UC RUSAL signs long-term service contract with freight one

UC RUSAL, a leading, global aluminium producer, announces the signing of an exclusive three-year service contract with OJSC Freight One for the export of finished products in covered wagons.

Freight One will provide transportation services for the export of RUSAL’s aluminium produced at all of the Company’s smelters in Russia. Aluminium and other cargo volumes shipped by the East-Siberian, Krasnoyarsk, West-Siberian, Sverdlovsk and October railways are estimated to be from 90 to 120 thousand tonnes per month.

"We expect a positive result from this long-term contract with Freight One in the near future, as it allows us to reduce transportation costs, increase turnover of rolling stock, reduce overall inventory levels and working capital,” commented Vladislav Soloviev, first deputy CEO of RUSAL.

“As part of our comprehensive program to reduce transport and logistics costs aimed at improving the operating profitability of the Company, we have also entered into long-term contracts for other types of rolling stock through transparent tender procedures involving the widest possible range of participants, which have allowed us to gain competitive market prices. We have also launched a "door to door" container program for finished products that are loaded into sea containers at our facilities, for example, in Siberia and are transported without any additional overloads directly to consumers in Japan, Europe, Turkey or South Korea. All these measures have already resulted in savings of USD25 million per year. In the near future, we also intend to optimize the whole logistics structure for other types of rolling stock so as to optimize the cost of handling raw materials and finished products in ports. We expect that these measures will result in cost savings of no less than USD10 million per year," he added.

“The service contract signed with RUSAL is in line with Freight One’s strategy to develop long-term relationships with our key customers and increase our market share in cargo transportation with large industrial groups. In parallel, we can balance the distribution and intensity of our car fleet through the Russian Railways network," commented Oleg Bukin, CEO of Freight One.

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