RTI, Boeing sign 10-year, $900M supply agreement

RTI International Metals Inc. announced November 12 that it has signed a 10-year agreement with The Boeing Company to supply extruded, welded and fully machined value-added structural titanium components for the Boeing 787 Dreamliner. The contract is estimated to generate in excess of $900 million in revenue over its term which commences in 2008 and runs through 2017.

RTI will act as the lead integrator on the PAX Floor Pi-Box Seat Track program through its Fabrication & Distribution Group (F&D). RTI’s Houston and recently completed Montreal facilities, as well as multiple supply chain partners, will support the production of the finished titanium components used for the seat tracks in the floor structure of the Boeing 787.

This requirements-based contract extends RTI’s role related to seat tracks on the 787 program that commenced with its earlier contracts with Fuji Heavy Industries Ltd. (FHI) and Kawasaki Heavy Industries Ltd. (KHI). RTI will begin recognizing revenue from this new contract at a modest level in 2008, ramping up in the second half of 2009. It is anticipated that the agreement should hit full rate by mid 2010 generating revenue in excess of $100 million per year.

“Our combined total of $4.0 billion in recently signed long-term agreements, including the one announced today, positions us extremely well for accelerated growth and profitability in 2010 and beyond,” said RTI vice chairman and chief executive officer Dawne Hickton. “This contract deepens RTI’s long-term participation in the 787 program and is another step forward in the company’s long-term strategy to be a fully-integrated supplier of higher value-added products and services. The contract also reinforces RTI’s ability to invest in and leverage its vertically integrated supply chain to add value as well as provide complete solutions to our customers globally.”