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Volgograd Aluminium Plant reduced production capacity

25 June 2013

«Volgograd Aluminum Plant» (VgAZ) began to sharply reduce their productive capacity recently. Who stopped the work on one of his buildings, and as a result, the company production decreased almost 12%. The reason for this — according to representatives of organizations — served as a local rise in electricity prices.

Recall that, «Volgograd aluminum plant» refers to a group of «Rusal» (Aluminium Division «West») companies. According to the corporation management statements from the beginning of this year, the average cost of 1 kW / h for VgAZ was 1.77 rubles, and even at such prices more than 40% of the cost of manufactured goods accounted for the electricity. As he said in an interview with Leonid Ragozin (CEO VgAZ), measures to reduce electricity consumption in the enterprise recently been adopted, but the next increase in prices it is not possible to significantly change the situation. Therefore, in the «West» meeting of heads of a recent aluminum division it was decided to reduce production in the factory. «Aluminum market is not stable, the demand for it is low, product prices are falling, and the cost of electricity is constantly growing," — commented on what is happening company representatives. According to them, it is planned to cut the most inefficient power (total 300 thous. Tonnes by the end of the year). «Conservation is subject to some of the aluminum production, however, it will be put into operation again after the stabilization of the market» — promise to «Rusal». However, as assured the management of «Russian Aluminum», to carry out the reduction among the workers of the plant is not planned, but remained out of work employees will cover the internal vacancies VgAZ.

According to analysts, if the current market situation, the reduction of working capacity — Waste world practice, which in the future should stabilize the price of aluminum. However, this measure is not popular because business leaders run the risk of displeasing in society, and may lose a strategically important position in the market. Therefore — according to experts — the owners are reluctant to reduce production volumes, because of what the crisis in the industry is exacerbated.

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