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Merger of TAIF and SIBUR will allow to grow a company of international level and global scale - Dmitry Konov

July 22/2021

MOSCOW (MRC) - The merger of assets of SIBUR and TAIF will make it possible to enter the five largest companies in the world, said Dmitry Konov, Chairman of the Board of SIBUR Holding PJSC in an interview with Realnoe Vremya.

On April 23, the companies signed their intentions to conduct the deal. Shortly before that - on April 11 - the basic conditions were signed. And before that, for about half a year, TAIF and SIBUR worked in the mode of very frequent meetings and discussions of these basic conditions.

One of the key terms of the deal: implementation of TAIF investment projects. The adopted large-scale development plan of TAIF Group for the period 2015-2030, has 36 projects and is estimated at more than 2.2 trillion rubles, of which 1.5 trillion rubles fall within the perimeter of the transaction of the merged companies SIBUR and TAIF.

"The duty of SIBUR, as a member of the merged company, is to continue the projects, the implementation of which is already underway. We are clearly interested in the s of their implementation being completed and the production facilities being commissioned. Moreover, I think that implementation of these projects is one of the strong growth opportunities for the merged company ", D. Konov notes.

"The second part of SIBUR"s responsibilities is to provide the missing financing for the implementation of investment projects of TAIF, which remains an independent legal entity within the framework of the transaction. As for investment projects that have not yet started, we also plan them. But since they need to start only after a few years, together we will check how much the market will change by that time, whether there are any raw material contracts, if raw materials are to be supplied by third parties, we will update the capital cost estimate, "he said.

It is necessary to discuss each of them in more detail with the leadership of TAIF, to make sure that they fully meet the criteria we jointly defined. And, if they are convinced of the feasibility and economic efficiency of the project, they will implement it. It is quite possible that given the fact that the merged company has more opportunities, they can be implemented in a shorter time frame.

SIBUR"s interest is in joint efforts with TAIF to grow a petrochemical company of an international level and a global scale. Those products that will be produced at the jointly created facilities are a powerful tool for strengthening these positions. We are not yet discussing the expansion of the joint investment program.

For both of our companies, a fairly large synergy lies in improving efficiency. This is both a more efficient distribution of semi-products and raw material streams, and an optimal organization of production processes. For example, to provide the market with the necessary products.

There are a lot of such operational things that allow you to optimize processes. This applies to raw materials, and the distribution of semi-finished products, and the organization of the technological process, and production planning, and the organization of logistics in order to better provide customers with the necessary products. There are many synergies.

"There is also another synergy that is little talked about, but which is quite close to me. TAIF and I have different types of production sites. Nizhnekamsk site is quite closely integrated with oil refining. ZapSibNeftekhim is the entire Tobolsk cluster, which is more focused for light raw materials and is represented by larger installations. And there are products that we, as SIBUR, for example, can and would like to enter and start their production, but with much greater efficiency they can be produced at the TAIF site. that the production facilities have different raw materials and different infrastructure sites.The range of products that can be made on the basis of oil refining is wider than the potential range of chemistry based on gas processing. Such a correct, optimal distribution, including future projects, between a large set of production sites within the perimeter of one companies are also synergy. I am talking about the possibility of realizing more her effective projects in the right place and conditions for them. This is another of the important reasons why we are interested in TAIF"s investment plan. "

Earlier it was reported that the Federal Antimonopoly Service (FAS) satisfied the petition of SIBUR, the largest petrochemical holding in Russia and Eastern Europe, to acquire 100% of the voting shares of TAIF holding.

Ethylene and propylene are the main feedstocks for the production of polyethylene (PE) and polypropylene (PP), respectively.

According to MRC"s ScanPlast report, Russia"s estimated PE consumption totalled 953,400 tonnes in the first five months of 2021, which virtually corresponded to the same figure a year earlier. High denisty polyethylene (HDPE) shipments decreased. At the same time, PP shipments to the Russian market were 607,8900 tonnes in January-May 2021, up by 33% year on year. Shipments of homopolymer PP and PP block copolymers increased, whereas deliveries of PP random copolymers decreased.


mrcplast.com
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, neftegaz, petrochemistry, Sibur Holding.
Category:General News
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