CHICAGO (Reuters) - Metals company Alcoa Inc said on Thursday it has signed two long-term supply contracts with plane manufacturer Boeing Co worth more than $2.5 billion that will be part of its value-added business once the company splits in the second half of 2016.
One of the contracts is for fasteners and the other for lightweight titanium seat track assemblies, which hold seats in place and bear the weight of passengers.
The contracts involve providing parts for the 737 MAX, 777X and 787 Dreamliner.
“This is a major contract for us,” Alcoa Chief Executive Klaus Kleinfeld told Reuters. “This shows the strength we have been able to build in this complicated business.”
In October the company announced a similar $1 billion contract with Airbus to provide fasteners for the A350 XWB, A320neo and A330.
Alcoa has bet on growth from titanium and high-strength aluminum sales to the aerospace industry as its order book swells for airplane production and amid renewed global spending on automobiles. About 40 percent of revenue for the new value-added business was generated by the aerospace sector.
After the split next year, Alcoa’s traditional business, which also includes better-performing bauxite and alumina, will retain the Alcoa name. The newer company has yet to be named.
Reporting By Nick Carey; Editing by Bill Trott