UC RUSAL Sustainability report 2015


Strategy

Strategy G4-1

In 2015, UC RUSAL celebrated its 15th Anniversary. Over these years the Company has grown from a regional producer to a global market force operating in five continents.

The Company has adopted the Development Strategy of UC RUSAL, which sets targets to the year 2021. Vector of development is aimed at strengthening UC RUSAL’ leading position in the aluminium industry by improving the efficiency of production, development of its own power base and access to competitive sources of energy supply, providing own raw materials for aluminium production. An important task is to ensure transport safety of the business due to the optimization of the logistical system. The Company also intends to strengthen its position in key markets, focusing on the promising markets of Russia and Asia.

The observed uncertainty of the world economy trends during the past few years contributed to the instability of the situation in the aluminium market, which required the Company to adapt quickly to the new conditions by increasing the flexibility of the production process and the ability to focus on customer needs.

Considering the changing situation in the aluminium market, UC RUSAL has set a new strategic goal – to become the world’s most efficient and ecologically pure producer in terms of production process and technology.

To achieve this goal the Company invests in research and development (including the production of new types of alloys, РА-550 and the inert anode technology, development and sales of new types of products) and in updating its production facilities.

In the medium term, the Company intends to raise the share of value added products in the structure of production (bringing it up to 55%) and increase the sales of these products in the key markets of Europe, Asia and the USA. For this purpose the comprehensive production development program is implemented, within the frames of which the Company shall change the structure of its production portfolio and develop the quality management system and the UC RUSAL Business System. The nearest plans include adoption of the Production Strategy.

An important economic task for UC RUSAL is to increase the domestic demand for aluminium. The Association of Aluminium Producers and Consumers has been created to find possible solutions.

The Company co-operates actively with domestic consumers, maintaining a constructive dialogue with them, and with joint efforts hopes to identify new areas of application for aluminium products and new products which can be required in the future. The Company has already began the implementation of the program to support the domestic aluminium consuming industry, thus promoting the import substitution.

The Company continues to make every effort to remain effective and sustainable.

The success in achieving this is based on continuous cost reduction, optimization of procurement, transportation and logistics. The ongoing program of facilities rationalization involves preservation of a number of production sites.

Despite the changing economic conditions, the strategic priorities in the sphere of ecology stay unchanged: investments are made both to maintain the capacities and modernize the production facilities, as well as to protect the environment. UC RUSAL also intends to pay due attention to environmental protection and energy efficiency in the future.

All social programs in the areas of operation, such as education, health care, culture and support of social initiatives in cities and villages of the Company’s presence are preserved.

Value generated and distributed, 2013–2015, USD mln [17] G4-ЕС1

Indicator

2013

2014

2015

Direct economic value generated

9,811

9,387

8,680

Revenue

9,760

9,357

8,680

Financial income

51

30

 

Direct economic value distributed

14,449

17,465

11,435

Operating costs
9,562
8,230
7,084

Cost of sales

8,429

7,223

6,215

Distribution expenses

488

402

336

Administrative expenses

645

605

533

Salaries and other employee payments and benefits
1,124
1,007
761

Wages and salaries

869

795

616

Contributions to defined contribution retirement plans

246

207

143

Contributions to defined benefit retirement plans

9

5

2

Payments to providers of capital
3,668
7,977
3,374

Interest expenses on operating activity

787

1,361

1,132

Interest paid under financing activity

631

677

516

Repayment of principal

2,250

2,271

1,476

Dividends to shareholders

-

-

250

Payments to governments
81
238
205

Income tax

81

238

205

Investments in communities
14
13
11

Charity donations

14

13

11

Economic value undistributed

-4,638

-8,078

-2,755

 

Assets, liabilities and equity

2013

2014

2015

Total assets

20,480

14,857

12,809

Net liabilities

10,109

10,142

8,372

Total equity

6,550

2,237

1,391

Operating results, thousand tonnes

Indicator

2013

2014

2015

Primary aluminium production

3,857

3,601

3,645

Alumina production

7,310

7,253

7,402

Bauxite production

11,418

12,108

12,112