VSMPO-Avisma to continue operations, acting CEO's statement about possible shutdown is his "personal opinion" - Rostec
MOSCOW. June 22 (Interfax) - A plant shutdown at VSMPO-Avisma that the acting CEO of the world's largest titanium producer said was possible due to a lack of orders from the aircraft industry is not being considered by the company's shareholders, state corporation Rostec, which holds a blocking stake in VSMPO-Avisma, said.
"The statement of interim CEO Maxim Kuzyuk does not reflect the reality," Rostec said, remarking that Mikhail Shelkov, who owns 65.3% of VSMPO-Avisma, agrees with its position.
Kuzyuk said last week that VSMPO-Avisma Corporation's plant in Verkhnaya Salda, Sverdlovsk Region, its main titanium production facility, might be shut down completely in the fall if the company does not get new orders.
"We considered August for the shutdown, [but] today we decided that we will not shut down in August, we're considering September. But the decision will be made depending on how many orders we actually put in the system, because operating at low capacity is even worse than a complete shutdown," Kuzyuk said at a meeting with representatives of the company's workforce. However, he said this would only be a last resort and now the company's objective is to find new orders.
"These comments are the personal opinion of Maxim Kuzyuk and do not have anything to do with the reality. The possibility of shutting down production processes was never considered by shareholders. Plants are operating and will continue to operate as usual," Rostec said.
"Against the backdrop of the decline in air traffic and the general situation with the pandemic, VSMPO-Avisma Corporation has indeed had to significantly adapt plant operations by revising a whole range of programs. For example, in April, output targets for titanium products in 2020 were lowered, non-production expenses have been reduced significantly and the investment program has been temporarily suspended. These measures are aimed, foremost, at maintaining the operating capacity of plants and preserving jobs," VSMPO-Avisma's shareholders said.
"Today there are signs of recovery in the global aviation industry and growth of economic activity among the company's largest customers in Europe and the United States. Partners are beginning to resume previously suspended contracts. This makes it possible to expect that the final amount of orders for 2020 might increase. The planned amount of company orders for 2020 is 26,500 tonnes," Rostec and Shelkov said.
"Therefore, even in the most conservative scenario for the development of the situation on the world titanium market, the company can ensure revenue over $1 billion. This is sufficient for the stable operation of plants in 2020," they said.
