United Company Rusal Plc, a leading aluminum producer, is setting up more joint ventureswith its Chinese partners in Russia to make high value-added, greener aluminum products.
"Rusal has a clear advantage in aluminum technologies, and hydropower resources areabundant in Russia," Oleg Mukhamedshin, deputy chief executive officer of UC Rusal, saidduring the ongoing Annual Meeting of the New Champions 2015, or the Summer Davos, inDalian.
"Chinese companies' strong edge in engineering and design and in other areas will help usdevelop high-end aluminum alloys at lower costs and less emissions," he said.
The company, listed on the Hong Kong Stock Exchange in 2010, has been dedicated todeveloping key valueadded products, such as aluminum sheet and foundry aluminum alloy,for modernization projects that target automotive, construction and electricity sectors. It wasthe first Russian company to list on the Chinese bourse.
"Through cooperation, we can leverage on both countries' competitive advantages to reduceenergy costs, create better investment opportunities and develop quality projects in the globalmarkets," said Mukhamedshin.
In 2012, Rusal established a Shenzhenbased joint venture with China North IndustriesCorporation, for trading aluminum in the Chinese market.
A year later, the company said it was joining hands with the Aluminum Corporation of China,or Chalco, in areas such as research and development of new technologies in the aluminumindustry, development of bauxite resources and investments in integrated hydropoweredaluminum production.
The two global players have been cooperating on various projects in the aluminum industrysince then.
"Chalco and Rusal are both responsible and influential companies. Their cooperation is ofgreat significance in the context of the severe challenges faced by the global aluminumindustry," Xiong Weiping, former chairman of Chalco, said earlier.
The global aluminum sector has been weighed down by excess production capacity and weakdemand since 2008.
But things have started to pick up. In the first half of 2015, global aluminum demandincreased 6.3 percent from a year earlier to 28.6 million tons, driven mainly by growth in NorthAmerica and India.
The automobile industry, among others, is a key driver of aluminum demand by sector.According to a Rusal report, global aluminum consumption in transport will be growing at anannual rate of 5 percent to 7 percent till 2020.
That is sweet music for Rusal, which produces 7 percent of global aluminum.
The company's 2015 first-half financial reports show revenue grew 8.3 percent year-on-yearto $4.75 billion. Net profit during the period surged to $830 million, compared with $40 millionrecurring net loss in the same period of 2014.
"We have taken adequate steps to reduce production costs, generate sufficient profits andboost performance. All of these should allow Rusal to make dividend payouts. It's veryimportant for the company and for the market."
"With opportunities ahead from infrastructure and transport projects such as high-speed trainsunder the Belt and Road Initiative, we are quite optimistic on long-term prospects," he said.