02 OCTOBER 2013Metalbulletin.com
Rusal signs agreement to convert western Russian smelters
Edited by : AL CIRCLE
2 min read
United Co Rusal will convert its loss-making Russian aluminium smelters to the production of vehicle components as well as rolled and cable products, it said on Monday September 30.
To fund the transformation, Rusal has signed a memorandum of intent with state-owned development bank Vnesheconombank (VEB).
New production facilities will be constructed at the Bogoslovsk, Urals, Nadvoitsy, Kandalaksha, Volkhov and Volgograd aluminium smelters, all part of Rusal’s Aluminium Division West. New facilities are also feasible at Rusal’s other Russian sites.
Finished goods will be supplied to the Russian market, where Russian and foreign carmakers have commitments to boost the share of Russian-made parts in their supply chains.
Under the agreement, Rusal will attract investors, provide existing industrial infrastructure and ensure aluminium supply to the facilities. VEB will “consider its participation in investment projects which have been proposed by Rusal and that are in line with VEB’s investment and financial policies”, Rusal said.
Rusal has been vocal about the need for cuts in global primary aluminium production, and has itself announcedplans to cut more than 350,000 tpy of loss-making production this year.
By converting facilities to downstream production, and attracting financing from VEB, Rusal hopes to turn these smelters back to profit.
The impact on London Metal Exchange aluminium prices, however, is likely to be minimal, compared with if the company cut the production altogether.
“The memorandum with VEB will significantly expand opportunities to attract new partners and investors,” Rusal said.
In June, Rusal signed a memorandum of understanding with Israeli company Omen High Pressure Die Casting for the production of auto parts at the Volkhov aluminium smelter.
Last year, Rusal announced plans to boost aluminium alloys production at its Aluminium Division East smelters by 70%, at the expense of primary metal output.
To fund the transformation, Rusal has signed a memorandum of intent with state-owned development bank Vnesheconombank (VEB).
New production facilities will be constructed at the Bogoslovsk, Urals, Nadvoitsy, Kandalaksha, Volkhov and Volgograd aluminium smelters, all part of Rusal’s Aluminium Division West. New facilities are also feasible at Rusal’s other Russian sites.
Finished goods will be supplied to the Russian market, where Russian and foreign carmakers have commitments to boost the share of Russian-made parts in their supply chains.
Under the agreement, Rusal will attract investors, provide existing industrial infrastructure and ensure aluminium supply to the facilities. VEB will “consider its participation in investment projects which have been proposed by Rusal and that are in line with VEB’s investment and financial policies”, Rusal said.
Rusal has been vocal about the need for cuts in global primary aluminium production, and has itself announcedplans to cut more than 350,000 tpy of loss-making production this year.
By converting facilities to downstream production, and attracting financing from VEB, Rusal hopes to turn these smelters back to profit.
The impact on London Metal Exchange aluminium prices, however, is likely to be minimal, compared with if the company cut the production altogether.
“The memorandum with VEB will significantly expand opportunities to attract new partners and investors,” Rusal said.
In June, Rusal signed a memorandum of understanding with Israeli company Omen High Pressure Die Casting for the production of auto parts at the Volkhov aluminium smelter.
Last year, Rusal announced plans to boost aluminium alloys production at its Aluminium Division East smelters by 70%, at the expense of primary metal output.
Previous article
Quebec aluminum producers seek lower energy costs
Next articleOrmet seeks more time to file Chapter 11 bankruptcy plan
Grow with
AL Circle
