Russian aluminium producer Rusal and Israeli automotive component manufacturer Omen High Pressure Die Casting have signed a a shareholder agreement to create a joint-venture to produce automotive components, Rusal said Monday.
Receive daily email alerts, subscriber notes & personalize your experience.Register Now
Under the joint-venture, Rusal will supply 5,000 mt/year of primary foundry alloys (with an option to increase quantity), while Omen will manufacture the automotive components.
The joint-venture will be called "VolkhOR" and will be held equally as a 50/50 share between both companies.
VolkhOR will be based on a production site at Rusal's Volkhov aluminium smelter and capacity is estimated at 5,000 mt/year of automotive components.
Operations will start in September-December 2014 with first production scheduled for the first quarter of 2015.
Financing will be provided on a parity basis, with each company investing $1 million, and external borrowings to cover the remaining funds.
Total investment is estimated at $20.6 million from 2014 through to 2016.
"Thanks to its close location to key sales markets as well as lack of local competition, VolkhOR has great potential. We expect that engine parts, steering columns, break-gear details and other auto-components produced at the JV will be in high demand in Russia and other CIS countries," Rusal's director for new projects Alexey Arnautov said.
Rusal is the world's largest aluminium producer with a capacity of 4.5 million mt/year of aluminium and 11.5 million mt/year of alumina.
The company is responsible for around 9% of global aluminium production, according to data on its website.