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Russian market is full of 'fantastic opportunities'

Russian market is full of 'fantastic opportunities'
“The Forum has become a great meeting place for international business. Just think of the things that have happened on the IT side. You’re seeing a lot of good things happening,” Klaus Kleinfeld told RT at the 2012 St. Petersburg Economic Forum.

Kleinfeld is CEO and chairman at Alcoa, the world’s third largest aluminum producer, and has been doing business in the Russian market for almost twenty years. The differences in the business environment between 1993 and 2012 are tangible, calling the economic forum itself an indicator of the positive changes around the country, he says.  

Alcoa is already heavily invested in the Russian market, with multiple business sites, over 5,000 employees, and approximately a billion dollars worth of investments. But Klein expects investment in aluminum to grow over the years, saying that this is “just the beginning”.

“The thing now is to get the productivity invested, to make sure that we also educate the market about the great capabilities of aluminum; recyclability, lightweight – there are fantastic opportunities there. If you look at the consumption per inhabitant here, it’s about 6 kilograms. The average in Europe is about 40 kilograms of aluminum per inhabitant, so you see that we’re standing just at the beginning of really utilizing the power of that material as well.”

Despite the recent 20% drop in aluminum prices and the troubled European economy, Klein has founded his optimism on a growing demand for aluminum and the expansion of the industry into areas and markets that are only beginning to realize the potential of this metal, saying the fundamentals for further development are undeniably strong.

“We’ve seen a 10 percent world market demand growth last year. We project 7 percent world market demand growth this year. We’ve seen that physical demand is very, very strong… we’re entering a lot of industry – the automotive industry is just starting to use lightweight materials. Consumer electronics are just starting to understand replacing plastic with aluminum, getting better sustainability, getting better recyclability. Aluminum is infinitely recyclable, 75% is still in use that was ever produced on this planet. These are great statistics, and I’m very optimistic that this is also going to play well in the Russian market.”