1

KRASNOYARSK TECHNOLOGICAL VALLEY:

NEW OPPORTUNITIES FOR BUSINESS DEVELOPMENT IN RUSSIA

KRASNOYARSK REGION

22

7,1%

64 mln.t.

PRIMARY ALUMINIUM PRODUCTION

1,6%

64mln.t.

PRIMARY ALUMINIUM CONSUMPTION

1,4%

87 mln.t.

ALUMINIUM PRODUCTS CONSUMPTION

China Brasil Germany Japan India Bahrain Russia

73%54%35%

production

consumption

exportIt is necessary to change the strategy - from the orientation towards COMMODITY EXPORTSto development of DOWNSTREAM PRODUCTION

deficit

RUSSIA AND CIS COUNTRIES CONSUMPTION OF ALUMINIUM PRODUCTS REMAIN AT

RELATIVELY LOW LEVEL

DEVELOPMENT IS CONSTRAINED BY A LACK OF MODERN FACILITIES AND SLOW DEMAND

33

primary aluminium; 1180; 70%

secondary alloys; …

import (semi-finished

prod.); 310; …

METAL SOURCE

EXPORT OF SEMI-FINISHED PRODUCTS - 230 000 TONS (15% OF PRODUCTION)IMPORT LEVEL – 300 000 TONS OF SEMI-FINISHED PRODUCTS (OVER 20% OF DEMAND)

20181,7 MLN. T.

PRODUCTION TYPE

Other; 18;1%

Powder;24;...

wire rods; 319; 19%

casting; 420; 25%extrusio

n; 371; 22%

FRP&foil; 528; 31%

automotive; 256;

15%

construction; 353; 21%

electricity; 263;

16%

machinery; 166; 10%

foil; 127; 7%

packaging; 158; 9%

consumer goods;

245; 15%

others; 112; 7%

20181,7 MLN. T.

20181,7 MLN. T.

CONSUMPTION SECTORS

2018:

ESTIMATED ALUMINIUM PRODUCTS MARKET – 1,7 MLN TONS

THE STRUCTURE OF ALUMINIUM PRODUCTS MARKET, THOUS. T.

LARGEST CATEGORIES OF IMPORTED ALUMINIUM PRODUCTS -

POTENTIAL FOR IMPORT SUBSTITUTION

4

SHEETS AND STRANDS FOR

CONSTRUCTION

~ 35 thousand tons per year

ALUMINIUM FOIL

~ 25 thousand tons per year

STRUCTURAL SECTIONS AND

CONSTRUCTIONS

~ 16 thousand tons per year

LIGHT ALLOW WHEELS

~ 40 thousand tons per year

ALUMINIUM COOKWARE

~ 15 thousand tons per year

HEATING RADIATORS

~ 50 thousand tons per year

THE LARGEST CATEGORIES OF IMPORTED ALUMINUM GOODS

4

5

OBJECTIVES

ALUMINIUM TECHNOLOGICAL VALLEYS DEVELOPMENT

DEVELOPMENT OF NEW INNOVATIVE DOWNSTREAM PRODUCTIONS

CREATION OF FAVOURABLE INVESTMENT CLIMATE FOR NEW PRODUCTION FACILITIES

CREATION OF NEW HIGH-QUALIFIED WORKPLACES

DEVELOPMENT OF EXPORT

CREATION OF THE BASIS FOR THE GROWTH OF TAX ASSESSMENTS

5

7

> 460 компанийwith participation of foreign capital (2016)

KRASNOYARSK ALUMINIUM SMELTER : INDUSTRIAL LEADER OF KRASNOYARSK

Capacity• > 1 mln. tonnes

• liquid aluminium• alloys (slabs, billets, ingots)• high purity aluminum

One of the largest regions in Russia

Industrial capital of Siberia

Extensive logistical network

2,87mln people

2 367thous. sq. km

1 579,1 bln roublesGRP in 2015

394,4bln roublesinvestments in 2015

Krasnoyarsk Technological Valley

KRASNOYARSK REGION 6

≈ 200 ha of land plots for investors

POTENTIAL SUPPLIES TO NEW

PRODUCTIONS

Primary aluminium

Alloys

High purity aluminium

Billets

Slabs

Pipes

Wire rod

Rod

Profile

Forgings and extrusions

KRASNOYARSK TECHNOLOGICAL VALLEY

CONCEPT

Free plots and space near the Krasnoyarsk

metallurgical works

Highly available infrastructureCompetitive cost of resources

Creation of a special industrial economic

zone (116-FZ)

Private-public partnership to create and

develop infrastructure

Low Carbon Aluminium (renewable energy

sources)

R&D, partnership with the Siberian Federal

University

Expertise

Railway infrastructure, motorways,

logistics

Available land plots for new projects close to

KRAMZ industrial facilities

The first stage of the project is to be

implemented using the readily available

engineering, production and transport

infrastructure

PROJECT SITE WITH

READY-TO-GO

INFRASTRUCTURE

8

INVESTMENT PROJECTS:

OPPORTUNITIES FOR INVESTORS

PRODUCTION OF WIDE RANGE PROFILES FOR TRANSPORT AND

CONSTRUCTION

INVESTMENTS IN THE NEW ALUMINIUM WHEELS PLANT

DEVELOPMENT OF ROLLING MILL PRODUCTION PLANT

PRODUCTION OF MASTER ALLOYS

PRODUCTION OF ALUMINIUM RONDOLES AND TUBES

PRODUCTION OF HIGH PURITY ALUMINIUM OXIDE

PRODUCTION OF COOKWARE

MANUFACTURE OF ALUMINUM CABLES

PRODUCTION OF ALUMINUM WINDOW FRAMES AND SANDWICH

PANEL

PRODUCTION OF ALUMINIUM FRAMES FOR

SNOWMOBILES AND BICYCLES

9

SPECIAL TREATMENT OPTIONS FOR REGIONAL DEVELOPMENT

KRASNOYARSK TECHNOLOGICAL VALLEY

SPECIAL ECONOMIC ZONE

FEDERAL LAW ON SPECIAL ECONOMIC ZONES

IN THE RUSSIAN FEDERATION (SEZ) OR

COMPLIANCE WITH WTO STANDARDS,

INTERNATIONAL LAWS AND PRACTICES

10

SPECIAL TAX AND CUSTOM BENEFITS FOR INVESTORS

* Basic conditions

TAXES AND RATES RUSSIASPECIAL ECONOMIC

ZONES

Profit tax paid to federal budget 3% 2%

Profit tax paid to regional budget 17% 0 - 13.5%

Property tax 2.2% 0% (up to 10 years)

Land tax 1.5% 0% (up to 5-10 years)

0% Import duties on equipment, components and materials imported into SEZ

0% VAT on equipment, components and materials imported into SEZ

0% Export duties on finished products exported outside the Customs Union (Russia,

Belarus, Kazakhstan, Armenia, Kyrgyzstan)

FREE CUSTOMS ZONE

11

13

KRASNOYARSK ALUMINIUM SMELTER –

INDUSTRIAL LEADER OF KRASNOYARSK12

1,024kt of output

in 2016

4,200employees

at the smelter

5,500employees of

contractors

No 1UC RUSAL site

in terms of output

2%of aluminium produced

worldwide

The unique Green Soderberg

process

25potrooms

3casthouses

Production of high-tech and

innovative alloys

12

KRAZ PRODUCTION AND SALES

Aerospace Electronics Transport Construction

KEY SECTORS:

40%of the total output are hi-tech

products and alloys

PRODUCT

SALES

EUROPE

Сitroen, BMW, Novelis, Constellium, Aleris, Montupet, Noble Group, Saint Jean

Industries , Elval, Metalimex

ASIA

Toyota. Novelis Korea, Mitsui Co Ltd., Kosei Aluminum Co, Intelorg, Bluescope

AMERICA

Laurand Associates, Toyota Tsusho America , Beck Aluminum

primary aluminium

alloys (slabs, billets, ingots)

high purity aluminium

KRASNOYARSK METALLURGICAL WORKS

115,000 tonnesper annum

> 2,000employees

Products: billets, slabs, pipes, wire rod, rod and

profiles, forgings and extrusions

AN EFFICIENTLY OPERATING SUPPLY CHAIN

ASIA

EUROPE

AMERICA

AFRICA

KrAZ

St. Petersburg

Novorossiysk

Vanino

Nakhodka

Moscow

VladivostokTemryuk

5 000 km / 2 weeks from Krasnoyarsk to the major

seaports

Well-developed road and rail network, as well as water transport infrastructure, have allowed the company to

successfully serve both domestic and export markets over the last 30 years

15

SUPPORT OF THE TECHNOLOGICAL VALLEYS DEVELOPMENT

RUSSIAN ALUMINIUM ASSOCIATION

THE MISSION OF THE ASSOCIATION IS TO CREATE OPTIMUM

CONDITIONS FOR THE DEVELOPMENT OF ALUMINIUM INDUSTRY IN

RUSSIA

Innovative industrial development in Russia, creating conditions for new

facilities, technologies and products

Market development and expansion of demand

Standardization and improvement of product quality

Educational programmes

16

An integration of the aluminiummarket participants aimed at thedevelopment of the common policy forpromotion of aluminium processing,taking into account cross-industrystrategies and comprehensive supportof businesses operating in aluminiumindustry

Mission:Promotion of aluminium use

Date ofestablishmentDecember 15,2015

ALUMINIUM ASSOCIATION IS …

98member

companies

ALUMINIUM ASSOCIATION: KEY GOALS

1. IMPORT SUBSTITUTION AND EXPANSION OF ALUMINIUM PRODUCTS FOR EXPORT- Creation of new production facilities, materials and products- Attraction of industrial partners- New market place- Contribution to the improvement of the quality of products – development of innovation, modernization of

production facilities

2. DEVELOPMENT OF NEW LEGISLATION, IMPROVEMENT OF REGULATION FRAMEWORK

3. STANDARTIZATION AND TECHNICAL REGULATION. PROTECTION AGAINST COUNTERFEIT IMPORTS

4. INTERNATIONAL COOPERATION:- Cooperation with international associations, partners- Participation in the global initiatives in the area of ecology and sustainable industrial development

5. PROTECTION OF DOMESTIC MARKET FROM THE UNFAIR COMPETITION

6. PROVIDING THE INDUSTRY WITH HIGHLY QUALIFIED PERSONNEL

7. ASSOCIATION’S SPECIAL PROJECTS- Realisation of Technological Valleys project- Centres of excellence (welding, casting)- Centers of scientific and technical expertise- Centre of product certification- Centre of industrial educational standards

8. POPULARIZATION OF ALUMINIUM- Industrial expert activity

ALUMINIUM ASSOCIATION MEMBERS

Invitation for cooperation with the Aluminum Association of Russia:

o producers and consumers of aluminum and aluminum-containing productso industrial research and design instituteso development institutes and financial organisationso industrial associations and unionso and other companies and organisations interested in development of the domestic

aluminium industry

Association of Russian aluminumproducers, suppliers and consumers

Kotelnicheskaya nab., 17, office 422,Moscow, 109240, Russian Federation

web: www.aluminas.rue-mail: info@aluminas.ru

Tel.: +7 (495) 663 0444

The Aluminium Association is open to discuss various cooperationforms and projects focused on extending the aluminium application

THANKS FOR YOUR ATTENTION!

web: www.aluminas.rue-mail: info@aluminas.ru