Russian aluminium firm UC RUSAL has announced plans to invest $17m to increase its packaging division’s annual foil production by 25% to 100,000t by 2014.
RUSAL said the division will also review its production portfolio to focus on converter foil.
To achieve the growth, the company hopes to modernise the three largest CIS foil and packaging plants SAYANAL, Ural Foil and ARMENAL.
Ural Foil’s production capacity is expected to increase from 16,000t to 24,000t per annum, with investments amounting to $7m, while ARMENAL’s production capacity will rise from 26,000t to 33,600t a year, with investments amounting to $6m.
The production capacity of SAYANAL plant is expected to increase from 38,000t to 42,000t per annum, with an investment of $4m and the project’s payoff period is estimated to be between three and four years.
Following completion of the projected growth in production, RUSAL plans to install new equipment in the packaging division’s plants for future development.
According to company analysts, the current global packaging market (excluding China) amounts to an annual 800,000t.
Nearly 60% of the market is accounted for by converter foil, 15% by household foil, 10% by technical foil as well as 14% to 15% by the container foil used for food packaging, cooking and in-flight catering.
UC RUSAL packaging division director Sergey Goryachev said the household and converter foil currently make up 70% and 30% respectively of the company’s production portfolio.
"We want to raise the converter foil share up to 50% by increasing its production as the margin on this product is twice as high as household foil," he said.