UC RUSAL Packaging Division Plans to Increase Its Production by 25%

This decision has been made after analyzing global packaging market trends. Current world market capacity (excluding China), according to RUSAL’s analysts, amounts to 800,000 tonnes per annum.

Jan 3 2012 --- UC RUSAL, the world’s largest aluminium producer, is pleased to announce its plans to increase the total production volume of its Packaging Division by 25% until 2014, from 80,000 to 100,000 tonnes per annum, amounting to 5.3% of the world’s total foil production (excluding China). The Division will also review its production portfolio, to focus on converter foil. Total investment in the project will amount to about USD17 million.

The production increase will be achieved by modernizing the three largest CIS foil and foil packaging plants: SAYANAL, Ural Foil and ARMENAL. Ural Foil’s production capacity will increase from 16,000 to 24,000 tonnes per annum, with investments amounting to USD7 million. ARMENAL’s production capacity will increase from 26,000 to 33,600 tonnes per annum, with investments amounting to USD6 million. SAYANAL’s production capacity will increase from 38,000 to 42,000 tonnes per annum, with investments amounting to USD4 million. The project’s payoff period is estimated to be between 3 to 4 years.

This decision has been made after analyzing global packaging market trends. Current world market capacity (excluding China), according to RUSAL’s analysts, amounts to 800,000 tonnes per annum. Approximately 60% is accounted for by converter foil, 15% by household foil, 14-15% by container foil (used for food packaging, cooking and in-flight catering) and 10% by technical foil.

Additional production volumes will be sold in Russia, Europe and USA in the converter foil segment. Converter foil combined with paper, film, lacquer or embossment, depending on its purpose, is widely used in packaging production for FMCG goods.

In addition to converter foil, RUSAL’s Packaging Division produces household foil for B2C markets. RUSAL’s ‘Sayana Foil’ brand holds the largest share at Russian foil market. RUSAL Sayana Foil plant produces household foil to be sold on domestic market under major retailers’ own brands such as Auchan, X5 Retail Group, Metro Cash&Carry. In Europe and USA, RUSAL’s household foil is also sold under retailers’ brands.

“The household and converter foil currently make up 70% and 30% of our production portfolio respectively. We want to raise converter foil share up to 50% by increasing its production as the margin on this product is twice as higher as household foil. Converter foil packaging materials is a very large market and is widely used in the world’s food, confectionery, pharmaceutical, tobacco and a number of other industries. Following completion of the production increase plan, we will consider installing new equipment in the Packaging Division’s plants for future development in this area,” said UC RUSAL’s Packaging Division Director, Sergey Goryachev.