VSMPO-Avisma stretches investment targets by two years
MOSCOW. Aug 20 (Interfax) - Titanium producer VSMPO-Avisma will not now round its investment program off until 2014 - two years after it was originally due for completion.
"We have said we intended to invest $1 billion to expand capacity to 44,000-46,000 tonnes by 2012, but now we think the program will be put back until approximately 2014," Vladislav Tetyukhin, a shareholder and board member in VSMPO-Avisma, told reporters ion the sidelines of the MAKS air show.
The final version of the new investment program has not yet been approved, he said.
"The crisis has adjusted out plans somewhat as concerns consumers. Some projects we were working on were mothballed or postponed. In particular, this concerns a program to produce parts for the A-380 and Boeing-787. Guidance on production was made based on them," he said.
Tetyukhin said the company was being guided by analysts' forecasts indicating that the economic decline will bottom out before the end of the year and demand for titanium products will then increase.
"Demand will be intense, and we should be ready for this when the problems are resolved with Boeing and Airbus planes," he said.
The company's investment plan will total $50 million in 2009 and "will be slightly higher" in 2010, he said.
VSMPO-Avisma's main strategic goals are to increase milled titanium product output 15%-17%, while supplying key branches of Russian industry with enough titanium alloys for their needs.
VSMPO-Avisma said in the autumn that it was revising its investment program. Apart from raising sponge output 20% to 44,000 tonnes by 2010, it originally planned to raise titanium roll production 46% to 46,000 tonnes by that year. It was targeting revenue of $1.7 billion-$2 billion and investment of $1 billion.
Vnesheconombank (VEB) agreed to contribute 9.388 billion rubles over five years to the titanium producer's investment program in September last year.
VSMPO is the world's biggest titanium producer, exporting around 70% if its output. The state Russian Technologies (Rostekhnologii) corporation owns 66% of the company.