Partners agree to joint initiative to create new jobs and businesses in remote Russian region

SUAL Group, one of the world's ten largest aluminium companies, today launches a joint initiative with the Eurasia Foundation, to support small business development and improve employment opportunities in Nizhny Serginsk Region, 120 km west of Russia's third city Yekaterinburg.

The initiative will focus on the town of Mikhailovsk, where one of SUAL's businesses, URAL Foil, is the main employer.

Ann Bengtsson, Senior Vice President of HR and Social Policy at SUAL Holding explains: «Remote communities, such as this one, are facing considerable challenges in adapting to the new economic and social realities in today's Russia and this initiative, which is part of a wider social policy strategy at SUAL, aims to tackle these challenges head-on. It also underlines our commitment to focussing on regional economic development issues and actively supporting programmes to alleviate them.»

Research demonstrates that small and medium sized enterprises (SMEs) are one of the most effective means of spurring economic growth and creating jobs in small communities and the joint initiative will develop the region's small business support infrastructure by tackling barriers to entry such as:

• Undeveloped infrastructure for small business support
• Lack of basic business skills, especially with start-ups
• Limited access to finance for SMEs
• No monitoring and evaluation systems in place to assess the effectiveness of local development programmes and strategies

The initiative will comprise activities such as the establishment of a Business Support Centre in Mikhailovsk to provide business advice, information and training services to local SMEs. It will also offer them training and performance management in priority economic sectors and offer a micro-credit scheme providing small loans to entrepreneurs.

The programme implementation will be spread over a period of 18 months and is expected to create approximately 250 long term employment opportunities in the Nizhny Serginsk Region, as well as the diversification of economic activities and sources of income in Mikhailovsk. It will also train more than 300 entrepreneurs and provide loans, which will see a potential increase in tax revenue from SMEs of 20 per cent.

Mrs Bengtsson added «I am delighted we will be working with the Eurasia Foundation to establish a more supportive small business environment in Nizhny Serginsk Region and contribute to its long term economic future in such a sustainable way. We hope to build on the successes of this programme in other Russian regions where our operations are located.»

In a statement issued in Washington, Eurasia Foundation Chair Sarah Carey and President Charles William Maynes expressed their support for this programme: «This new partnership combines Eurasia’s unique expertise in business development with SUAL's commitment to developing the regions in which it does business. We are pleased to be working with SUAL on this important initiative.»

Eurasia Foundation will conduct the first phase of the programme, a baseline assessment in the region to identify priority areas for small business development. SUAL will contribute financially to the programme, supervise the implementation and participate in the evaluation of its progress.

Notes to Editors

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 $140 million in the twelve countries of the former Soviet Union since 1993. In Russia, since 1993 the Eurasia Foundation has awarded more than $64 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 .

The SUAL Group is a vertically integrated business amongst the ten largest aluminium producers in the world. It comprises operations in 9 regions of Russia.

Annually, SUAL Group:

• Mines some 4.4 million tonnes of bauxite
• Refines more than 2 million tonnes of alumina
• Produces some 890,000 tonnes of primary aluminium
• Produces more than 50,000 tonnes of silicon
• Manufactures more than 110,000 tonnes of aluminium products.