The Krasnoyarsk Aluminium Plant:



"To cooperate with us means to have safe wings to fly with" The Stock Company Krasnoyarsk Aluminium Plant, KRAZ, is one of the largest in the world and is the second largest in Russia (almost 27% of the total production) producer of primary aluminium. The product range varies from small pigs of 15kg to T-bars of 600kg, and flat bars of 3,000kg to 5,000kg used for rolling. Technological and analytical equipment of the plant allows to produce aluminium based alloys of silicon, manganese, magnesium, and titanium. If a buyer requests, T-bars can be made as big as 2,000 kg of weight, and flat bars as big as 8,000 kg.
The pride of the citizens of Krasnoyarsk is high purity aluminium with only 0,005% of impurities, which is used in aircraft and outer space rocket engineering. Out of 80 thousand tons of annual world production of this strategic metal, 30 thousand tons are produced at KRAZ.
The foundation of the Krasnoyarsk Aluminium Plant was recorded as of 1964 when on April 30 the first aluminium was produced. The plant had been designed and built as an integral part of a territorial-industrial complex that included the Krasnoyarsk Power Plant, the Achinsk Alumina Plant,the Krasnoyarsk Aluminium Plant, and the Krasnoyarsk Metallurgical Plant (Rolling Mill). At present these enterprises have joined several other ones to form a financial-industrial group "TaNAKo".
In autumn of 1992 the state owned enterprise was transformed into a Stock Company the Krasnoyarsk Aluminium Plant. During the years of reforms the output of the plant had never decreased, on the contrary, it had grown. In 1996 the actual output of primary aluminium amounted to 777,144 tons, which is 45,153 tons (6%) more than in 1991. In 1997 about 790 thousand tons were already produced at KRAZ. It became possible owing to the high level of production technology, full use of the current capacities, and the competency of the personnel.
KRAZ has been successfully working in the world market for 30 years. Highly qualified personnel and modern analytical equipment guarantee the world standard quality of products. The largest portion of the produced metal is exported. All products produced by KRAZ’s are secured by long-term orders.
Sales of commodity aluminium, in tons ( year 1996)
Total 782,126.502
including:
tolling 413,980.617
export 313,943.683
local market 54,202.202
(Data of 1997 are to be drawn later in the year)

KRAZ: reliable production base The Krasnoyarsk Aluminium Plant was put on stream in 1964. In 1996 the plant worked at 102.6% of the capacity originally designed for aluminium production.
Output of the plant, tons per year
Technical aluminium 750,000
High purity aluminium 30,000
Anode paste 440,000
Recovered cryolite 35,000
Anode paste and recovered cryolite is fully used in own production.

The smelter comprises three electolysis (reduction) shops, the anode paste plant, the recovery cryolite shop, and a number of supporting facilities. Also, a brick production factory has been put on stream recently. KRAZ’s technological results are highly estimated by both Russian and foreign specialists. Comparative analysis carried out at two relative productions with similar technologies and parameters – Krasnoyarsk and Bratsk Aluminium Plants – revealed that basic technical economic indices are much higher at KRAZ.
Production at the plant is being renovated and modernized. During the last three years the smelter completed the reconstruction of one potroom with prebake anodes, and modernization of two other potrooms, which allowed to use technologies jointly developed by the specialists from the Kaiser Aluminum company, the Russian VAMI Institute, and KRAZ. Also, the paste plant and the gas treatment center were renovated. The analytical services of the plant were provided with new hardware. To accomplish that over 100 million US dollars were spent.
Alumina, cryolite, fluoride aluminium, petroleum coke, prebake anodes, coal-tar pitch are basic raw materials used at KRAZ to produce aluminium. The plant fully provides the production needs of its electrolysis shops in anode paste, which is produced on site. Electrolysis is a power-consuming process. Electric power supplied by the Krasnoyarsk Hydroelectric Station, located 50 km away from Krasnoyarsk, is being supplied into electrolysis shops through reducing distribution stations and silicon rectifiers. During the last several years KRAZ succeeded in reducing its consumption of raw materials and electric power per product unit of aluminium. At the SC KRAZ consumption of fresh fluorine salts per ton is 6-12 kg lower, of anode paste is 8-25 kg lower, and of electric power it is 400-700 KWT/h lower than at other Aluminium Plants of Russia.
Continuous growth of the output, high quality of the products, and consumption reduction per ton of raw materials and power testify to stability and high technical level of production at the Krasnoyarsk Aluminium Plant.
Financial condition of KRAZ Despite the difficulties of the financial and economic situation, in 1996 and 1997 the plant operated profitably and fulfilled its obligations to the Budget. In 1996 KRAZ earned 90 billion rubles of net profit.

The Balance Sheet of the plant as of January 1, 1997


Assets
Beginning of the year million rubles End of the year million rubles
I. Long-term assets
Intangible assets 1,448 7,060
Fixed capital 2,794,284 3,04,081
Investments in process 859,466 681,372
Long-term financial investments 232,753 352,085
1,448 7,060 2,794,284 3,004,081 859,466 681,372 232,753 352,085 Other non-working assets 68 Total Assets in Chapter I 3,887,992 4,044,666 II. Working assets Inventories 768,119 1,037,689 VAT on purchased values 57,720 89,906 Debt liabilities (for 12 months) 211,364 445,775 Short-term financial investments 8,328 11,693 Cash assets 22,822 15,638 Total Assets in Chapter II 1,068,352 1,600,701 Balance 4,956,344 5,645,367 Liabilities Beginning of the year million rubles End of the year million rubles IV. Capital and Reserve Authorised Capital 1,685 1,685 Additional Capital 2,580,409 2,623,906 Accumulation Funds 549,973 549,914 Social Assets Fund 543,100 378,419 Target financing 21,295 24,917 Total Liabilities in Chapter IV 3,702,462 3,578,871 VI. Short-term Liabilities Loan capital 164,830 226,519 Credit liabilities 1,088,443 1,838,057 Dividend payments 86 1,631 Incomes of future periods 462 232 Reserves of future expenses and payments 61 57 Total Liabilities in Chapter VI 1,253,882 2,066,496 Balance 4,956,344 5,645,367
Since 1995 the SC KRAZ has been working with an international auditing firm KPMG which is the largest out of 6 most famous auditing and consulting firms of the world. This firm is presently working in 130 countries. In the beginning KPMG was helping KRAZ to change its accounting system into international the GAAP system. This time KRAZ has placed a complete order with KPMG to audit its balance of 1997.
Vot otsyudova!!!

KRAZ: environment protection


One of the priority tasks of KRAZ today is the reduction of harmful emissions into the atmosphere. The administration of the company started solving these problems 7 years ago. In cooperation with the Kaiser company, two production buildings of the plant were reconstructed. The accumulated technical experience of ecological reconstruction, in consideration with the specific features of the enterprise, will be used by specialists of KRAZ in their further activities at other production facilities. The enterprise provides financial contributions to various ecological projects. In 1996 these contributions totaled 89,597 million rubles.

KRAZ: social stability


The stable operation of the enterprise is impossible without stability in the staff. As of today the number of employees at KRAZ is about 14 thousand, more than 10 thousand work on production. The plant is one of the key enterprises of the city. Unfortunately, the tense social situation at many Russian enterprises leads to strikes and other forms of protest, which produces a negative impact on the operation of enterprises.
KRAZ is one of the few enterprises in Russia without such problems. The plant guarantees its employees stable work and wages, provides them with high quality medical services, leasure and sport facilities. KRAZ is the only enterprise in Russia that has a social analytical service. Its specialists make social and psychological analyses of all activities at the plant. All together, these components create a stable and confident atmosphere. Stability is also a moral incentive. That's why the backbone of the staff is made up of highly qualified professionals, devoted to the company and able to solve problems to the benefit of KRAZ. They are keenly interested in improving technologies, but they are also concerned that the Krasnoyarsk Aluminum Plant should take its deserved place in the world economic system.

KRAZ: charity


Practically, KRAZ is the only enterprise in the Krasnoyarsk Territory that regularly arranges large scale charity actions. The ideology of the administration includes thinking about those who need help. Charitable assistance is given to social institutions (orphanages, asylums), hospitals, cultural, educational and sport facilities. In 1997 KRAZ assigned more than 1.5 million dollars to philanthropic purposes.
Last year the management of KRAZ went through fundamental changes. At this time there are three basic groups of share holders of the Company: Trade World Group, the Rossyisky Credit Bank and Krasnoyarsk businessmen-manufacturers. The new team started its work at the company in 1997. It consists of young, self-confident and purposeful people. In the short term they have done a lot of work which guarantees successful operation of the enterprise in 1998. The team started with bringing the financial and economic spheres in order, and imposing strict control on the cash flow at the plant.

Anatoly Bykov Deputy Chairman of the Board of Directors


Anatoly Bykov, 38, started working with the Krasnoyarsk Aluminum Plant in 1992. Since 1995 - member of the Board of Directors at Stock Company KRAZ. October 1997 - elected the deputy chairman of KRAZ Council by the Board of Directors. Since September 1997 - vice-president of the Rossyisky Credit Bank. August 1997 - elected the vice-president of Russian Boxing Federation, and given the "Golden Award" for efforts in the development of boxing in Russia. December 1997 - won the electoral campaign and became a deputy of the Legislative Assembly of the Krasnoyarsk Territory. He was the only candidate out of 200 who won on the first stage of the elections, having received 70% of votes in his area.
Currently he is the chairman of the permanent commission on industry, construction, transportation, fuel, and power industry at the Legislative Assembly of the Krasnoyarsk Territory.
"Krasnoyuarsk Aluminum Plant is a large, powerful enterprise. Grandiose in scale. But obviously God gave me a proper place in this life. Although, frankly speaking, not every man with common sense would envy my position. The Monomakh's hat is heavy, and the responsibility is rather big too. I'm sure in my strengths. I believe that I'm not an artificial leader but a natural one. Nature is fair, it never mixes up a rabbit with a tiger. In my opinion, God marks those who will lead people. To me the notions of honor, dignity, business reputation are not just words. Perhaps, I have achieved a lot because I've chosen a straight way and that's why - it's the shortest one. I don't tolerate slyness, dishonesty, or lying. I part with people who practice them at once and without regret. That's why my team consists of honest conscientious people. These business people are the future of our nation. Whoever I deal with: politicians, businessmen or ordinary people - I always speak as to them as equals, I say what I think, not what is expected of me. I respect human dignity, and it's possible to understand people only when treating them as equals. I can talk to a person of any political orientation and find mutual understanding, some leaders cannot, but I can. For us, the owners of KRAZ, the most important thing is that production should be stable so the workers can get their wages and benefits on time. We can perform this task, because now we have a real leader in the company. The current general director Yuri Ushenin is young and energetic. It's very good when the director has found understanding with the team from his first day. I think that KRAZ has a great future; its work is reliable and stable".

Juri Ushenin Director General, Stock Company KRAZ


Juri Ushenin is 36 now. He started working at the age of 14. He graduated from the Krasnoyarsk Polytechnical Institute's Department of thermal engineering. During first three years of work after graduation he was promoted from metal worker in the thermal power station to the head of the work-shop. He worked at different power supplying enterprises, and for three years in the Republic of South Africa. Since October 10, 1997, Yuri Ushenin has been the general director of KRAZ.
"It's a big honor, responsibility and competence to be a director at an enterprise with a staff of over 10 thousand people. The work is not easy, frankly speaking. But at 36 I'm ready for a challenge. I'm confident of my strengths. All my actions are based upon the main task: to keep good relations among share holders, to stabilize their relations with the administration of the plant and the staff, and to adjust the mechanism of control of all the financial flows and credits of the plant. The change of directors won't influence our business connections. We plan to keep them and to develop further.
The management of the plant was changed too: today the key positions at KRAZ are occupied by relatively young people. They are not sly or cynical, but they have energy and the will to work hard. At the same time a very strong and well coordinated team of technical professionals, who have been working for years in production has been preserved. They are real specialists with great experience and due to them the technological part of the plant is admired even by the specialists of other enterprises.
The plant is a large conglomerate, it's very difficult to keep track of cash flows, there were some drawbacks in this field before. Today everything is under a strict control. As a matter of fact now it is the most favourable time to work normally and to solve fi- nancial problems. Now the plant is 100% provided with the resources for 1998, and the main thing is that we have bought them 16 million dol- lars cheaper than last year.It gives me a ground to state that next year we'll manage to improve considerably the financial situation of the enterprise. So, I have an optimistic look on to the future.
Information
Postal addresses:
660111, Krasnoyarsk, Stock Company KRAZ
660073, Krasnoyarsk, Nikolaeva Str., 7A, Stock Company KRAZ, stock department
Phones:
Director-General, office - (3912) 248891
Stock department - (3912) 563778,566593
Faxes:
(3912) 563401, 563081
Teletype:
288156 KRAZ