Tetyukhin Vladislav Interview
Posted on 17. Mar, 2010 by admin in P - T, Tetyukhin Vladislav
INTERVIEW: Tetyukhin Vladislav, general director of the Upper Salda Metallurgical Association
Mikhail Kozyrev
Bulletin
August 28, 2002
VSMPO - only in Russia and the former USSR titanium producer. In Soviet times, the Soviet Union smelted titanium more than all the rest of the world put together; of the strategically important body of material made even submarines. However, in the early 90's. domestic consumption collapsed. Now, more than 75% of titanium is exported - it is about a quarter of the world market of titanium, whose volume is estimated at $ 1 billion a year. His delivery address the needs of Airbus, Boeing, Rolls-Royce, General Electric and other leading companies in aircraft industry. How affected the company's crisis in the global aircraft industry, what is happening with Russia's market for titanium and VSMPO plans to attract a strategic partner "Vedomosti" said general director of Tetyukhin Vladislav.
- What is the business today VSMPO?
- Up to 90's. in the Soviet Union was, in fact, a single complex for the production of titanium, consisting of four plants. Three plants were doing titanium sponge - Zaporozhye plant, Bereznyakovskaya factory and the Ust-Kamenogorsk plant. This sponge came to Upper Salda and are processed into ingots and billets (plates, sheets, tubes, profiles, Bielitz, etc.), which went on air, the Engine and shipyards. Approximately 55% of all products intended for civil and military aviation, 15% used in rocket and space technology, 15 - 20% went to the Navy, 15 - 20% - in the basic branches of heavy industry, power engineering, chemical engineering etc. Titan we did in the 1,3 - 1,5 times more than the entire Western world, including Europe, U.S. and Japan. That was such a system. Speaking on the domestic market, then all around and left. We continue to manufacture products for aviation and for the fleet, and so forth, but at a level commensurate with what it was before. Now 75% of production goes for export. Of these, 60 - 70% - aviation, the remaining 30% - a chemical engineering, energy, medicine, etc.
- In Soviet times, you practically did not export their products. As you come out to foreign markets? Immediately began to supply directly?
- In aviation, we can not work through intermediaries, to be direct contact - too much responsibility, requires a very high quality, it must feel, we must look into the eyes of their partners. We started with the fact that toured the entire aviation world. There is not one aviation company, which we had not visited. Since the end of 1992 and until the last show in Farnborough, we continuously make presentations, tell about your business, we invite you to imagine entering with consumers in direct contact. Over the years we received 136 certificates from all the world's leading firms - Boeing, Airbus, Bombardier, General Electric, Snecma, etc. If at the initial stage in the supply dominated ingots and slabs, and now we are exporting the entire set of pieces that are required for aviation and other industries.
- What is your share of the global titanium market?
- Our share in world production of titanium sponge - 28-30%, intermediate - 20-25%.
- What is the dynamics of exports you predicting?
- This year, given the events of last September and just the recessionary effects that are observed in the United States and Europe, exports will fall by 15-18%.
- But you have to Airbus and Boeing have long-term program of cooperation. There are prescribed amount of future purchases. You are not trying to insist on compliance with prescribed conditions in these agreements?
- If you do not need planes, then, accordingly, do not need titanium. There is a real reduction in the procurement of aircraft. Boeing this year will produce 380 planes next year - 285. Airbus this year and in the future will produce 300 cars. But there is no doubt that in 2003 they will be able to avoid recession. So reducing consumption of titanium and titanium alloys - a reality. Someone is suing - we prefer not to do.
- In June you signed a new agreement with Boeing. You have increased the percentage of supply of titanium?
- The new contract provides for the possibility of expanding both the volume and range of supply, depending on whether we meet the requirements for the discipline of supply. I can say that the old, existing contracts we are the second after Timet by volume shipments of titanium for Boeing. We - 16% (at Timet - about 70%, at RMI - 14%. - "Vedomosti"). Such was the ratio. And now only depends on us how we can move forward.
- And with Airbus? You're with them, too, last year signed a long-term agreement. It is performed?
- Our supply already exceeds 50% abroad. The quality they have no complaints if we are careful in the supply, if we develop in the desired range of dates that they require, we will be able to increase its presence.
- The agreement c Airbus states limit value of your share?
- No. In this sense, Airbus maintain sufficient flexibility.
- And who is supplying titanium for Airbus?
- Same as for Boeing.
- Engines, which are put on planes used for ground propulsion. And your products are on these engines. ..
- Yes, titanium is used on industrial engines. But now the recession in this market. Reducing goes and production of gas turbines and aircraft engines. These two markets have fallen at the same time.
- And what to do?
- I can say that the crisis affected all titanium company, but in varying degrees - depending on the degree of diversification. We have markedly fallen, exports - this year, I have already said, by 20%. The next year, we forecast a decline in exports by 5,7%, given the dynamics of building airplanes. However, the overall sales volume in VSMPO this year will only fall by 0,8%. And in the next - from the same 0.8% to 2%. First of all, due to the fact that rising consumption in Russia. Mainly due to military aviation, but it went the growth of orders for civilian aircraft.
- Who are Russia's consumers at whose expense this year, you can almost keep volumes of sales?
- Speaking of titanium, it is mostly aircraft industries MiG and Sukhoi, as well as engine-building factory, working with them. This Komsomolsk-on-Amur aviation plant, plant Irkutsk, Ufa Engine-Building Plant, Moscow's "Salute", NPO "Saturn". Some recovery now begins at the Ulyanovsk Aviastar and the Kazan aviation production association.
- It turns out that the drop in exports will be almost entirely offset by increasing domestic consumption. It is that, this year will grow 1,5 times? Do we have enough aircraft to grow?
- There are two reasons. First, somewhere in the 15 - 20% will increase the physical consumption. The second reason is that we have all these years, quite deliberately kept domestic prices at a low enough level, knowing in what condition are our defense and aircraft industries. Now their position has improved. They have become in recent years to do a lot of exports, and sometimes even working at the limit of its capabilities. So we decided to raise prices - up to acceptable to us the difference between domestic and export prices.
- What happened to your plans to attract a strategic investor? You have accumulated 10% stake in VSMPO, last year said that is in preliminary talks with several aircraft manufacturers to bring them in as investors.
- First, the issue is not removed from the agenda. ..
- But these actions, you the shareholders decided to cancel.
- It does not matter, because you can, if necessary, an additional issue. The fact is that now, maybe not the time to do it. When the market falls and the demand for titanium is reduced, not the best time for agreements relating to property. But this work is done, and I think that in two or three years, we return to this issue. On the other hand, is changing accents. Many companies, sensing the stability of supplies from VSMPO, transferred to our large volume of their supplies. For example, GoodReach, number one in the production of chassis for large passenger airplanes, a titanium core business has shifted to Upper Salda. I do not want to anticipate events, but do not rule out that the companies have placed in us a critical part of their business, want to participate in equity VSMPO to feel more comfortable and better control of the production process.
- And Russia's oligarchs are showing interest in you? There were rumors that SUAL any plans are being hatched to your account. ..
- Be interested in talks about a company to maintain its independence - security of this quality.
- How now shares control management VSMPO?
- Approximately 14%.
- And what is "Union of Upper Salda?
- When we were "swoops", it was decided to create a company "Union Upper Salda", which included about 12 000 people - employees VSMPO.
- How many "Union" shares?
- Approximately 38%.
- And the rest?
- A substantial control over the firm, which we know for sure, they do not sell. Together with the shares of management and the Union of Upper Salda "it gives more than 75%. And when we have this year and bought shares Darts (Kenneth Dart owned 15% stake in VSMPO. - "Vedomosti"), then [someone from] to buy shares in VSMPO become virtually impossible.
- Returning to the question of the strategic investor. .. We Avisma and VSMPO turnover of $ 350 - 400 million per year. It is not very much based on the global scale. ..
- This, of course, is not enough. To be a sustainable company, we must have a turnover of 1.2 - 2 times larger. To achieve this, we must work to diversify production. And we must look for partners that will provide diversification. We have, for example, has a unique equipment - a press force of 70 000 t. We are changing the entire production infrastructure to this press may be doing it all: impress not only titanium, it was originally intended, but also aluminum, steel and nickel alloys . This applies to the entire production as a whole. It is necessary to restructure it so that our unique technology, which is often not fully utilized, it was loaded on 70 - 80%. We need a partner who would join us interested in such a restructuring that our cooperation has a synergistic effect. Then indeed might be considered the possibility of very serious partnership. From this perspective, looks promising opportunities for cooperation not only with companies operating in the aircraft industry and transport, but also with companies engaged in power-plant engineering. For example, we began negotiations with General Electric. However, the market power machine is also now in crisis, so long as everything is stalled. But by the end of the year we will resume the talks. Prospects of cooperation with Russia's power engineering companies that expand its presence in the domestic and foreign markets.