RUSAL Corporation or Russian Aluminum is one of the largest Russian private companies. This corporation also actively interacts with partners representing countries of near and far abroad, and is one of the most powerful players in the corresponding segment of the world market. What is she releasing? Who owns and runs the company?
Company Overview
RUSAL is considered one of the largest enterprises in our country and the world's largest producer of aluminum and alumina. Legally, this company is registered on the island of Jersey, which belongs to the UK. The total capacity of aluminum smelters owned by the corporation is about 4.4 million tons, alumina - about 12.3 million tons. In the Russian market, in terms of revenue, RUSAL is second only to the largest oil and gas corporations.
Company History
RUSAL was founded in 2007 as a result of the merger of assets of Russian enterprises - Russian Aluminum, SUAL, as well as the Swiss company Glencore. It can be noted that the symbolism belonging to Russian Aluminum has been preserved in the new united corporation.
In fact, in the structure of RUSAL corporation there are factories founded back in the early Soviet period. So, the first domestic aluminum plant was launched in the USSR in 1932 in the city of Volkhov. The electricity supplier at the enterprise was Volkhov hydroelectric station, bauxite raw materials were also mined nearby. In 1933, a similar enterprise was launched in Zaporozhye, in the Ukrainian SSR. In the late 30s, the development and mining of bauxite began, and, accordingly, the production of aluminum and alumina in the Urals: Soviet industrialists launched the Ural Aluminum Plant.
When the Great Patriotic War began, the plant in Zaporozhye was seized, Volkhovsky was in danger, so the Soviet industrialists decided to build new plants in the rear - in Krasnoturinsk and Novokuznetsk. After the war, the Soviet economy experienced a growing need for aluminum. New plants began to open in the regions of Eastern Siberia. In 1960, the world's largest aluminum plants opened in Krasnoyarsk and Bratsk. In order to provide these enterprises with alumina - mainly imported at that time, plants were built in Achinsk and Nikolaev.
In 1985, the Sayanogorsk Aluminum Plant was opened in Khakassia. It can be noted that by the end of the 80s the USSR came out on top in the world in aluminum production. The country exported metal quite actively. Sayanogorsk aluminum smelter contributed significantly to the growth of this industry. But soon after its discovery in the USSR, certain difficulties began, perestroika, and then the collapse of the country.
The formation of the Russian Aluminum Corporation was preceded by the period when two other major players in the metallurgy market entered the world market - Siberian Aluminum, as well as Sibneft, which also had aluminum assets. In 2000, these corporations pooled their assets, resulting in the formation of Russian Aluminum. The corporation included the largest aluminum plants in Russia and Ukraine.
Subsequently, the company began to actively expand its activities abroad. But the corporation also actively developed in the Russian market. So, in 2006, the Khakass Aluminum Plant was opened, also in Sayanogorsk. It can be noted that by 2007 Russian Aluminum controlled about 80% of the industry in its segment in Russia.
As for the other subject of the transaction, as a result of which RUSAL was formed - SUAL, it can be noted that this corporation was founded in 1996 in Kamensk-Uralsky. In the course of its development, it rather actively bought enterprises for the production of aluminum - but, as a rule, relatively small. Also, this company acquired the Zaporizhzhya Aluminum Plant. In fact, by 2007, SUAL controlled that part of the market that did not belong to Russian Aluminum, that is, its share in the segment was about 20%.
But, one way or another, in 2007 the two companies merged, as a result of which RUSAL OJSC was established.
The company during the crisis of 2008-2009
The corporation had to overcome quite a lot of difficulties during the economic recession in Russia in 2008-2009. It is known that the company had difficulty repaying loans. However, the corporation managed to cope with the problems. Between October and December 2009, RUSAL entered into a number of agreements with large banks, both Russian and foreign, on the restructuring of debts in the amount of approximately $ 16.8 billion.
Who owns and runs the corporation?
It will be useful to consider the structure of ownership of the corporation, as well as how it has changed over time.
Until 2010, the largest shareholder of the company was the En + holding, which was controlled by Oleg Deripaska. The next largest share of assets belonged to SUALU. The ONEXIM group, owned by Mikhail Prokhorov, owned the third largest shareholding in the corporation. Another major shareholder of RUSAL was Glencore.
In January 2010, the corporation carried out an IPO on the sites of the Hong Kong Stock Exchange. During the bidding process, the company managed to sell about 10.6% of the shares for 2.24 billion US dollars. All assets of the corporation were valued at about $ 21 billion. It can be noted that Vnesheconombank, as well as the Libyan Investment Authority fund, which represented Libya, became the main investors in the business. These corporations acquired, respectively, 3.15% and 1.43% of the securities of the Russian aluminum giant. After the IPO, the shares of the key shareholders of the enterprise changed slightly - they decreased in accordance with the size of the package of assets sold to investors.
Now Oleg Deripaska's holding owns 48.13% of the shares of Russian Aluminum, Sual Partners owns 15.8% of the corporation's assets. ONEXIM Group owns 17.02% of the shares of Russian Aluminum. Glencore Corporation owns 8.75% of the assets of the Russian aluminum company. In the free trade mode, 10.04% of the company's shares are traded. It may be noted that 0.26% of Russian Aluminum securities are held by the management of the company. At the same time, the CEO of the corporation owns 0.23% of the shares of the enterprise.
Company management
Since the founding of the company, Viktor Vekselberg has been the Chairman of the Board of Directors of RUSAL OJSC. In 2012, he announced his resignation. In October 2012, the Board of Directors of the corporation was headed by Matthias Warnig. The president of the company is Oleg Deripaska. The position of Director General of Russian Aluminum is held by Vladislav Soloviev.
The main activities of the corporation
We’ll study in more detail what RUSAL does.
The main activity of the corporation, as we noted above, is the production of alumina and aluminum. Among the schemes used to organize the production of the corporation are tolling, in which raw materials are imported from abroad, processed at Russian Aluminum plants, and the finished product is then transported abroad.
RUSAL is quite actively interacting with other major corporations. For example, together with RAO UES of Russia, it implemented a project for the construction of the Boguchanskaya HPP, as well as an aluminum plant with a capacity of about 600 thousand tons in the Krasnoyarsk Territory. The corporation initiated the construction of many large enterprises in the industry. Consider which of them are today key in the company.
RUSAL company activities: factories
The plants of the enterprise can be classified into the following main categories:
- enterprises producing aluminum;
- alumina production plants;
- enterprises engaged in the extraction of bauxite;
- factories producing foil.
Moreover, in each of the noted categories of plants there are both Russian and foreign firms.
Aluminum plants
The first aluminum plant in the USSR, as we noted above - Volkhovsky, was founded in 1932 and is still operating. Its capacity is not the largest, according to some reports - about 24 thousand tons, but nevertheless this enterprise is a significant infrastructure object of the company.
After Volkhovsky, in 1939 the Ural Aluminum Plant in Kamensk-Uralsky was launched. It also functions until now, but now it is mainly engaged in the production of alumina.
The enterprises built during World War II are the Novokuznetsk and Bogoslovsky aluminum plants, opened, respectively, in 1943 and 1944. They are also successfully working so far. The theological aluminum smelter mainly produces alumina and also has a foundry in its composition. The company produces protectors made of aluminum, as well as its various alloys. The plant's capacity is about 960 thousand tons of alumina per year. Novokuznetsk plant continues to specialize in the production of aluminum.
The most powerful RUSAL enterprise in the first category is the Krasnoyarsk Aluminum Plant. It has a capacity of about 1,008 thousand tons. The Krasnoyarsk Aluminum Plant was founded in 1964 in Krasnoyarsk and is one of the key industrial centers of the corresponding segment of Russian industry. RUSAL's second largest aluminum plant is located in Bratsk. It was founded in 1966. Its capacity is about 1006 thousand tons. The third most powerful RUSAL plant in the corresponding category is the Irkutsk Aluminum Plant. It was founded in 1962. Irkutsk aluminum plant has a capacity of about 529 thousand tons. This plant is located in Shelekhov.
Among the RUSAL enterprises that are supposed to be diversified are the Volgograd Aluminum Plant. On it, in particular, it is planned to expand the production of calcined anodes. Volgograd aluminum smelter has the necessary infrastructure for the production of rolled products. Its foundry capacity is about 60 thousand tons per year.
RUSAL has aluminum smelters abroad in the Swedish city of Sundsvall, as well as in Nigerian Ikot Abasi.
Alumina factories
If we talk about RUSAL alumina refineries, in Russia the largest enterprises of the corresponding type are, as we noted above, the Bogoslovsky, Uralsky aluminum smelters, as well as plants in Achinsk and Boksitogorsk.
RUSAL's alumina production facilities are located abroad in Ukrainian Nikolaev, Guinean Frie, Australian Gladstone, Irish Oginis, Italian Portesme, as well as the Jamaican cities of Kirkvayn and Mandeville.
Bauxite mining enterprises
The largest Russian bauxite mining enterprises owned by RUSAL are located in the Ukhta region, in Severouralsk, Belogorsk. Abroad - in Guyanese Georgetown, in Fria, as well as another Guinean city - Kindia.
Foil Plants
The foil is produced by Russian enterprises of RUSAL, which are located in Sayanogorsk, Dmitrov and Mikhailovsk. There is a large foil plant - the second most powerful of all that belongs to Russian Aluminum in the capital of Armenia, Yerevan.
It can be noted that the corporation's assets include enterprises that produce not only aluminum, but also, in particular, alloys from it, and foil. The corporation owns factories that form a complete production chain - from mining plants to rolling mills. This feature of the organization of production allows the company to achieve the highest quality products. Russian aluminum is appreciated in the world for its high quality.
The corporation’s key production facilities are located in Siberia, which, on the one hand, enables the company to access the region’s natural resources, and on the other hand, brings its infrastructure closer to one of the largest aluminum consumers, China.
Business development prospects
Let us examine what are the prospects for the development of the business that the Russian aluminum company is building. According to experts, RUSAL is trying to optimize its production taking into account the changing demand in the world market. So, the emphasis is supposed to be on the production of products with high added value. RUSAL is constructing highly efficient production facilities in Eastern Siberia that will enable the company to supply metal to customers when demand for it increases.
RUSAL owns huge reserves of raw materials, has its own infrastructure for the implementation of scientific and technological developments that can help optimize output and reduce its cost. Another important objective of RUSAL is to form an energy base that will allow to increase the level of production autonomy by generating its own electricity. In this direction, the corporation cooperates with RusHydro within the framework of the Boguchanskaya HPP construction project.
RUSAL is also actively developing international relations, both in the near and far abroad. Russian Aluminum is an active participant in the development of the Russian market in the corresponding segment.
The company initiated the formation of the Aluminum Association, which, experts say, plays a significant role in overcoming the economic downturn at the current stage of development of the Russian national economy. The capabilities of the corporation are of great importance in terms of restoring the performance of the corresponding segment of the Russian economy and its successful development.