United Company RusAl, whose majority shareholder is Russian billionaire Oleg Deripaska, has announced that it has entered into a joint venture with China North Industries Corporation （known as Norinco） to set up an alloy plant to access Asia’s biggest economy. The company will also acquire stake in a trading unit to leverage its market position.
RusAl, the world’s biggest Aluminum producer will produce and sell Aluminum Cans and Wheels and will own at least 51 percent in the joint venture.
Deripaska intends to increase its sales in Asia to 30 percent of total sales from 20 percent last year. The company will acquire 33 percent shares of a trading unit of China North, known as Shenzhen North Investment Corporation to distribute primary Aluminum in China and Southeast Asia.
Deripaska expanded his business in Asia, Particularly China to battle the recent global economic crisis and acquired Cement plants, Power plants and automobile manufacturing units. RusAl has already listed in Hong Kong this year and raised $2.24 billion. The Russian billionaire intends to list two more companies in Hong Kong.
“The Asian market is one of the company’s top priorities and is strategically important in terms of the promotional support behind our products”， Deripaska had said.
The proposed plant will come up in Siberia, close to the Chinese border and RusAl will provide metal and plant facilities while the Chinese counter part will supply equipment and working capital.
RusAl is primarily targeting to increase its exposure in the Chinese market and hopes to achieve around 50 percent of its Asian sales from China only, once it qualifies to sell in the Shanghai Metal Exchange by the end of this year.
RusAl hopes to increase alloy production to 1.5 million tons next year from the current 1.3 million tons and total Aluminum production target has been set at 4.1 million ton for next year. An agreement has already been reached with Norinco to supply 2 million metric tons of Aluminum at a cost of $4 billion.
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