Russian metals to move into Cuba and Vietnam

Metals tycoon Oleg Deripaska’s holding company, Basic Element, or BasEl, plans to extend its global reach with new factories in Cuba, Vietnam, Ukraine, Belarus and maybe India.
Russian Buses, a division of BasEl’s automotive division, RusPromAvto, said Monday January 31 it would build factories to assemble buses in Vietnam and Cuba this year, as well as in Ukraine and Belarus by the end of 2007.
Russian Buses CEO Sergei Zanozin told reporters he expects sales to increase about 10% this year toUS$440 million and hit the half billion mark in 2006, with about a third of that coming from exports, news agencies reported.
Russian Buses currently has four production facilities, all in Russia: two in the Moscow region, one outside Nizhny Novgorod, and one in the Urals region.
RusPromAvto, which also controls automaker GAZ, had sales of aroundUS$2 billion last year and produces 80% of all the buses made in Russia, according to the company’s web site.
BasEl’s largest asset, Russian Aluminum, or RusAl, is also looking at setting up a factory in India.
An Indian official said Monday that RusAl was putting the finishing touches on a plan to build a factory in the eastern Indian state of Orissa to produce alumina, which is used to make aluminum.
The Economic Times, an Indian newspaper, said RusAl would spendUS$1 billion on the plant. If true, it would be the largest Russian investment ever in the subcontinent.
“A Russian Aluminum official [spoke] to us on the telephone to express interest and said they would send a team to discuss details,” Padmanabh Behera, the steel minister of Orissa, told Bloomberg.
Both BasEl and RusAl declined to comment on the reports.
Alexander Pukhayev, an analyst at United Financial Group, a Moscow-based brokerage, said the average cost of building an alumina plant is betweenUS$400 million andUS$600 million. “If [RusAl investsUS$1 billion] it means the capacity of the plant will be very large.”
RusAl chief executive Alexander Bulygin said last week that the company plans to investUS$1.5 billion in 2005.

 

Category: Business