Yuri Adno

T

he idea to establish an industrial park came up as a result of Rusal’s plans to considerably increase its output of primary aluminum that would require expansion and modernization of production capacities. As Dmitri Rit said, “under this program our enterprises need a lot of equipment and, above all, the imported one”. He mentioned three factors that influenced the project: the company’s desire to reduce financial expenses on exporting equipment, the necessity to adapt a standard imported equipment to Rusal’s technology of aluminum production and the availability of a large space that became free after restructuring auxiliary production facilities.
Dmitri Rit explained that these facilities were not directly connected to Rusal’s business and they included, for example, repair shops and even construction organizations integrated in the aluminum plants. In Dmitri Rit’s words, a number of personnel at these auxiliary units was constantly increasing and by the end of the 1990s it equaled the number of personnel employed in the main production. That is why the decision was made to restructure and move auxiliary units to the single Service Center, the subsidiary of Rusal. "As a result, we at last could determine the actual cost of repair work, to compare efficiency of equipment servicing at the company’s different plants and make all enterprises of the company share positive experience". Now, by offering to lease free space Rusal is raising the efficiency of using its assets.
The Siberia Industrial Park project provides for arranging technological equipment-making for Rusal’s enterprises. The project’s director said that the main production facilities would be concentrated in the city of Krasnoyarsk and they would have units at all large aluminum plants of the company.
Rusal is inviting foreign machine-building companies to participate in the project. Dmitri Rit assured that "there will be all necessary conditions available for developing production and servicing technological equipment". Citing Rusal’s preliminary assessments he said that equipment makers could cut down its prime cost by at least 20% to 30%". Rit explained reduction of costs by pointing out that, first, participating companies would not have to pay customs fees and, second, production is much cheaper in Russia than in the West because of lower prices for material resources, components, electric power, gas and also because of a lower cost of labor. In the opinion of Dmitri Rit, although Russian materials and components are cheaper, than the imported ones, they are in no way inferior to them by quality and equipment made in Siberia will fully correspond to Western standards.
At present, many Western machine-building specialists are seeking to enter the Russian market but only such majors as Siemens, Danieli, VAL succeed. Facing problems of legal and tax regulations other companies have to hire intermediaries, incur considerable costs and lose time. Rusal offers its help to get through these procedures and promises to take all insurance risks upon itself. As Dmitry Rit put it, his company would ensure the whole range of services, such as licensing, certification, hiring of labor force, dealing with controlling authorities, interaction with regional authorities. He did not rule out the possibility that local administrations being interested in creating jobs would provide the project’s participants with tax privileges.
In its turn, Rusal will provide partners with ready-for-use production sites having all necessary infrastructure: electric power supplies, transportation, etc. "All that they will have to do is to bring in their equipment, if necessary, to train personnel and start operations", stressed Rit.
In responding to the question, if firms, which joined the Siberia Industrial Park project, could cooperate with other companies besides Rusal, Dmitri Rit said: " Of course, these firms can cooperate with any companies and plants and the more active they will be doing it, the better they will prove the success of our project. Conducting business is an exclusive prerogative of a participating company and we do not control it".
In his words, so far expenses on the project are mainly linked to preparing sites for leasing. It is planned that in future Rusal’s own funds will be used as a main source of investments.
Dmitri Rit provided the following information on the project’s progress: The Siberia Industrial Park project was registered, its concept was developed and its executive body was formed, active negotiations were underway with potential partners. In Rit’s words, "there are quite a lot of them already". Recently, Rusal signed a contract with the first participant of the project, the Dutch company Hencon, one of the world’s leaders in making and servicing equipment for aluminum industry. Hencon already registered its subsidiary Hencon-Siberia in Krasnoyarsk and under the Siberia Industrial Park project it would be making equipment for modernizing the Krasnoyarsk Aluminum Plant.