airbus, to manufacture and supply value-added titanium products.
The contract expands the long-term partnership of both the companies and ensures the strategic position of VSMPO-AVISMA in the EADS/Airbus supply chain.
Based on the agreement, Airbus and VSMPO-AVISMA have planned to expand their activities from the delivery of the titanium raw material and forgings to value-added products. The MOU includes different strategic collaborations, including development of new alloys for use in the EADS/Airbus programs. The agreement also includes joint development projects, combined as the "Vertical Integration Project". This project extends the activities of VSMPO-AVISMA to rough machining or pre-machining of titanium components for the vertical supply chain.
VSMPO-AVISMA’s General Director, Mikhail Voevodin stated that the development of a vertically integrated supply chain network is a part of the company’s strategy. The initiative will allow VSMPO-AVISMA to better control the product quality and costs during the entire production cycle. The company is one of the significant suppliers of Airbus and satisfies 60% of their titanium needs in forgings or semi-finished products.
In 2009, VSMPO-AVISMA and EADS/Airbus have entered a long-term agreement till 2020 for the supply of titanium to Airbus and other EADS businesses. Based on the agreement, Airbus controls the distribution activity to the overall EADS supply chain.