OREANDA-NEWS  On 01 December was announced, that Oleg Deripaska warned that the world economy faces "a crisis of overproduction" and called on companies to reduce production to actual levels of demand to maintain profitability and weather the global economic downturn.

Mr Deripaska, Chairman of the Supervisory Board of Basic Element, made the comments following the meeting of APEC Leaders in Lima, Peru, where he accompanied Russian President Dmitry Medvedev and led the Russian delegation to the APEC Business Advisory Council, alongside Gazprom's Alexander Medvedev and Andrei Kostin of VTB bank.

Mr Deripaska told journalists that the world economy faced a crisis of overproduction and called on companies to implement a temporary reduction of production capacity until existing stock was used up and consumer demand restored. "Today we have a huge stock of exchange goods, which are still being produced, because you can't shut the production capacity at once ... And until the world uses up the stock, there won't be a phase of growth in the real economy" Kommersant newspaper quoted Mr Deripaska as saying. "Now it's important to come through the period before the supply meets the demand", Mr Deripaska said, adding that "In March-April we'll touch the bottom and we'll have a clear understanding of the demand and supply proportions".

Mr Deripaska told journalists that his own company, Basic Element, was implementing an anti-crisis strategy aimed at decreasing production to actual levels of market demand, further cutting of costs, increasing corporate efficiency and keeping a reasonable level of profitability. "We're re-considering our investment programs for the next year, and all our projects", he said, adding "We'll see: some projects are repaid in a year, other will be substituted".

He also warned that many Russian companies, including those from the "real" sector of economy, "are still living in vain hopes" and "instead of decreasing ineffective capacity, they are trying to keep it on the same level". Mr Deripaska also called on producers to reduce product costs that had remained high despite the downturn, stating "We must think about customers today, they are waiting for new prices from us".

Mr Deripaska, however, remained optimistic about the outlook for Russia, arguing that the current economic situation was "a unique chance for the country to build new houses for homeless, new bridges, roads and tunnels". In an interview with Bloomberg, he suggested that Russia was in a better position than more developed countries in Europe and the U.S. where cheap loans were vital to generating demand. Russian consumers will "wake up from the global shock'' faster than Western consumers, he said. But he warned that Russians would have to play their part in "helping the state to use resources in a more efficient way", stating "Our task is waste reduction".