ArmInfo. Today, as a result of the actions of unfriendly countries and a number of external factors, the Russian aluminum industry is under unprecedented pressure, which puts it on the verge of an acute crisis with severe long-term consequences, the Russian Aluminium Association reports.
As the report says, a number of RUSAL enterprises are already operating on the verge of zero or even negative profitability. A deterioration in the economic situation or an increase in the fiscal burden may lead to the need to freeze or close them. In this case, about 5 thousand jobs in the industry and up to 30 thousand more in related and service sectors will be lost.
It is noted that a decision by the European Union on the 12th package of sanctions, which proposes to include aluminum products (wire, foil, tubes and pipes), is expected in the near future.
As the report says, a number of RUSAL enterprises are already operating on the verge of zero or even negative profitability. A deterioration in the economic situation or an increase in the fiscal burden may lead to the need to freeze or close them. In this case, about 5 thousand jobs in the industry and up to 30 thousand more in related and service sectors will be lost.
It is noted that a decision by the European Union on the 12th package of sanctions, which proposes to include aluminum products (wire, foil, tubes and pipes), is expected in the near future.
At the same time, export duties introduced by the government further worsen the situation with the cost of production - without the possibility of compensation. Even before the introduction of duties, the industry had low profitability - the forecast figure for 2024 is about 13%. According to analysts, EBITDA of industry enterprises after the introduction of duties may decrease by another 30%, and a number of production facilities will become unprofitable against the backdrop of low aluminum prices. In particular, according to analysts, the Kandalaksha, Volgograd and Novokuznetsk aluminum smelters, whose costs are higher than the industry average (with a total capacity of about 500 thousand tons), are under the threat of a strong "going into the negative", according to analysts.
The level of debt burden in the industry has reached high levels. Due to these deteriorating business conditions, operating cash flow does not cover CAPEX and interest on existing loans, which leads to an increase in net debt and the need for additional lending. Thus, the Net Debt/EBITDA ratio at UC RUSAL has reached a critical value of 12.3, which with further growth may provoke creditors to completely withdraw loan funds.
Investments in social programs and social infrastructure in the cities of presence may also be at risk - in particular, housing construction programs, the creation and equipping of medical and sports centers, as well as urban infrastructure development projects.
It is also noted that the situation with the outflow of personnel from Siberian cities was acute before. By 2036, the main regions of responsibility of industry enterprises - primarily Siberia - may lose 20% of the economically active population. After the inevitable reduction of social programs and infrastructure in Siberian cities, depopulation may intensify and exceed a critical level, and indicators of social well-being of the population in the regions may reach minimum values for many decades.
According to ArmInfo, the Yerevan aluminum plant "Armenal" threatens to be included in the list of unprofitable enterprises of UC RUSAL. The process of serious staff reduction has already begun here.
