RUSSIA: Oligarch Oleg Deripaska in an upbeat mood says he sees consumption going up in Asia and Russia and says there is money to be made in Russia

Record ID: 643778

  • Title: RUSSIA: Oligarch Oleg Deripaska in an upbeat mood says he sees consumption going up in Asia and Russia and says there is money to be made in Russia
  • Date: 15th September 2010
  • Summary: MOSCOW, RUSSIA (SEPTEMBER 14, 2010) (REUTERS) JOURNALISTS IN NEWSROOM RUSSIAN OLIGARCH OLEG DERIPASKA SEATED FOR INTERVIEW JOURNALIST WORKING (SOUNDBITE) (English) RUSSIAN OLIGARCH OLEG DERISPASKA, SAYING: "We watch very carefully on the demand situation and especially for our market for aluminium, with our volume of stock, even quite confident for the refinance for the next two years. It's important to keep in balance demand and supply, that's why this year RusAl, you know we have a 'mothballed' capacity, more than 700,000 tonnes. This year we re-started [production] at slightly more than 100,000 tonnes - we will keep our eyes on demand and the main demand now is coming out of Asia, China, Korea, India, Indonesia, Malaysia and this will be the key factor for our decision to move forward. " VARIOUS OF JOURNALISTS WORKING (2 SHOTS) (SOUNDBITE) (English) RUSSIAN OLIGARCH OLEG DERISPASKA, SAYING: "In all emerging markets - it's the same in Russia - look at Russia, consumption in 2009 compared with 2010 -- 2010 it's already up 26 percent. You know same in India -- urbanisation and transportation market is a key sector for metal demand and we believe that inefficient capacity -- capacity which wouldn't be cost efficient -- will go off in the end of this year and the beginning of next year." JOURNALIST WORKING (SOUNDBITE) (English) RUSSIAN OLIGARCH OLEG DERISPASKA, SAYING: "The market, the aluminium market down almost 20 percent, that's why we feel very comfortable and we believe that unless there would be any big issue with the public debt, the aluminium price will come back to 2,400 in the end of the year, and it will create significant opportunity for our shares."
  • Embargoed: 30th September 2010 13:00
  • Keywords:
  • Topics: Industry
  • Reuters ID: LVA1I7VH7HXHY9RUABAJEDEMCR6L
  • Story Text: Oleg Deripaska, chief executive of RUSAL, the world's top aluminium producer, told Reuters Insider Television on Tuesday (September 14) his team would be working to balance supply and demand, which he sees growing in Asian markets.
    "We watch very carefully on the demand situation and especially for our market for aluminium, with our volume of stock, even quite confident for the refinance for the next two years. It's important to keep in balance demand and supply, that's why this year RUSAL, you know we have a 'mothballed' capacity, more than 700,000 tonnes. This year we re-started (production) at slightly more than 100,000 tonnes -- we will keep our eyes on demand and the main demand now is coming out of Asia, China, Korea, India, Indonesia, Malaysia and this will be the key factor for our decision to move forward, " said the 42-year-old billionaire.
    Deripaska sees demand rising by 26 percent towards the end of 2010 in emerging markets, including Russia.
    "In all emerging markets -- it's the same in Russia -- look at Russia, consumption in 2009 compared with 2010 -- 2010 it's already up 26 percent. You know same in India -- urbanisation and transportation market is a key sectors for metal demand and we believe that inefficient capacity -- capacity which wouldn't be cost efficient -- will go off in the end of this year and the beginning of next year," he said.
    RUSAL, the world's leading aluminium producer, reported a net profit of US$1.02 billion (923 million euro) for the April-June period, compared with a US$230 million (177 million euro) loss a year ago and a US$247 million (190 million euro) profit in the first quarter this year.
    Rising global demand and increasing aluminium prices helped the company to return to profit this year.
    Asked about the ongoing conflict between Deripaska's RUSALand Vladimir Potanin's Interros, the main shareholders in Norilsk Nickel, Deripaska called for big changes in the way Norilsk is managed.
    "It's not conflict between two personalities, you know RusAl has a significant stake in Norilsk Nickel and we expect in value our stake should be much more higher if it would be properly managed, that's why we starting a new -- we demand to have a new shareholders' meeting to elect, you know, proper board. We believe that independent director should be in majority in the new board and a professional team in Norilsk for management should be established. This is a key for further development -- there should be strategy revision, proper corporate governance, legal structure should be changed and asset allocation should be based on new Norilsk strategy," he said.
    Deripaska said he saw no reason to merge RUSAL with major nickel producer Norilsk Nickel of which RUSAL is a 25 percent shareholder, until aluminium prices recover. He said he would not sell out of Norilsk despite his dispute the other 25 percent co-owner, Potanin and added the row could ultimately be solved without state intervention.
    He remains buoyant on prospects for the Russian economy and markets, telling foreign investors to focus on the chance to make money in Russia.
    "In Russia you can make money, this is the right signal. We have competitive industry, (the) market grows in the right direction and Russian demand -- the internal market -- properly develops -- you know as I said, in aluminium it's more than 26 percent in growth, which reflects a growth in manufacturing -- some export opportunity outside which Russian company (companies) experienced n the last seven months - that's why investors should worry about profit and opportunity," said Deripaska.
    With global investor appetite for emerging markets rarely keener and available liquid assets relatively scarce, plans for state divestments such as those in Russia are awaited with great interest. Together with Poland and Turkey, some US$80 billion (61 billion euro) of stakes may be on offer over the next three years.
    But the fate of a new wave of Russian privatisation is largely dependent on overseas concern about local governance and also on the authority of Vladimir Putin, who is widely expected to return as president in 2012 and has criticised past sell-offs.
    Russia's near-pariah status among investors means its stocks sell at big discounts to other major markets and emerging economic peers such as Brazil, India and China.
    And some investors have questioned the extent to which Russia is actually ready to part with stakes in lucrative, high-profile companies that include oil and gas giants such as Gazprom and Rosneft as well as the world's biggest infrastructure firm Russian Railways.
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