Moscow, 29 July 2004: SUAL Group, one of the world's top ten aluminium producers and the Eurasia Foundation (EF), an American grant making organization, today announce they have entered Phase 2 of a two-stage initiative to promote the growth of small and medium enterprise (SME) employment opportunities in the Sverdlovsk Region, which is home to seven of the Group's 19 plants.

During Phase 1 of the project, that involved a pilot in Mikhailovsk City and the Nizhny Sergey district of the Sverdlovsk Region, large-scale research and round table discussions were organised that were focussed on the issue of SME development. The results have highlighted barriers to business entry, lack of access to financial resources and poor support infrastructure, as being among the main reasons preventing the growth of SMEs and limiting the involvement of entrepreneurs in this important sector. Other factors impacting on the development of SMEs included high taxation and land lease rates. In Mikhailovsk, small business growth is a third of that found in other towns of the region. Less than 10 per cent of the area's business potential is being utilised, according to research from the Russian Independent Institute of Social and National Issues.

Phase 2 aims to resolve such issues by establishing a steady and favourable environment for SME development, renewing interest in SMEs and increasing the number of jobs available in the pilot area, over an 18 month-period. The partners in the project aim to improve municipal procedures for the control and regulation of small businesses, and create a stable infrastructure to support SMEs. A key step will be to establish a Municipal Fund for SME support in Nizhny Sergey and branch offices in Mikhailovsk and Verkhny Sergey. The Fund's role will be provide quality business services to SMEs, training and advice to local entrepreneurs, and the provision of information and financial (micro-credit) resources. Implementation of Phase 2 will take place from now until November 2005.

Ann Bengtsson, SUAL's Senior Vice President, Human Resources and Social Policy, said: «In many cities, SUAL Group's enterprises are either the principal, or the only employer. This project, in cooperation with Eurasia Foundation, is designed to help solve one of the burning issues in modern Russia, namely to create new jobs in cities with limited economic opportunities, that from their inception were targeted at large industrial employers.»

Andrei Kortunov, EF Vice President for Russia added: «Through the programme, which we are carrying out together with SUAL Group, we seek to create conditions favourable for the growth and development of SMEs. We aim to help potential business owners improve SME business skills, introducing best management practices and optimising current legislation and taxation practices impacting upon small businesses. The programme will stimulate the creation of new SMEs, and strengthen further existing SMEs. In this way, new jobs will follow.»

Notes to Editors

About SUAL

The SUAL Group is a vertically integrated business among the ten largest aluminium producers of the world.

Annually, operations of the SUAL Group: • Mine some 4.4 million tonnes of bauxite • Refine more than 2 million tonnes of alumina • Produce over 890,000 tonnes of primary aluminium • Produce more than 50,000 tonnes of silicon • Manufacture more than 110,000 tonnes of aluminium products

For more information, please visit SUAL Group's website: www.sual.com

About Eurasia Foundation

The Eurasia Foundation was launched in 1992 with a major grant from the U. S. Agency for International Development. With continuing support from USAID and a growing number of other donors in Europe and Russia, the Eurasia Foundation, which is privately managed, has made more than 7,000 grants totaling USD140 million in the twelve countries of the former Soviet Union since 1993. In Russia, since 1993 the Eurasia Foundation has awarded more than USD64 million to support local initiatives in civil society, private enterprise development, and public administration and policy. For more information, please visit the Foundation’s websites: www.eurasia.org , www.eurasia-rfe.org and www.eurasia.msk.ru