V.Putin.On the situation in city Pikalevo.04.06.09.Part 2

Описание: Prime Minister Vladimir Putin inspected an alumina facility at Basel Cements Pikalyovo Alumina Refinery.Part 2
4 June 2009

Председатель Правительства Российской Федерации В.В.Путин провел совещание по вопросу "О ситуации на предприятиях г. Пикалево Бокситогорского района Ленинградской области".
04.06.2009
После совещания, на котором обсуждалась ситуация на предприятиях Пикалево, Председатель Правительства России В.В.Путин пообщался с жителями города. Премьер кратко рассказал им об итогах совещания

Vladimir Putin: Thank you. After I received this note we held a number of meetings in Moscow, and discussed the issue at different levels. On June 1, Monday, I met with a few owners, and with the administrations concerned. I said then that I would visit Pikalyovo.

Violating the law was the worst thing which could have been done to prevent me from coming here. I believe this was done in collaboration with those who didn't want me to come or maybe it was done for the money of those who did not want me to come here.

Because we cannot encourage violations of the law regardless of who violates it or what their excuse is.

At the meeting, I spoke about the responsibility of trade unions in this respect. I think I made it clear enough. Today, we will talk again about the responsibility of the owners and of the administration. Mr Derbin explained the gist of the conflict, although partly, it is rooted in economic problems. Let us start with the owners, and listen to what they have to say.

Oleg Deripaska: I will not talk about the reasons for the division of the amalgamated enterprise. RUSAL received the plant after the division. We managed alumina production. The following are approximate volumes and prices. There are three production lines - alumina, cement, soda and potash. We are the main processing complex, and have the most personnel - 2,400 people. We account for 15% of the revenues.

In late 2007, external market conditions started changing. Here on the second page I have approximate prices for the product before the complex was shut down.
Based on these prices, our losses per unit of production reached 3,000 roubles per tonne, and even more than that. Furthermore, we could not acquire sufficient alumina because of a decline in aluminum production at north-western plants and the Volgograd Aluminum Plant.

We discussed the plant's transfer to the construction group so that cement could be used for internal purposes, and made a decision on the group's partial conversion to cement production. However, we failed to reach agreement among all participants on the new financial terms. Here, on the third page, I show our proposals. We believe that it will provide equal revenue to all the participants in the chain.

Today, we have come to terms with the main supplier - Fosagro, and are conducting further negotiations with its managers. We tried more than once to set up a joint venture with them because they and Basel Cement are the primary parties interested. Fosagro also uses hydrate. RUSAL is the main consumer of Fosagro's product - fluoride aluminum. There is an opportunity to reach a long-term agreement.

The terms which we offered have not been agreed upon yet. However, we hope to find a solution soon.

Filaret Galchev: Mr Putin, we became shareholders of this plant in 2005. This problem existed before, but when we arrived...

Vladimir Putin: In 2005 or 2004?

Filaret Galchev: In 2005. We took control of the plant some time in May. Before, it had been part of SUAL, its secondary unit. All of the plants problems continued to exist. When we came, we agreed with the Federal Anti-Monopoly Service and all participants in the process - SUAL and Fosagro - on a plan of production. We signed a long-term contract which was observed.

During this time, our company invested about $100 million into cement production. After SUAL merged with RUSAL, all participants in the process were offered a chance to buy out the plant.

Such negotiations were held.

After that, RUSAL determined to retain the property, and production continued though in an atmosphere of uncertainty. In 2007, we were offered to sell the Pikalyovo Cement plant, but we refused.
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