Boeing and VSMPO Avisma to launch second joint production site

Boeing 777X is one of the programs to benefit from Ural Boeing Manufacturing (Image by Boeing)

A new production site of Ural Boeing Manufacturing (UBM) will become operational in the first quarter of 2018. UBM is a 50/50 joint venture between Boeing and Russian titanium giant VSMPO Avisma, based in Sverdlovsk Region, Russia’s Urals. Construction of the new site, which will double UBM’s production capacity, is already underway.

The new site will be highly automated and capable of final, as well as rough machining of components for Boeing’s commercial programs 737MAX, 777, 787 and the new 777Х. The production of the latter model is scheduled for next year.

The facility will have the floor of nearly 20,000 square meters. Neither of the partners has disclosed the investment into the new facility or the projected volume of titanium it will produce.

It is however assumed that even after the new site reaches its full capacity, UBM’s share in Boeing Commercial Aircraft’s total titanium supply will remain largely the same at 35%, as the OEM’s demand for titanium is growing proportionately to UBM’s output. Particularly, 787’s monthly production rate will be boosted from the current 12 to 14 aircraft.

Titanium will also be needed for the new Boeing 777X program, the backlog for which now stands at 320 firm orders. Notably, according to a contract signed at MAKS-2015 air show near Moscow the joint venture is Boeing’s key supplier of moulded parts for Boeing 777X.

Boeing also emphasized that its Russian joint venture supplies parts for third parties, including General Electric and Rolls-Royce, as well as manufacturers of landing gear. That brings the final share of UBM’s production on Boeing aircraft to over 35%.

The Ural Boeing Manufacturing joint venture was founded in Russia in 2009 (Photo by Russian Aviation Insider)

The new plant will become an achor resident of the so called Titanium Valley, a special economic zone in Sverdlovsk Region, which grants a number of benefits to UBM. For example, the company will be exempt from customs duties and import VAT. Thanks to these special provisions UBM will be able to save up to 30-40% on its purchases of imported equipment and thus reduce the project’s turn-around period. The issue of relocating the first plant, which was opened in Verknyaya Salda in 2009, to Titanium Valley, will be considered later.

Commenting on the partnership in a complicated political environment, Boeing said that political frictions “don’t help aviation”, and that it is a challenge to work in uncertain and unpredictable conditions. However, a spokesperson for the OEM emphasized, all projects with VSMPO Avisma are long-term programs, and expressed hope that the political situation will not affect the partnership.

Boeing’s strategic partnership with VSMPO Avisma dates back to 1997. The UBM joint venture was founded in 2009. At MAKS-2013 the parties signed an MOU for doubling Ural Boeing Manufacturing’s production output. The initial plans called for the new site to be in place by 2016.