The State Corporation "Russian Technologies" (Rostechnologii, RT) and JSC "United Aircraft Corporation" (UAC) today signed an agreement on cooperation. The document was signed by Sergei Chemezov, Rostechnologii General Director and Chairman of Russia's Machinists Union, and Aleksey Fedorov, UAC President and Chairman of the Executive Board.

The purpose of the agreement is to further develop existing industrial cooperation, targeting higher competitiveness of Russian-made products, concentrate industrial and financial resources on future aviation programs involving creation of new aircraft designs.

The sides aim at strengthening positions of the Russian aviation industry enterprises in the domestic and international markets by creating a more effective system of interaction between Rostechnologii and UAC. This system will allow to reduce manufacturing costs of vendor items that UAC buys from Rostechnologii member enterprises, while at the same time increasing output of new Russian-made aircraft. This is very important due to the fact that the share of vendor items in the overall manufacturing expense on a Russian commercial airliner sometimes can reach 80%.

The newly signed agreement will improve profitability of UAC's delivery contracts and allow a more attractive combination of pricing, quality and production rates pertaining to the UAC production program 2009-2012. This concerns most of UAC's civil and military programs including the Tu-204SM and MS-21 commercial airliners, the Future Aviation Complex of Fifth Generation (Russian acronym PAK FA), Su-35 and MiG-35 combat aircraft.

UAC is ready to offer its suppliers that are Rostechnologii members, guarantees pertaining to volumes of firm orders for vendor items in the period for the next three to five years and more. The sides have also declared their intent to accept a new, more flexible pricing policy when determining acquisition prices on vendor items, taking into account instability of prices on raw materials and electric power, tax regime and banking interest rates.

The volume of orders that UAC is going to award its suppliers that are Rostechnologii members is estimated at 30 billion roubles by 2012 for civilian programs only.

The sides have also agreed on joint funding of their programs and marketing efforts, including technical renovation of the supply chain enterprises and after sales support. Special attention will be paid to programs on development of the supply-chain enterprises that are Rostechnologii members.

More than eighty enterprises in the UAC supply chain are Rostechnologii members. Those include companies specializing on systems components, instruments, avionics items, construction materials and aero engines.

Speaking at the signing ceremony, Russian Technologies Corporation General Director Sergei Chemezov said: "aviation industry is the industry where most advanced technologies are being created and employed. We aim to create a unitary technological environment and minimize manufacturing costs. This is the way to provide competitiveness of Russia as a top-tier aviation nation".

"This agreement will allow us to improve attractiveness of our products, especially the Tu-204, Il-96 and An-148 commercial jets, in the eyes of the airline customers, and provide a sufficient backlog of orders for our suppliers that are members in the Rostechnoligii State Corporation. We aim at reducing manufacturing costs, improving competitiveness of our products and their quality, as well as providing world-class level of customer support".