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En+ Group to redesign the rolling mill at KraMZ

March 20, 2013. Moscow. The Board of Directors of En+ Group has considered the proposal of the company’s management to change the design specifications of the rolling mill to be built at the Krasnoyarsk Metallurgical Plant (KraMZ) and has instructed that the updated project be submitted for approval before the end of the year.

The key features distinguishing the new project from the one designed earlier include lower capital intensity, a shorter payback period and the possibility of phased implementation.

According to the plans, at the first stage KraMZ is to start manufacturing plates for aircraft production and aerospace components; the planned output will total 60 thousand tons per year. To achieve this, the existing capacities of the plant will be upgraded; a hot rolling mill, milling and hardening equipment and other machinery will be put into operation. Subsequently, the possibility of increasing the capacity of the rolling mill to 250 thousand tons per year and launching the production of aluminum sheet, can sheet and other products will be considered depending on the market demand.

Preliminary estimates indicate that expenditure on the implementation of the first stage will total USD 150 mln (previously, the project cost was estimated at USD 500 mln). It is expected that the company will finance the project by raising funds from the shareholders of KraMZ (including the revenue from the sale of a 29% stake in LLC SibMetCom, which owns KraMZ, to OJSC Irkutskenergo), and by taking out loans. The first stage will be implemented within three years after the decision is made.

The project will enable to create over 150 new jobs; after it is launched, KraMZ will increase its power consumption by 50 MW. This power will be supplied by OJSC Irkutskenergo. The project will enable to create the first aluminum rolling mill in Siberia located in close proximity to both the largest aluminum producers and aircraft manufacturers. A reduction in transportation costs coupled with the use of liquid aluminum supplied by UC RUSAL’s Krasnoyarsk Aluminum Smelter as feedstock and electricity prices that are lower than in European Russia and the Ural Region, where other rolling mills are located, will make the products of KraMZ the most competitive in the market. The company has already conducted preliminary negotiations on supplying plates to the largest aircraft manufacturers.

The construction of a rolling mill at KraMZ forms part of the “Angara-Yenisei cluster”, an integrated project aimed at developing the Lower Angara Region.

March 20, 2013
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