Moscow, December 11, 2003 - RUSAL, a world leader in aluminium production, announced today that it has appointed German firm Achenbach GmbH as contractor to implement its modernization program for foil rolling production at the RUSAL ARMENAL foil mill. The $34-million modernization project aims to change its production mix in favor of higher value-added products.

Achenbach, one of the leading builders of rolling mills, won the project over two other companies and is about to start the feasibility study at ARMENAL, before beginning modernization activities. According to preliminary estimates, the program’s completion will take up to nine months. The modernization project will incorporate the installation of direct rolling mills as well as the complete modernization of ARMENAL’s hot rolling mills. The leading foil rolling equipment, control systems and automatic management systems will be utilized throughout the modernization process. Outmoded high and low pressure hydraulic systems will also be replaced by more advanced versions. A modernized lubricant vapors accumulation system and a new fire-fighting system are also likely at the plant. 

Upon the program’s completion, ARMENAL will produce 25,000 tons of foil annually; including 18,000 tons of 6-8 micrometer foil by 2005. These foil products will help raise production cost efficiency by 150%. 

In July 2003, after obtaining the results from a financial audit, RUSAL made the decision to modernize ARMENAL. The audit determined that the plant had low profitability because the household foil being produced by ARMENAL had a very high cost.

The company launched a tender among major international engineering companies in August. In the meantime, as a consequence of operating losses and mounting inventories, RUSAL took the decision to suspend production at the mill.  Most employees will be laid off from Jan. 1 with two months pay, in accordance with local labour law. RUSAL has indicated its intention to re-hire most personnel once the modernization program is completed.

Commenting on the program, Alexander Burdin, Deputy General Director of RUSAL’s packaging business, said he is pleased to announce that, “Modernization will help ARMENAL achieve profitability and become one of the world’s leading foil producers. Although, to our regret, the production upgrading process was accompanied by the suspension in production and temporary staff layoffs, we will make it an absolute priority to complete the project in the quickest and the most efficient way possible.”     

About RUSAL

RUSAL, a world leader in aluminium production was formed in March 2000 from the merger of a number of the largest smelters and other aluminium producers located in the CIS. The company accounts for 75% of Russia's primary aluminium output and 10% of the global primary aluminium output. RUSAL is a fully vertically integrated company with a complete production cycle from bauxite mining and the production of raw materials, to the production of primary metal, semi-products and aluminium-based end products. RUSAL is headquartered in Moscow.

About ARMENAL

The RUSAL ARMENAL Foil Mill, located in Yerevan, Armenia, was established in 2000 when RUSAL and the Government of Armenia agreed to a joint venture in regards to the production facilities of the Kanaker Foil Mill. The Kanaker foil mill began operation in 1957 and by the 1980's the plant was one of the leading enterprises of foil rolling in the Soviet Union. In February 2003, RUSAL bought the remaining stake in the RUSAL ARMENAL Mill from the Armenian Government. ARMENAL's production and quality control systems are compliant with the ISO 9001:2000 international standard.

About Achenbach

Achenbach Buschh?tten GmbH is a German high-tech machine construction company, which is one of the leading builders of rolling mills for metals such as aluminium, copper, zinc and their alloys. Founded in 1452 as a forge, it became a foundry later before the rolling mill building started in 1888. Today, the company is the world’s leading specialist for light gauge strip and foil rolling mills. More than 250 Achenbach rolling mills in about 55 different countries of the world produce metal strip and foil of the highest quality. Achenbach’s quality management has recently been re-certified in accordance with DIN EN ISO 9001:2000.

For further information:

www.RUSAL.com
Eugenia Harrison,  +7 095 720 5170,  zharrison@RUSAL.ru