Russian Aluminium Announces Cost Cutting Measures
biz.yahoo.com
Wednesday October 17, 1:01 pm Eastern Time
MOSCOW, Oct. 17 /PRNewswire/ -- The current downturn in world markets has had an expected knock-on impact on demand and prices for primary aluminium and aluminium products. Demand in the international export market has fallen, pushing prices during the current quarter below $1,300 per metric ton, compared with a high of over $1,600 earlier in the year. Faced with these tightening market conditions, Russian Aluminium announces that it is taking a series of measures designed to reduce costs and increase efficiency.
Among the measures are an average 7% staff reduction within the company's existing 73,500, including a 25% reduction at head office, and selective redundancies at a number of RusAl facilities. There will also be adjustments to salaries and bonuses. The bonus system will be made more flexible and will be calculated against both production results and market prices, which may mean upward revisions in the event of future price improvements.
A reassessment of RusAl's investment programme is currently under way with a view to a postponement of non-essential projects. The company is financially very strong and well positioned to weather any downturn in the markets as it has one of the lowest production costs in the industry. However, the company needs to realign its cost structure now to maintain this competitive advantage.
Alexandre Boulygine, Chief Executive of Russian Aluminium Management, said: ``It is always unfortunate to have to make redundancies, but I am confident that the measures we are taking today are in the best interests of RusAl's business and its employees. In light of the weakening aluminium market and our ongoing drive to make RusAl more efficient we have to take these tough decisions now to allow us to be well positioned for the expected market rebound. This is a challenging market environment but we remain extremely encouraged by the strength of our business and the efficient low cost, high quality production capacity which we have.''
Russian Aluminium, a privately owned unlisted company, is the world's second largest producer of primary aluminium and alloys, and Russia's largest. |
