“The population of Nadvoitsy can relax, the plant will continue to operate”, Governor of Karelia Aleksandr Khudilainen says in a press release issued after his meetings with the Russian Presidential administration and key industrial interests. According to the governor, a total of $150 million will be invested in the plant to secure favourable energy supplies and a shift in production. The plan, which reportedly has got the support from President Putin, includes the acquisition of the Ondskaya hydropower plant from Gazprom subsidiary TGK-1 and the modernization of production. Annual output will be kept at 35000 tons of aluminium and the work force will be expanded with up to 250 people.
As previously reported, the 800 workers at the plant have been facing an uncertain future as Rusal, the world’s leadning aluminium producer, earlier this year announced that it intended to reduce production with 275,000 tons. In addition to the Nadvoitsy plant, the company plans to close also the Volkhov plant in Leningrad Oblast. Rusal says that the Nadvoitsy plant alone annually loses about $10 million despite discounts in electricity supplies provided by TGK-1, the leading regional power producer owned by Gazprom.
Khudulainen has fought hard for the rescue of the plant, the cornerstone enterprise in a town of 8300 people, ever since Rusal announced its cut plans. The support from the Kremlin is therefore a major victory for the governor, whose region from before is experiencing serious economic hardship.
However, the message from the governor is disputed by Rusal, which argues that the work force at Nadvoitsy inevitably will be reduced and that key parts of the rescue plan remains to decided. The company also rejects the information about its alleged readiness to buy the Ondskaya station from TGK-1 and that it is only considering the establishment of a joint venture with Gazprom. In addition, Rusal argues that annual production will be reduced to 24000 tons, newspaper Kommersant reports.
