The industrial enterprises at the Kola Peninsula are not known for their efficiency, nor for their tidiness and environmental standards. However, the Rusal smelter in Kandalaksha might be an exception. The more than 60 year old industrial plant located in the southern part of the Murmansk Oblast shines bright in the Arctic landscape. The plant buildings look nicely renovated and the lawn separating the production facilities is as well kept as in the finest city park.
“We take prestige in our tidiness”, a press spokesman for the company says to BarentsObserver during a visit this September. “Colleagues from other Rusal units are envious at us, and even think that we exaggerate”, he adds.
Still, behind the good-looking facade lures a difficult economic reality for the industrial plant. Since the financial crisis in 2008 shook up Russian economy, production has dropped sharply and job cuts have been massive. While the plant before 2008 employed 1500 it today has a staff of about 900. Production has dropped from 76,000 tons to 70,000 tons, most of which is exported and shipped out from the Murmansk Sea Port.
The future for the aluminum industry is uncertain, the company admits. Following a major company restructuring plan, the Kandalaksha plant will be the only Rusal unit left in Northwest Russia. As previously reported, the Nadvoitsky plant in neighboring Karelia is about to be closed leaving several hundred people without jobs. Several more plants all over the country are are on the verge of closure.
Financial results from Rusal illustrate the situation. In the first nine months of 2013, the company had a year-on-year net deficit of $611 million. Production in the same period fell 5,8 percent to a total of 2953 tons, Biztass.ru reports.
For the Kandalaksha plant the situation is however not all bleak. As a matter of fact, the company is optimistic about the future. “We have a new project”, the representative of the company says to BarentsObserver. The company is now investing in new technology enabling the plant to transform into a major producer or electrical wire rods. German and Italian equipment is being installed and the company will soon be able to offer the Russian market top-quality wires of nine different sizes. By 2015, the whole plant output will be transformed to the new production, which ultimately will reach 50,400 tons per year.
“With this new production, we will make profits”, the press spokesman says confidently.
Rusal is the world’s biggest producer of aluminum. The company accounts for about nine percent of the global primary aluminium output. It has company units in 19 countries and employs about 72,000 people. The company is based on a merger of SUAL, the former owner of the Kandalaksha plant, and the alumina assets of Glencore in 2007.
