Motor Sich considers helicopter assembly plant in Vinnitsa

Motor Sich (UX: MSICH UK), the CIS’ largest aircraft and helicopter engine producer, is in negotiations on the possible start of Mi-8T helicopter assembly at the Vinnitsa Aviation Plant, daily Kommersant reported today citing sources in the Vinnitsa Regional Administration. Yegor Samusenko: We do not believe Motor Sich’s steady scheme of producing engines in Ukraine for helicopters assembled in Russia will change in the mid-term. Both parties are claiming with some periodicity that they plan to establish the entire supply chain in one country, but we see little economic meaning behind these statements. Notably, Motor Sich said a year ago it would start its own helicopter assembly, but it invested zero CapEx in 2010 for this purpose. Should Motor Sich build the helicopter plant, it will be hard to find a market for these helicopters outside Ukraine due to the high associated sales costs, which makes the military aircraft market oligopolistic. Currently ~95% of helicopters with Motor Sich engines are flying outside of the country, with sales conducted by Russia’s Oboronprom.