UC Rusal intends to acquire NORINCO sales subsidiary's stake

Company teamed up with NORINCO for increasing volume of high-tech aluminium production sales in China.

The aluminium producer UC RUSAL Plc has signed the Letter of Intent with China North Industries Corporation (NORINCO). The document emphasises the intent of RUSAL to acquire a stake in a sales and marketing subsidiary of NORINCO, which operates on the People’s Republic of China primary aluminium market. It also specifies the intent of NORINCO to invest into the high-tech production capacities of RUSAL’s Siberian smelters, according to a UC RUSAL report.

NORINCO’s investments into the production of aluminium casting alloys are aimed at increasing the volume of high-tech aluminium production sales on the Chinese market. The realisation of mentioned investment plans will allow to expand Russian capacities to output the production with high added value and increase exports of Russian aluminium production to China and other Asian countries.

RUSAL has a well diversified sales platform covering the United States of America, Europe and Japan and also has a strategic focus on high-growth Asian markets, in particular China. The company expects to increase its sales in Asia by 50% (up to 30% of total sales) by the end of 2010. Acquiring a stake in the sales and marketing subsidiary of one of the largest state owned holdings in China will help to boost RUSAL presence on the world’s largest aluminium consumption market.

Under a long-term contract between RUSAL and NORINCO, RUSAL will deliver up to two million tonnes of aluminum alloys worth more than USD 4 billion a year to the Asian markets from the company’s Siberian smelters.

The signed letter of intent is a continuation and extension of the cooperation between RUSAL and NORINCO, launched in November 2009 with the signing of an agreement to supply 1.68 million tonnes of RUSAL’s aluminum to the Chinese company by 2016.