United Co. RUSAL Plc history, profile and history video

 United Co. RUSAL Plc engages in the production of aluminium, alloys and value-added products with a particular focus on the production and sale of primary aluminium. The group operates through the following segments: Aluminium, Alumina, Energy, Mining and Metals. The Aluminium segment is involved in the production and sale of primary aluminium and related products. The Alumina segment is engaged in the mining and refining of bauxite into alumina and the sale of alumina. It supplies alumina to the Aluminium segment for further refining and smelting with limited sales of alumina outside the group. The Energy segment includes the group’s companies and projects engaged in the mining and sale of coal and the generation and transmission of electricity produced from various sources. The Mining and Metals segment operates through the equity investment in Norilsk Nickel. Integration between the Aluminium, Alumina and Energy segments also includes shared servicing and distribution. Other operations include manufacturing of semi-finished products from primary Aluminum segment for the transportation, packaging, building and construction, consumer goods and technology industries; and the activities of the company’s administrative centres. United Co. RUSAL was founded on June 26, 1996 and is headquartered in Moscow, Russia.

“UC Rusal History

In  the  early  90s  the  Russian  aluminium  industry  was  in  a  tight  spot.  Hyperinflation  along  with the  elimination  of  the  budget  financing  halted  the  smelters’  operations,  while  the  collapse  of  the Soviet was  forced  to  cut  aluminium  consumption  by  almost  nine  times.  The  only  way  for  the  Russian aluminium industry to tackle the crisis was to shift its focus towards the export markets. 

British  Trans  World  Group,  which  in  the  first  half  of  the  90s  gained  control  over  the  major  part  of  the  aluminium  operations  in  Russia,  successfully  campaigned  to  introduce  an  infamous  tolling  system  in  the  country.  The  scheme  involved  a  tax-free  regime  for  both  raw  materials  import  and  aluminium  export.  The  arrangement  fuelled  the  owners’  profits,  yet  limited  the  operations  expansion. 

1993 was marked with the start of the Russian aluminium industry privatization. At the same time the  industry  became  a  target  for  organized  crime  groups,  which  were  attracted  by  the  lucrative  profits,  driven  by  the  tolling  system.  At  first,  the  criminals  established  control  over  the  seaports,  forcing  companies  to  pay  «duties»  for  export  deliveries.  Apparently,  this  wasn’t  enough  as  the  criminals also began stealing aluminium from the smelters. 

It  wasn’t  too  long  before  the  crime  groups took  an  interest  in  the  plants’  shareholder capital.  In their  efforts  to  grasp  control over  the  industry,  the  criminals  were blackmailing,  intimidating  and murdering those who were unwilling to cooperate with them. 

Yet,  in  spite  of  the  chaos  that  dominated  the  country  at  the  time,  in  the  mid-1990s  the  industry  started  to  emerge  back  to  life.  Oleg  Deripaska,  then  the  owner  of  the  Sayanogorsk  aluminium  smelter, soon Aluminium  group,  owned  by  Mr  Deripaska,  grew  into  a  large  vertically  integrated  company  with  substantial production capacity and its own sales network. 

In the late 90s the crime boom in Russia started to fade away due to the strong concentrated efforts of  the  Russian  government.  In  2000  the  tolling  system  was  revoked  and  replaced  by  the  export duties civilized path and its disparate  assets started to get consolidated.”

*Information from Forbes.com and Rusal.ru

**Video published on YouTube by “RUSAL