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Metals Firms Urged to Ensure Supplies for Planes and Arms
State arms exporter Rosoboronexport held a closed meeting on Tuesday to call for Russian metals producers to reign in their export ambitions and concentrate on supplies for the domestic market, metals industry sources said.
Targeting domestic producers, which have contracts with the defense and aviation industries, Rosoboronexport is keen to secure a full supply of metals and equipment as the state increases arms exports and works to revitalize the civil aviation industry, sources said.
Rosoboronexport confirmed the meeting took place by telephone, but declined to elaborate.
"State officials expressed their interest in closer cooperation. They want to increase state orders for metals and were concerned that exports could put certain state programs at risk," a manager at a Russian metals firm said on condition of anonymity. State takeovers in the metals sector were not discussed, he said.
Russia is pinning hopes of revitalizing its aviation industry through the state-led Russian Regional Jet program. Sukhoi Civil Aircraft already signed the first sale to Dubai-based Concord Aviation last year in a $1 billion deal. The RRJ will have its first test flight in 2007. Export arms sales rose by 61 percent to $6 billion in 2005.
Some producers welcomed the meeting but remained cautious as to whether the promise of more state contracts would be enough to make Russian manufacturers more domestically orientated.
"If the state is ready to increase state orders, then we welcome it," Alexei Sotskov, a spokesman for No. 5 steelmaker Mechel said by telephone. At present, just over half of Russia's steel is sold domestically.
"Even if we believe forecasts that domestic titanium demand will triple by 2015 to 15,000 tons, we are still left with 20,000 tons of titanium that need to go somewhere," VSMPO-Avisma board chairman Vyacheslav Bresht said.
"We expected to hear some more information about AT-Spetstekhnologia, but that was hardly aired," Bresht said.
Rosoboronexport set up AT-Spetstekhnologia in January as part of a state initiative to gain a foothold in the metals sector.
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