MOSCOW, 08 October’2004 - RUSAL, one of the world’s leading aluminium producers, today announced an agreement with German firm Achenbach to execute a $70 mln modernization program at the RUSAL ARMENAL foil mill in Armenia. More sizable than initially planned, the program will allow RUSAL ARMENAL to improve the quality of its foil products and raise the plant’s profitability.

The modernization program, which will provide a major upgrade to foil rolling equipment and the establishment of a full production cycle, will result in an increase of the plant's capacity by 25,000 tonnes of foil per year, including 18,000 tonnes of highly profitable thin foil of 6-9 micron. Following the completion of the modernization project, RUSAL ARMENAL's share of thin foil production will rise to 2.5% by 2008.

Previously RUSAL had considered a smaller modernization program, including an upgrade to foil rolling facilities, at a cost of $34 mln. After Achenbach completed a detailed feasibility study, RUSAL decided to undertake a more sizeable $70 mln modernization program, which had initially been considered as another possibility, but not a basic variant on the proposed program. The new program, in addition to full-scale modernization of rolling equipment, includes the installation of new casting machines and an upgrade to the cold rolling mill to create a full production cycle.

As part of the modernization program the leading foil rolling equipment will be furnished with control systems and automatic management systems. High and low-pressure hydraulics systems will also receive upgrades.

The realization of the program will enhance the quality and profitability of RUSAL ARMENAL's products and will allow for the manufacturing of new types of products, as well as securing a non-stop supply of raw materials by switching from coil to foil ingots and the recycling of foil scrap.

Of the $70 mln required to finance the project, $25 mln will represent RUSAL's own investments and another $45 mln, in the form of a long-term export loan, will be provided by a group of German banks, headed by Bayerische Landesbank.

Installation of new equipment will commence in late October 2004 and will continue, according to the contract signed with Achenbach, for 18 months. It is expected that the first 150 tonnes of foil will be manufactured by the end of 2005. RUSAL ARMENAL will employ 1,000 people.

For Russian Press

Vera Kurochkina
Elena Shanina
Press-center@rusal.ru

For International Press

Zhenia Harrison
zharrison@rusal.ru