The Redditch factory with links to Russia

On an industrial estate one hour south of Birmingham, a sign in red Cyrillic letters is the only hint that a small outpost of Russia’s military industrial complex is still quietly operating in the UK.

The site is home to the British arm of VSMPO-AVISMA, one of the world’s largest titanium producers, which is part-owned by Rostec. The state-owned Russian defence conglomerate is under sanctions for manufacturing fighter jets, missiles and other weapons used in the Ukraine war.

Located on the outskirts of Redditch, once an industrial heartland, the VSMPO subsidiary employed 28 staff as of the end of last year. It has distributed Russian-made titanium products to UK customers since Vladimir Putin’s full-scale invasion of Ukraine in February 2022.

At a time when hundreds of Russian companies are under UK government sanctions, its activity is completely legal because of a carve-out for Russian titanium in the sanctions regimes of Britain and other countries.

Titanium’s relative lightness, inexpensiveness and resistance to corrosion compared with steel have made it an essential material for the aerospace and defence industries, where it is commonly used to make landing gears, fastenings and some parts of aircraft bodies.

While most Redditch residents who spoke to the Financial Times were not aware of the factory or its ties to Russia, many were alarmed to learn of its presence.

“It’s hideous. It’s absolutely frightening and shocking,” said Susan Keynes, a 61-year-old teacher. “Why is it being allowed? From a humanitarian point of view, it needs to be shut down.”

VSMPO-AVISMA supplied more one-third of the world’s titanium market in 2021, according to rating agency Fitch, and provides large amounts of the metal to western companies in the aerospace and defence sectors.

The group’s biggest shareholder is Mikhail Shelkov, former head of Rostec’s investment division, who holds a 65.27 per cent stake, according to Interfax, the Russian news agency. Rostec owns a 25 per cent stake, plus one share.

Neither Shelkov nor Dmitry Trifonov, VSMPO’s chief executive, is sanctioned by any western governments except Ukraine.

Many other individuals and entities associated with Rostec have been put on the UK’s sanctions list since February 2022. These include JSC Kalashnikov Concern, Russia’s largest firearms manufacturer.

Rostec chief Sergey Chemezov, a close friend of Putin since their days in the KGB security agency, has been under UK and EU sanctions since 2014.

According to its most recent accounts filed with Companies House, the UK corporate register, VSMPO’s factory in Redditch is fully capitalised through trading balances with its parent company in Russia, its main trade creditor.

Neither the subsidiary nor the parent company responded to multiple requests for comment.

In the weeks after Moscow’s invasion, with companies in many other industries preparing to exit and divest from Russia, business at the factory was booming as buyers scrambled to stockpile titanium, according to a former employee.

But some workers had concerns about the company’s links to Rostec; at least one quit citing moral reasons.

“Business actually picked up dramatically as customers wanted everything they could lay their hands on in an attempt to stockpile and manage risk,” said the former employee. “Material was flowing at a rate I had never seen before.”

Export data analysed by the FT shows that the subsidiary has imported multiple tonnes of titanium alloy and other materials into the UK from its Russian parent since February last year.

Many of these shipments, according to Russian export certificates aggregated by Import Genius, have been made on behalf of UK-based aerospace suppliers, some of which work on military fighter jets used by members of the Nato security alliance.

One import of titanium alloy machine sheets sent from Russia to Redditch in February 2023 was labelled as being on behalf of ITP Aero UK — a company involved in the EJ200 engine programme for Eurofighter Typhoon jets.

Another Russian shipment of forged titanium, also sent in February, was labelled in the Russian export certificate as being destined for Rolls-Royce, the FTSE 100 group.

Boeing said in March that it would suspend purchases of Russian titanium. Safran, Airbus and Rolls-Royce have said they still source titanium from Russia and are negotiating contracts with alternative suppliers. All three companies stressed that they complied with western sanctions against Russia.

ITP Aero UK said it was reducing its reliance on Russian titanium and would end purchases in 2024. The UK government said it had placed £20bn of UK-Russia trade under full or partial sanctions, and that Russian imports to the UK had dropped by 99 per cent since 2021.

In September 2023, Washington placed VSMPO-AVISMA on its entity list of companies, which requires affected companies to gain additional licences before doing business in the US.

Peter Zimm, principal at aerospace consultancy Charles Edwards, said Moscow’s invasion had underlined the urgency of diversifying titanium supply chains for European companies, whose geographical proximity had made them more reliant on Russia.

David Dye, professor of metallurgy at Imperial College London, said companies had been encouraged by western governments to buy titanium from Russia in the early 1990s as the cold war ended. “For jet engines, if you want to use a different [supplier] you’ve got to spend months and millions qualifying that,” he added.

In Redditch, where more than 53 per cent of households are deprived according to one or more metrics used by the Office for National Statistics, residents have complex feelings about VSMPO’s presence.

“Nobody wants local people to lose their jobs, that’s the problem,” said Joe Baker, Labour head of the local authority. “If a company is employing people, you’ve got to take that into consideration, but you’ve also got to take morals into consideration as well.”

For some refugees from Ukraine who have settled in the town since fleeing their home country last year, a factory that has links to Russia’s war effort being a stone’s throw from their new homes is an unwelcome surprise. 

“I’m shocked and don’t really know how to react,” said Sofia Isakova, a 33-year-old originally from Odesa. “I’m trying not to think about it, as I know there’s nothing I can do.”

Additional reporting by Sylvia Pfeifer in London