UPDATE 1-Kazakh plant in $1 bln titanium deal with Airbus
ASTANA, Feb 8 (Reuters) - A Kazakh company will supply titanium for EADS (EAD.PA), the European aerospace group, in a deal estimated at $1 billion, officials said on Friday.
A memorandum on the agreement was signed as part of a visit by French Prime Minister Francois Fillon to the central Asian nation, the world's third largest producer of titanium sponge.
The deal reflects growing competition between EADS's planemaker Airbus and rival Boeing (BA.N) for supplies of titanium -- a resistant and lightweight metal which is in demand to help build fuel-efficient jetliners.
Russia's VSMPO-Avisma (VSMO.MM), the world's largest titanium producer, signed a supply deal also worth around $1 billion with Boeing (BA.N) in December.
Friday's deal calls for UKTMP of Kazakhstan and its French partner, metals firm Eramet (ERMT.PA), to supply Airbus.
Eramet's Aubert & Duval subsidiary and UKTMP are setting up a joint venture, to be named UKAD, with an initial investment of 40 million euros ($57.97 million).
An aide trvelling with Fillon said the deal was worth 850 million euros spread over 12 years.
Titanium is in demand in the aerospace industry to produce tough but lightweight alloys and to supply increasing production of wide-body aircaft with higher titanium content.
The next generation of single-aisle jets seating 100 to 200 passengers is also expected to feature more of the metal.
Boeing and Airbus are expected to offer new aircraft in this category from the middle of the next decade.
In Paris EADS said in a statement it had also signed a memorandum of understanding with the Kazyna Sustainable Development Fund for a strategic partnership in the development of the aerospace industry and related services in Kazakhstan. (Reporting by Maria Golovnina, Sophie Louet; Editing by Greg Mahlich)
