Rusal to Spend $70m to Modernise Aluminium Foil Plant in Armenia

Azom.com
Oct 11 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 to 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.