World Aluminum Tycoons Favor Chinese Market

'To invest in China' is probably the largest desire that Alexander Buygin, the young CEO of United Company RUSAL wants to express to the Chinese reporters.

Recently, at the Moscow HQ of RUSAL, Alexander Buygin revealed to the reporters about the three-billion-dollar investment plan made for China. He also said that, even under the unfavorable circumstance of international financial crisis, the company's projects in China would not shrink.

New tycoons in global aluminum production

Compared with those long-history companies like Aluminum Company of America (ALCOA) and Rio Tinto Canada Aluminum Company (RTCAC), United Company RUSAL might be too young. However, since the establishment in March of 2007, its aluminum and alumina production has occupied twelve and fifteen percent separately in the global total amount, which has made it the largest aluminum producer in the world.

In fact, United Company RUSAL was incorporated by the former third largest aluminum company in the world RUSAL, the tenth largest aluminum company Sibir-Ural Aluminum Company (SUAC) and other companies. The new company contains fifteen aluminum smelters, twelve alumina smelters, seven bauxites, three aluminum foil companies and two carbonium companies. Its products cover transportation, architecture and package industry, its clients spread over seventy countries and it owns over 100 thousand employees in nineteen countries of the world.

Besides the large scale, its production cost of aluminum products has always been kept at the lowest level of the industry. The continuous increase of profits also serves as a pride of United Company RUSAL. This has to be attributed at a great extent to the fact that its main producers are located at Siberia region, near to the Sayano-Shushenskaya Hydropower Station which is next only to the Three Gorges Hydropower Station, so that they can develop production with the clean and cheap water-power resource.

Concerning this matter, Alexander Bulygin was quite confident that the company would lead in the world in aspects of environmental protection level and profit margin. He said, 'when our competitors, like ALCOA, RTCAL and Norsk Hydro ASA, spent fifty months and ten thousand dollars per ton to increase their production capability, with the environmental protection technique, we only need to invest far lower than their cost, but the speed of putting into production can be far ahead.'

Strengthen cooperation with Chinese enterprises

As the world largest aluminum and alumina producer now, in the increasingly deepened economic cooperation between China and Russia, United Company RUSAL has made long-term development plan for Chinese market. In February of this year, United Company RUSAL and China Power Investment Corporation (CPIC) signed an Agreement of Intent to Build Strategic Partnership regarding the fields of bauxite, alumina and aluminum production, and planned to develop a comprehensive vertical integration project of aluminum smelting, including the construction of a water-power aluminum smelter with an annual production of 500 thousand tons in Qinghai Province.

'For United Company RUSAL, the cooperation with China is a long-term strategic plan.' Alexander Bulygin emphasized, 'United Company RUSAL is the most efficient aluminum company in the world and also the nearest to China. We have rich bauxite resources and our mineral reserve can satisfy the production need in one hundred years including alumina and aluminum smelting, power generation and production and process of other non-ferrous metals. The projects constructed in each field will guarantee our leading position in the future tens of years.'

Compared with the geographic location, a fact more important is that China will become the world largest aluminum consumption country. It's known that at present the anticipated compound annual growth rate of the world aluminum products consumption has reached 3.6 percent. However, this figure in China has been far more over the world average level. It's estimated that till 2010, the short-term increasing rate in China will be even 16.8 percent.

Taking the advantage of being in a favored position, Alexander Bulygin disclosed also the package program of the company to invest about three billion dollars in China in the future five to ten years. Besides the investment project with CPIC, this program also prepares to construct anode block plants and aluminum foil plants as well.