Titanium suppliers to Boeing and Airbus, is considering temporarily halting production in September.
Russia’s state-owned VSMPO-Avisma, one of the world’s largest titanium suppliers to Boeing and Airbus, is considering temporarily halting production in September if the business does not improve, its interim chief executive said, Reuters reports.
The Russian company has been hit by the Covid-19 pandemic, which has grounded most passenger planes worldwide and has reduced demand for its products from aircraft manufacturers.
“Closure is an extreme measure. And we are not going to take that extreme measure in August. Now we are thinking about September. The decision will depend on how many orders we receive in the early fall, ”VSMPO interim CEO Maxim Kuzyuk quoted in a recent meeting with the company’s union.
The situation in its sector will continue to be very difficult this year, but the company still hopes to find enough orders to cover its costs and avoid closing. “The suspension is highly unlikely,” VSMPO told Reuters on Thursday.
VSMPO held talks in June with aircraft manufacturers, its main clients under long-term contracts, and agreed to continue buying a quantity of the titanium products.
The company is also in talks to increase supplies to Russian aircraft manufacturers, as it is now less busy with orders from its main foreign clients.
VSMPO cut its 2020 production forecast by 32% to 26,500 tonnes in April, when the massive effect of the coronavirus in its sector became apparent.
Currently, the company produces between 1,200-1,300 tons of titanium products per month, down from 2,700 tons the previous year. It expects to increase its monthly production to 1,500-1,600 tonnes in 2021, Kuzyuk added.