SIBUR value is over USD20 bln as part of the merger with TAIF

MOSCOW (MRC) -- SIBUR Holding, the largest petrochemical holding in Russia and Eastern Europe, has been valued at more than USD20 billion as part of a deal to merge the petrochemical business with TAIF, a source close to the company told Interfax.

"In the interests of the transaction, SIBUR's assessment was formed on a principle similar to that how companies are estimated for an IPO, it exceeds USD20 billion," he said.

Commenting on the possibility of a future IPO of the merged company, Interfax's interlocutor noted that "the creation of the merged company imposes objective technical limitations."

"The preparation of corporate documentation, the presence of which is mandatory in case of a decision on the initial offering, will take time after the closing of the deal. In addition, it will take time to show the market the merged company with all its advantages," he emphasized.

The SIBUR's representative emphasized that "the decision on SIBUR's IPO and possible placement dates is the prerogative of the shareholders."

The company also emphasizes that "in general, this is not a cash transaction, but the creation of a merged company."

"The list of the assets will be determined after the adoption of the relevant corporate decisions and given the approval of the regulators," SIBUR also noted.

The main petrochemical assets of TAIF are Nizhnekamskneftekhim, one of the world's largest producers of synthetic rubbers, and Kazanorgsintez, a large producer of polyethylene (PE) in the Russian Federation.

As reported earlier, SIBUR and TAIF expect their merger to increase the stability of the common business and its competitiveness in the global market. The combined company will receive a large-scale synergistic effect due to diversification of the raw material base, optimization of distribution and logistics, development of the R&D block, as well as increasing the operational efficiency of the assets.

After the completion of all investment projects underway, SIBUR will become one of the five global leaders in the production of polyolefins and rubbers after the merger. The merger of businesses will make it possible to efficiently distribute the raw material flows required for full capacity utilisation and further development of the petrochemical cluster in Tatarstan.

It was also reported that in 2020, SIBUR raised its sales of polypropylene (PP) and PE on the back of higher capacity utilization at ZapSibNeftekhim's complex. This led to an increase in the company's revenue in the olefins and polyolefins segment by 77.1% to Rb187.3 bln. This growth was mainly caused by higher PP and PE sales as a result of increased utilisation at ZapSibNeftekhim's complex and was partially offset by lower prices for these products.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 356,370 tonnes in the first two months of 2021, down by 9% year on year. Shipments of only low density polyethylene (LDPE) increased. PP deliveries to the Russian market was 246,870 tonnes in the first two months of 2021, up by 30% year on year. Shipments of propylene homopolymer (homopolymer PP) and block copolymers of propylene (PP block copolymer) increased.

SIBUR is Russia's largest vertically integrated gas processing and petrochemical company, which units a number of production sites in various regions of the Russian Federation. The company sells products to consumers in the fuel and energy complex, automotive, construction, consumer goods, chemical and other industries in more than 80 countries around the world.

PSC "TAIF" was established in 1995 and is the parent company of the group with the same name, which includes enterprises structured in four business areas: oil and gas processing, chemistry and petrochemistry (energy); investment and financial services; building; telecommunications and complex services, including trade. TAIF Group of Companies is a large Russian holding that controls 96% of the chemical, petrochemical and oil and gas processing industries in Tatarstan. The most important of its areas is the Chemical, Petrochemical and Oil and Gas Processing Divisions, which include the leading Russian polymer producers Nizhnekamskneftekhim and Kazanorgsintez.
MRC

MOSCOW (MRC) -- Russia's overall production of high density polyethylene (HDPE) totalled 505,800 tonnes in the first three months of 2021, up by 15% year on year. At the same time, only one Russian producer increased its output, according to MRC ScanPlast report.
March total HDPE production in Russia grew to 176,000 tonnes, whereas this figure was 152,500 tonnes a month earlier, three out of four producers increased their capacity utilisation. Thus, overall HDPE output in the country reached 505,800 tonnes in January-March 2021, compared to 439,400 tonnes a year earlier. Only ZapSibNeftekhim's production increased, whereas Kazanorgsintez and Gazprom neftekhim Salavat reduced their output.

The structure of polyethylene (PE) production by plants looked the following way over the stated period.
SapSibNeftekhim's March total HDPE production reached 97,200 tonnes versus 93,700 tonnes a month earlier. The Tobolsk plant's overall HDPE production exceeded 290,000 tonnes in the first three month of 2021, up by 48% year on year.

Kazanorgsintez increased its total HDPE production to 41,000 tonnes last month from 28,300 tonnes in February. Thus, overall production of this PE grade totalled 107,300 tonnes in the first quarter of 2021, down by 18% year on year.

Stavrolen's March HDPE production was 27,600 tonnes versus 24,800 tonnes a month earlier. Overall HDPE output exceeded 81,100 tonnes in January-March 2021, down by only 1% year on year.

Gazprom neftekhim Salavat's total HDPE production rose to 10,200 tonnes last month from 5,800 tonnes in February. Thus, overall production of this PE grade totalled 27,300 tonnes at the Salavat plant over the stated period, down by 9% year on year.

MRC

MOSCOW (MRC) -- Gov. John Bel Edwards and CEO Paul Schubert of Strategic Biofuels LLC announced that the company’s wholly owned subsidiary, Louisiana Green Fuels, plans to develop a renewable diesel plant near the Caldwell Parish seat of Columbia, according to Hydrocarbonprocessing.

Situated on a 171-acre site at the Port of Columbia, the plant would produce up to 32 million gallons of renewable fuel annually through established refinery processes with wood waste as the feedstock.

The company is completing feasibility and financing phases for the project in anticipation of a final investment decision by late 2022.

Through the project, Louisiana Green Fuels would make a capital investment of at least USD700 million. The company would create 76 new direct jobs, with an average annual salary of more than USD68,000, plus benefits. Louisiana Economic Development estimates the project would result in an additional 412 new indirect jobs, for a total of nearly 500 new jobs in Caldwell Parish and the surrounding region. During a 30-month building phase, the project would generate 450 construction jobs.

Strategic Biofuels has raised 85% of its early-stage financing from investors in North Louisiana. In addition to the Columbia renewable diesel refinery, the company envisions the development of additional Louisiana refineries that would target production of renewable aviation fuel, as well as diesel.

Following the final investment decision by Strategic Biofuels, construction of the initial Louisiana Green Fuels refinery in Caldwell Parish would begin at the Port of Columbia and lead to initial plant operations in early to mid-2025.

As MRC reported before, earlier this month, Worley was awarded a front-end engineering services contract by Phillips 66 to convert its San Francisco refinery in Rodeo, California, USA into a renewable fuels-manufacturing facility. The project will reconfigure the refinery and produce up to 650 million gallons per year of renewable transportation fuels from used cooking oils, fats, greases and vegetable oils.

We remind that US-based Phillips 66 remains open to developing another ethane cracker for its Chevron Phillips Chemical (CP Chem) joint venture, the refiner's CEO said in March 2018.

Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 241,030 tonnes in January 2021 versus 217,890 tonnes a year earlier. Only shipments of low density polyethylene (LDPE) and high density polyethylene (HDPE) increased. At the same time, PP shipments to the Russian market reached 141,870 tonnes in January 2021 versus 123,520 tonnes a year earlier. Supply of homopolymer PP and PP block copolymers increased.
MRC

MOSCOW (MRC) - Russia's production of polypropylene (PP) increased to about 532,700 tonne in first three months of this year, up 13% year on year, compared to the same period of 2020. All producers, with the exception of Nizhnekamskneftekhim and Ufaorgsintez, have increased their production, according to MRC's ScanPlast.

March PP production in the country exceeded 181,800 tonnes, compared with 168,100 tonnes in February. Russia's overall PP production reached 532,700 tonnes in January-March 2021, compared to 470,000 tonnes a year earlier. Five out of seven producers increased their capacity utilisation, with Stavrolen and SIBUR Tobolsk / ZapSibNeftekhim accounting for the greatest growth in the output.

The structure of PP production by plants looked the following way over the stated period.

SIBUR Tobolsk/SapSibNeftekhim raised its production in March, the plant's production was 97,300 tonnes versus 91,900 tonnes a month earlier. SIBUR Tobolsk's PP overall output reached 285,900 tonnes in the first three months of 2021, up by 27% year on year.

Poliom increased its capacity utilisation last month, and, as a result, produced about 17,800 tonnes of PP, whereas its production was 15,900 tonnes a month earlier. Overall, the Omsk plant produced 51,900 tonnes of PP over the stated period, up by 1% year on year.

Nizhnekamskneftekhim produced a little less then 18,600 tonnes of propylene polymers in March versus 17,200 tonnes a month earlier. The Nizhnekamsk plant's overall output of polymer reached 54,200 tonnes in January-March 2021, compared to 55,200 tonnes a year earlier.

Tomskneftekhim produced 13,100 tonnes of propylene polymers last month versus 12,000 tonnes a month earlier. Total PP production by the producer increased to 38,600 tonnes in January-March 2020, up 2% year on year.

Ufaorgsintez worked in March with higher capacity utilisation, the final indicator of polypropylene production amounted to about 11,400 tonnes against 9,500 tonnes a month earlier. The Ufa plant's overall output of polymer reached 32,800 tonnes in the first three months of 2021, down by 3% year on year.

Neftekhimiya (Kapotnya) produced 13,000 tonnes of PP last month, compared to 11,800 tonnes a month earlier. The producer's overall PP output reached 37,400 tonnes over the stated period, up by 1% year on year.

Stavrolen (Lukoil) produced 10,700 tonnes of propylene polymers in March versus 10,000 tonnes in February. The Budenovsk plant's overall output of propylene polymers reached 31,900 tonnes in the first three months of 2021, up by 6% year on year.

MRC

MOSCOW (MRC) - Domo Chemicals has named Bamberger Polymers an authorised distribution partner effective immediately, according to GV.

Bamberger will offer Domo’s North American product portfolio including Domamid, Econamid and Domonyl Nylon 6 and 66 compounds. For more than 50 years, Bamberger Polymers has serviced the plastics industry distributing thermoplastic resins to customers worldwide. The company offers products to injection moulders, blow moulders, compounders, extruders, and manufacturers of plastic products.

“Offering Domo workhorse nylon grades for the automotive industry, while providing custom nylon compounded solutions and speciality compounded products utilising PPS, TPU, PPA and other base resins, Bamberger is equipped with the entire Domo Engineered Materials product line at their disposal. Their open-minded approach to problem solving, combined with Domo’s custom compounding business model, results in a relationship that has provided results in a short time. I look forward to growing our relationship with Bamberger as we expand our reach together,” said Rob Schultz, General Manager, Domo Engineering Plastics US, LLC.

Domo’s Buford plant in Georgia, USA, already produces a product portfolio, that includes the integrated production of PA6 and PA66 based materials, and many special solutions based on multiple base polymers which are available exclusively for the US market, including Slique, special friction & wear modified solutions, Elastane solutions based on TPU, and high thermal and chemicals resistant solutions based on PPA and PPS base resins.

As MRC reported earlier, Domo Chemicals ceased production of biaxially oriented polyamide (BOPA) films at Leuna, Germany, closing its plant there in August 2020. The company's Domo Film Solutions (DFS) subsidiary will continue operating its BOPA and cast non-oriented polyamide (CPA) film plants at Cesano Maderno, Italy.

We remind that Russia's output of chemical products rose in February 2021 by 5.3% year on year. Thus, production of basic chemicals increased year on year by 7.5% in the first two months of 2021, according to Rosstat's data. February production of polymers in primary form was 861,000 tonnes versus 196,000 tonnes in January. Overall output of polymers in primary form totalled 1,770,000 tonnes over the stated period, up by 8.4% year on year.
MRC