SUAL Group is to construct a new ScovO plant for the production of aluminium non-stick kitchenware in Stupino (Moscow region). The production is expected to be launched at the beginning of the next year. The project is estimated at some USD16 million and will more than double production from the SUAL Group's Demidovsky business unit.

Plant construction will start in March 2005, 4 km from Stupino and will take 12 months. The total number staff at the plant will be 200-250 people. In 2007, the operation is expected to reach production capacity of 5.5 — 6 million pieces of cookware annually. In 2006, it is expected that the plant will produce 50% of this volume, namely 2.75 million different pieces of cookware. The anticipated total annual output of non-stick kitchenware at Demidovsky's existing operations and ScovO should reach 10 million pieces by 2009.

At the new plant, cookware blanks will be produced through two different technologies: punching and stamping. Non-stick coating will be applied using the most advanced technologies in the world: the evaporation method for the production of premier segment cookware; «curtain» technology — for mass segment cookware and the rolling method for economy class cookware. Production plans envisage about 2 million pieces of premier product, 1.5-1.7 million mass market items and 2 million economy items.

Selection from the potential equipment suppliers will depend on the outcome of a competitive tender. Three leading Russian producers of aluminium semi-finished products are expected to be the main raw materials suppliers: Kamensk-Uralsky Metallurgical Plant, Samara Metallurgical Plant and Stupinsk Metallurgical Plant. Du Pont (TeflonClassic, TeflonSelect, TeflonPlatinum coatings) and Akzo Nobel (Skandia, Matrix) will be ScovO partners for non-stick coatings. Du Pont and Akzo Nobel will license a new plant to produce their brands of non-stick coating, which will be an important aspect in the marketing of the products. Quality management system ISO 9001:2000 and environmental management system ISO 14001 will be introduced at the plant.

Brian Gilbertson, President of OAO SUAL Holding said: «Downstream business that links the production of primary aluminium with the end metal user is a key area of product diversification and helps to enhance the stability of our business. Construction of the «Scovo» plant is a further step for SUAL Group aimed at increasing the production of value added aluminium products».

Inessa Smirnova, General Director of ZAO Demidovsky added: «The main reason for constructing a new plant is the strong potential for market growth. Not every industry shows a 25-30% growth annually. But, even if the non-stick kitchenware market develops at slow rates, for example 10-15%, the demand must be satisfied, and it should be done not by Italian, Chinese and French producers, but by domestic ones. It is an opportunity of which we must take advantage. The team at Demidovsky has ambitious plans to expand. This is a new departure for the operation: to introduce new lines in cookware and break new ground in the Russian market by bringing quality domestic products to the Russian consumer.

ScovO will be the Russian leader in the following respects:

• High quality equipment comparable with the leading West-European producers of aluminium non-stick kitchenware;
• Variety of technologies used for applying of non-stick coating;
• Production capacity — about 6 million pieces of cookware annually
• Design and quality of finished products.

Notes to editors:

The SUAL Group is a vertically integrated business and is among the ten largest aluminium producers in the world. SUAL comprises enterprises involved in bauxite mining, alumina refining, production of silicon, aluminium semi-finished and finished aluminium products. Annually, the operations of the SUAL Group: mine some 5 million tonnes of bauxite, refine more than 2.1 million tonnes of alumina, produce over 920,000 tonnes of primary aluminium, produce more than 60,000 tonnes of silicon and manufacture more than 135,000 tonnes of aluminium products.

Demidovsky Consumer Goods (Kamensk-Uralsky, Sverdlovsk region) is a part of SUAL Group, the leading producer of aluminium cookware in Russia. It was established in 2000.

Demidovsky was the first company in Russia to be licensed by the American concern DuPont to produce non-stick coatings for the world-renowned Teflon Classic and Teflon Platinum brands. The company's production with the trade mark ScovO won the «Product of the Year» and «100 best goods in Russia» repeatedly.