Alcoa Inc. on Tuesday said it had secured a $US75 million, five-year loan from the European Bank for Reconstruction and Development to fund the modernisation of its two recently acquired Russian plants.
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According to the Associated Press, the company, one of the world’s largest aluminium producers, bought the Samara and Belaya Kalitva facilities from Rusal, the country’s main aluminium maker, in a $257 million cash deal at the start of the year. At the time Alcoa said it planned to spend $80 million by the end of 2005 on refurbishing the plants.
Alcoa reportedly hopes the spending on maintenance and equipment upgrades will win it orders in a market where annual per capita aluminium consumption is just 8.8 pounds compared to 44 pounds in the U.S. and EU, according to Andrei Bader, Alcoa’s corporate affairs director for Russia.
AP said industry estimates put Russia’s equivalent Cold War figure at 26 pounds to 31 pounds per capita, thanks to the Soviet Union’s mighty military and space industries.
Bader reportedly said Alcoa plans to target foreign arrivals in the Russian automotive sector as well as local carmakers, who are gradually shifting to using more aluminium in their cars.
The Associated Press noted that Toyota broke ground on a $140 million plant near St. Petersburg in June, while Renault opened a $250 million assembly plant for the Logan in Moscow earlier this year. Volkswagen AG and DaimlerChrysler AG are rumoured to be mulling entry.
The European Bank for Reconstruction and Development is providing $50 million of the loan directly, while HSBC PLC will lend $25 million, AP added.
