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Vice President Of Russian Aluminum Interview: China Is Our Important Partner
Sep 26, 2017

Vice president of Russian Aluminum interview: China is our important partner

In the first half of 2017, the global economic growth, business activities increased, consumer spending, durable goods and fixed asset investment growth, aluminum demand upward. As a result, our outlook for the rest of 2017 remains positive and global demand for aluminium will continue to be steady at the end of the year, up 5.9% to 63 million 300 thousand tonnes throughout the year. Market power will come from outside China, 4.3% growth to 29 million 500 thousand tons, and China's growth of 7.4% to 33 million 800 thousand tons.

Rusal has established long-term partnership with chinalco. We have signed memorandums of understanding and continue to study cooperation opportunities, of which the most recent are alumina projects and alloy engineering in china.

NORINCO, a subsidiary of Rusal, has a long history of selling aluminium, alloy and other non-ferrous metals in china.

In 2016, Rusal and Hebei Xinyi Cable Co., Ltd. set up a joint venture with a half stake in the company. The project is progressing well. Rusal has supplied the first aluminium zirconium rod to Hebei pilot cable for trial production, testing and certification. In the first phase, the joint venture will begin producing aluminium zirconium heat resistant wires, and our long-term goal is to take advantage of innovative cables made from aluminium alloys in the Chinese market and then move into the Southeast Asian market.

Our partners with China continue to deepen and develop our cooperation in all fields. We support China important policy measures introduced by the government, such as "The Belt and Road" project. We believe that the "The Belt and Road" initiative to establish new economic ties between Europe and Asia, a major contribution to regional economic development, it is worth mentioning that Rusal has been for "The Belt and Road initiative project.

In general, Rusal and China Metallurgical Industry through various professional groups, such as China Nonferrous Metals Industry Association and China Nonferrous Metals Processing Industry Association cooperation.

Looking ahead, we note that Asian investors, including China, are interested in the Technology Valley Project in the Russian Krasnoyarsk region. The surrounding aluminum smelting facilities set up high-tech group is sponsored by the Russian aluminum, and the Russian government support, we believe that part of it can be regarded as "The Belt and Road" initiative.

Muhammad Shen: Chinese is the most close to Russia's neighbors in all aspects, it is our important partner.

Over the past two years, Asia Pacific Investment in the Far East, 80% from Chinese enterprises. In all respects, more than 20 projects with a total investment of over US $3 billion in China's funds in the Far East have been in full swing. In addition, Chinese enterprises have announced plans to build large pulp mills and new seaports in the Far East and are actively building cross-border transport facilities.

The new mechanism implemented by the government aims to promote mutual trade and investment, and to set up a special Far East Centre in support of Chinese investors.

We see some potential areas of cooperation, including aluminum production as the first. We are fully committed to supporting China's regulatory authorities to implement measures to strengthen environmental pollution control and illegal capacity production in aluminum.

As an energy intensive industry, aluminum sees renewable energy as a decisive factor in determining aluminum production efficiency and environmental protection. In view of this, we expect the Sino Russian enterprises will have a lot of opportunities for cooperation in the framework of the three science and Technology Valley, the location of the three Technology Valley will be close to Krasnoyarsk, Volgograd and Khakassia in aluminum smelter and hydroelectric power plant. The Technology Valley concept is to build efficient facilities for the aerospace industry, the automotive industry, the engineering sector, the energy sector, the construction industry and other industries to produce high value-added aluminium products. The Technology Valley facility will have the opportunity to include new hydropower plants, primary aluminium smelting facilities, baking anodes and other raw materials, and all of which will only use clean energy.

Finance will be another area of cooperation. With China's growing influence in the global economic system, the role and use of the renminbi will continue to improve.

In recent ten years, the intensive growth of China's industrial facilities has led to the all-round development of industrial infrastructure, but at the same time, it has also created the problems of environmental pollution and overcapacity. The measures introduced by Chinese regulators have a positive effect on the balance of the aluminum market as well as profitability and efficiency of legitimate production facilities, and also have a positive ecological impact.

Nevertheless, in the ongoing supply side reform, the natural transformation of China's aluminum industry will drive its share in the downstream and secondary aluminum markets. Since the trend towards value-added products is one of the development strategies of Rusal, we believe that the downstream market is attractive and that there is a lot of room for cooperation with Chinese business partners. As pointed out above, we have common interests both in technical research, engineering development, or in the production of value-added products together.

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