Rusal · RUS:RUAL
Rusal — UC Rusal — Peter Finnimore Press Conference (October 2007)
26 slides from Rusal's conference presentation, October 2007
Slide 1: Chinese and Russian Aluminium Industries: Partnering for the Future
CHINESE AND RUSSIAN ALUMINIUM INDUSTRIES: PARTNERING FOR THE FUTURE Peter Finnimore, Aluminium Sales Director, UC RUSAL
Slide 2: Global Industry Growth
GLOBAL INDUSTRY GROWTH Strong fundamental demand… … and limited new supply • Accelerating global growth driven by • Rising capital and operating costs are developing countries resulting in significant smelter capacity - China is the primary contributor, closures, particularly in North with the other
Slide 3: Increased Competitiveness of Aluminium
INCREASED COMPETITIVENESS OF ALUMINIUNM • Competitive price compared to copper, Relative performance for copper, zinc, steel and aluminium zinc and steel (rebased to 100 as of January 2000) • Aluminium has become an increasingly 450 attractive substitute of zinc and steel, 400 319% enhanced by its v
Slide 4: Macro Trends Supporting Demand for Aluminium
MACRO TRENDS SUPPORTING DEMAND FOR ALUMINIUM • Global aluminium consumption is forecast to Global aluminium consumption growth 1980-2030 (MMt) grow at 3.6% CAGR 79,6 CAGR ~3.6% • Demand in developing markets is expected to 62,3 be markedly higher, as indicated by the 45,5 correlation between consump
Slide 5: China Continues to Be Key Consumer
CHINA CONTINUES TO BE KEY CONSUMER Growing share of urban population in China contributes to increasing demand China’s aluminium demand pattern vs. other Asian for aluminium used in consumer goods, countries (Kg per Capita) packaging, automobiles and other applications 15 China as of 2006 – further
Slide 6: Overview of Chinese Aluminium Industry
OVERVIEW OF CHINESE ALUMINIUM INDUSTRY In 2006 China produced 9,3 million tons of primary aluminium. In 2007 forecast is 12 million tons, about 1/3 of the world total. In 2001 output was 3,4 million tons China’s production of alumina is expected to reach 20 million tons in 2007 compared with 13,
Slide 7: Major Challenges for Chinese Aluminium Industry
MAJOR CHALLENGES FOR CHINESE ALUMINIUM INDUSTRY CRU forecasts that by 2010 China will produce 13,7 million tons of aluminium and in 2011 14,7 million tons of aluminium. Primary aluminium continues to increase but growth rate has dropped and investments in the industry have decreased According to
Slide 8: Demand Situation in China
DEMAND SITUATION IN CHINA China’s GDP grew by 10,7% in 2006. Chinese primary consumption is also accelerating. Starting from 2003 the growth rate of semis production was above the growth in primary production. In 2006 it was 39,3% versus 24,0% Electric power industry made strong contribution to
Slide 9: Possible Trends
POSSIBLE TRENDS China has become the largest primary producer and consumer in the world. The average aluminium consumption per capita is above 5 kg which is higher than the world average of 4,8 kg, but below the average of 20 kg and over in the developed countries China is moving towards product
Slide 10: UC RUSAL Today
UC RUSAL TODAY The world’s largest aluminium and alumina Leader in aluminium production producer • About 4 million tonnes of aluminium per year • About 11 million tonnes of alumina per year • Operations in 19 countries across 5 continents • Own R&D and engineering capabilities, including RA-300 and
Slide 11: Truly Global Presence
TRULY GLOBAL PRESENCE UС RUSAL operates in 19 countries across 5 continents
Slide 12: Sales Geography
SALES GEOGRAPHY United Company RUSAL’s products are sold to customers in 70 countries
Slide 13: Value for Customers
VALUE FOR CUSTOMERS Our customers are looking for value, quality and responsiveness. The combined company enables us to offer: Manufacturing expertise, research and resources Ability to provide longer-term partnerships Value-added focus Global presence enabling us to become closer to our end
Slide 14: Platform for Further Growth
PLATFORM FOR FURTHER GROWTH • Vertical integration along the bauxite / alumina / aluminium value chain • Financial scale and flexibility • Ability to do business in challenging geographies • Competitive cost position, driven by own resource base and access to the low cost energy • Well-positioned to
Slide 15: New Cell Technology
NEW CELL TECHNOLOGY UC RUSAL has developed technology that ranks among the best in the world • RA-300 reduction cell – a global top-three reduction technology with daily capacity of 2 tonnes of aluminium; • RA-400 reduction cell – the most powerful in Russia, launched at Sayanogorsk Smelter in Dec 2
Slide 16: Benefiting from a Position on One of the World's Power Islands
BENEFITING FROM A POSITION ON ONE OF THE WORLD’S «POWER ISLANDS» Attractive Locations for Power-Intensive Industries Today • Since aluminium is the “solidified form of power”, Russia represents one of the most attractive locations for the aluminium industry long-term • Major factor in global industr
Slide 17: Growth Opportunities: Aluminium
GROWTH OPPORTUNITIES: ALUMINIUM BROWNFIELD GREENFIELD + 65% IN ALUMINIUM OUTPUT
Slide 18: Growth Opportunities: Alumina / Bauxites
GROWTH OPPORTUNITIES: ALUMINA / BAUXITES BROWNFIELD GREENFIELD + 66% IN ALUMINA OUTPUT
Slide 19: Example 1: Komi Aluminium Bauxite and Alumina Complex
EXAMPLE 1:KOMI ALUMINIUM BAUXITE AND ALUMINA COMPLEX • Phase I: Expansion of bauxite production at existing Timan Bauxite mine up to 6 mln tonnes per annum by 2009; • Phase II: Construction of refining capacity of 1.4 mln tonnes per annum, when fully operational in 2009; • Site connected to the fede
Slide 20: Example 2: Khakas Aluminium Smelter
EXAMPLE 2: KHAKAS ALUMINIUM SMELTER • The first smelter to have been built in Russia in 20 years: launched in Dec 2006 • Sayanogorsk smelter site, 100% UC RUSAL • Sayano-Shushenskaya Hydropower: 6,700 megawatts with spare capacity • Full smelting capacity of 300,000 tpa by end of 2007 • UC RUSAL RA-
Slide 21: Example 3: Boguchanskoye Energy and Metals Complex
EXAMPLE 3:BOGUCHANSKOYE ENERGY AND METALS COMPLEX • Krasnoyarsk Region • 50/50 JV with RAO UES sub’s HydroOGK • Budget of USD 3.6 bln • Hydropower: 3,000 MW • 1st phase to be complete in 2009 • 2nd phase to be complete in 2012 • Smelting capacity: 600,000 tonnes per year – 300,000 tonnes in 1st phas
Slide 22: The Future
THE FUTURE ni RUSAL OUR VISION GROWTH PLATFORM NEXT STEPS Building upon the position of a global leader in one commodity to become a leader in metals and mining industry world- wide Core competencies in aluminium and energy Size, scale, leading tech- nology, financial strengths and substantial syner
Slide 23: UC RUSAL's Current Position in China
UC RUSAL’S CURRENT POSITION IN CHINA • Linshi cathode plant in Shanxi province with annual capacity 15 000 tonnes. Rusal plans to increase capacity up to 25 000 Rep.office tonnes Linshi cathode plant • Representative office in Beijing Rep.office • Representative office in Shanghai
Slide 24: UC RUSAL Is Perfectly Positioned to Supply China
UC RUSAL IS PERFECTLY POSITIONED TO SUPPLY CHINA Major smelters of UC Rusal and new projects are located in Southern and Eastern Siberia which allows them to reach China through Russian Far East ports and cross-boarder stations
Slide 25: Price Difference Barriers
PRICE DIFFERENCE BARRIERS One of the main barriers for UC RUSAL in Chinese market is the price difference at LME vs SHME. 3000 2800 2600 USD/MT 2400 2200 2000 Jan 06 Mar 06 May 06 July 06 Sept 06 Nov 06 Jan 07 Mar 07 May 07 date SHME Al HG (USD/MT) LME Al HG (USD/MT)
Slide 26: Possible Implications
POSSIBLE IMPLICATIONS UC RUSAL can offer wide range of products, including primary aluminium, slabs for rolling, extrusion billets, wire rod , primary foundry alloys which can add to the domestic supply from Chinese smelters to local fabricating plants UC RUSAL offers high quality aluminium prod
UC Rusal — Peter Finnimore Press Conference (October 2007) on 6ix