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Germany's MTU Aero explores alternative raw material sources to Russia

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Blades of a MTU Aero Engines V 2500 HPC aircraft engine are pictured at the ILA Berlin Air Show in Schoenefeld
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By Abhijith Ganapavaram

(Reuters) - MTU Aero Engines AG is exploring alternative suppliers to help it wean off raw material dependency on Russia from 2023, the German aircraft engine maker said on Wednesday, as the aviation industry rethinks supply chains amid broad sanctions on Moscow.

"We cannot definitively assess the potential effects on MTU's supply chain at present due to the overall volatile situation," MTU said in an emailed statement.

MTU, which works with companies such as General Electric Co and Raytheon's Pratt & Whitney to manufacture aircraft engines, procures about 10% of its titanium requirements from Russia.

Another aircraft parts supplier, FACC AG, said on Wednesday that it was procuring raw materials from sources other than Russia.

"As the aerospace industry is ramping up fast and demand is increasing, we will be in need of more supplies, but we are confident that we can get these on the market," FACC Chief Executive Robert Machtlinger told Reuters.

Sweeping sanctions against Russia for invading Ukraine have led aerospace companies to take a deeper look at their vast and often complex supply chains, as the big planemakers seek to ramp production.

A particular focus is on the supply of titanium, a lightweight but strong metal that is used widely in planemaking, given Russia's position as a major supplier.

Boeing said on Monday it had suspended buying titanium from Russia, while Airbus said it continues to use supplies from the nation that hosts the world's largest supplier of the commodity, VSMPO-AVISMA.

Brazilian planemaker Embraer SA said on Wednesday it has no immediate concerns regarding the supply of titanium but added that it was seeking alternative sources.

Canada's Bombardier Inc has said it doesn't source titanium directly from Russia. Instead, titanium on the business jet maker's aircraft is obtained through its major suppliers or distributors who primarily source a vast majority of the metal outside of Russia.

(Reporting by Abhijith Ganapavaram in Bengaluru and additional reporting by Allison Lampert in Montreal; Editing by Shailesh Kuber)

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