UC Rusal to expand partnership with China

United Company Rusal, the world's largest aluminum producer, plans to expand its long-term partnership with Chinese aluminum corporations, said Oleg Deripaska, CEO of UC Rusal, at the 27th International Aluminum Conference 2012, which was held from Sept 12 to 14 in Moscow.

The price of metal is well below the pre-crisis level, while production costs have soared significantly. More than 30 percent of global businesses in the industry are unprofitable at the current aluminum price.

"The heavy burden of overcapacity and high stock levels caused by the financial crisis and eurozone debt crisis has exerted huge pressure on the aluminum industry. To remain competitive, the industry should be more focused on its customers, requiring greater collaboration between manufacturers and producers," Deripaska said.

UC Rusal was founded in 2000. The current company was formed by the merger of Siberian-Urals Aluminium Company and the alumina assets of Glencore in March 2007. With a staff of 72,000, the company now has more than 40 plants in 19 countries and regions across five continents.

The company is currently focusing on strengthening its competitive advantages, including low production cost, considerable raw material base, proprietary R&D capabilities and proximity to key markets.

UC Rusal is famous for its proprietary energy-saving smelting technologies, such as RA-300, RA-400 and RA-500. It is also vigorously dedicated to new breakthroughs in technology, including a revolutionary inert anode technology.

Khakas Aluminium Smelter, owned by UC Rusal, is by far the most up-to-date and technologically advanced smelter in Russia and one of the most state-of-the-art smelters in the world.

Complying with the 10 principles of the UN Global Compact, UC Rusal is striving to become a leading enterprise in terms of health, safety and environmental protection. It has made plans to reduce greenhouse gases by 50 percent by 2015 and to realize carbon neutrality in all its aluminum products. It also actively participated in energy efficiency activities coordinated by the International Aluminium Institute and Russian National Carbon Union.

With secure access to low-cost green and renewable hydro energy in Siberia, an abundant supply of raw materials for aluminum production, proprietary smelting technology and proven in-house construction expertise, UC Rusal is in a prime position to supply high-quality aluminum for the rest of the world.

UC Rusal is in close proximity to China, which makes it possible for goods to be delivered in four to eight days from Russian seaports in the Far East to Shanghai. This advantage helps UC Rusal to cooperate with Chinese aluminum corporations.

"To cooperate with China is a very important step for our development. We will further promote cooperation in terms of R&D and technology," said Oleg Mukhamedshin, deputy CEO of UC Rusal.

"We have a relatively low electric power cost and advanced technology, which will attract more and more Chinese enterprises to invest. And we have both benefited a lot from our previous cooperation."

In November 2011, two of UC Rusal's famous brands, Irkaz Sual and Rusal KH, produced at the Irkutsk and Khakas aluminum smelters were registered at the Shanghai Futures Exchange, which was a milestone signifying the establishment of UC Rusal business sites in China, the world's biggest aluminum consumer.

North United Aluminium, which is responsible for trade services for aluminum, alloy and other non-ferrous metals, was jointly established in Shenzhen by Rusal and China North Industries Group Corporation (Norinco), and it began operating in April 2012.

"The establishment of the joint venture company marked a new development stage for Rusal, which will provide favorable conditions for economic and trade cooperation between the two countries," said Luo Ganyi, deputy general manager of Norinco.

To achieve sustainable development and promote mutually beneficial cooperation, Rusal became a member of the China Nonferrous Metals Industry Association, the most influential national non-profit organization in China, in July this year. It then signed an agreement in August with the association.

"Despite current economic problems facing China, I hold an optimistic attitude toward cooperation with Chinese aluminum enterprises. And I believe China will maintain a growth rate of 7 to 8 percent." said Deripaska.