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Sibur calls on Russian government for import protection

February 02/2009

Faced with the global economic crisis, the leading Russian petrochemicals group Sibur Holding has urged the federal government to increase Russia"s polymer import duties.

The Moscow-based plastics producer had also appealed for financial aid to help it complete several major investment projects, including a ?650 million joint venture scheme with Solvay for a PVC plant.

The RusVinyl PVC facility in Kstovo was set to launch in 2010 but this target has been put back to 2012 due to the world economic crisis. The current plan foresees the plant will have a 300,000tpa suspension PVC capacity and a 30,000tpa emulsion PVC capacity.

Other projects seeking assistance include Sibur"s planned 500,000tpa polypropylene production unit and its supporting propylene plant, in Tobolsk, due on stream in 2011.

Sibur presented its case for state assistance for the petrochemicals sector at a meeting of the chemical and pharmaceutical industries working group of the Russian Industry and Trade Ministry, 23 January.

RusVinyl is jointly owned 50:50 by Sibur and Brussels-based Solvay"s vinyls shared venture with BASF, SolVin. The project will result in Russia"s first fully-integrated world-scale vinyls facility.

In late October, at the onset of the economic crisis, Sibur warned that it was reviewing its strategy and setting new priorities "in the current turbulent trading and financial environment". It made clear it would aim to reduce costs and optimise its business processes.

"Sibur is well placed to trade through the current challenging trading and financial environment," its president Dmitry Konov said at the time. “We will continue to implement our development strategy, by investing in new projects, but these will also be contingent on improvements in the economic situation and government support.”

He added that Sibur continues to be positive about the longer term prospects for the Russian petrochemical industry.

The Russian Government has already introduced temporary import duties of up to 10% on polycarbonate polymers. The measure will remain in force for a period of nine months and will cover contracts signed since 17 October 2008.

Meanwhile, Russian polyethylene imports jumped to record levels last October, but imports of PVC and PVC compounds in November were down 28,000 tonnes, or 31%, compared with the October figure, according to the Unipack news service
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