Irkutsk Oil Company appointed a new CEO

MOSCOW (MRC) - Yakov Ginzburg, who served as Deputy General Director for Economics and Finance of the company, has been appointed General Director of the Irkutsk Oil Company (INK), the company said.

The corresponding decision was made at the meeting of the INC members. Marina Sedykh, who has headed the company since 2000, will continue to work on the board of directors of INK LLC and as CEO of the holding company of the INK-Capital JSC Group, which she has been managing since its inception in 2008, and will focus on implementing a sustainable development strategy INK Group of Companies, including issues of industrial safety and labor protection, ecology and social policy.

"I would like to thank my partner Marina Sedykh for her selfless work as the CEO of the company. We have traveled together a difficult path for more than 20 years, from the founding of the company to its transformation into one of the largest independent producers of hydrocarbons in Russia and the largest taxpayer in the Irkutsk region. more than once helped the company to overcome obstacles. Marina's decency and love for her native land have become INK's corporate values. We will jointly continue to work on sustainable development projects, which are now the company's development priorities, " said Nikolay Buinov, founder and chairman of the board of directors of INK.

Yakov Ginzburg was born on June 20, 1980 in Irkutsk. In 2002, he graduated with honors from the Baikal State University of Economics and Law (BSUEP) with a degree in World Economy. In 2002-2005, he completed postgraduate studies and taught at the Department of World Economy at BSUEP. In 2005 he defended his thesis for the degree of candidate of economic sciences on the topic "Patterns and strategy of small business development in the region."

In April 2019, the Irkutsk Oil Company signed an agreement with Univation Technologies (USA) to use the UNIPOL polyethylene production technology. INK is implementing a gas utilization project with Honeywell UOP, within the framework of which gas is separated into fractions for further monetization through the construction of a plant for the production of HDPE and LLDPE with a capacity of 650,000 tonnes/year.

In June, the Irkutsk Polymer Plant (IZP, part of the Irkutsk Oil Company) began assembling large-sized equipment. The first of 45 units of large-sized heavy-weight equipment was assembled - a hardening water column of a complex pyrolysis unit with a height of 54.6 meters and a weight of 271.5 tons. The construction of a polymer plant is being carried out by the Irkutsk Oil Company in Ust-Kut as part of the creation of a gas chemical cluster, including facilities for the production, treatment, transportation and processing of gas.

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 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.

Irkutsk Oil Company is one of the largest independent producers of hydrocarbons in Russia. The company was founded in 2000. The main beneficiaries are Nikolay Buinov, Chairman of the Board of Directors of INK, and Marina Sedykh, a member of the Board of Directors. The group of companies conducts geological exploration, exploration and development of 51 subsoil plots in the Irkutsk Region, Krasnoyarsk Territory and the Republic of Sakha (Yakutia). INK's largest investment project is a gas chemical cluster, which includes facilities for the extraction, treatment, transportation and processing of gas, a helium plant and the Irkutsk polymer plant. The Group of Companies employs 10 thousand people.

MRC

MOSCOW (MRC) -- US monoethylene glycol (MEG) exports in the first four months of 2021 were nearly 21.5% lower than the year-ago period, reflecting sharply lower export volume availability in the aftermath of widespread production shutdowns amid a deep freeze that hit the US Gulf Coast in February, according to S&P Global with reference to the latest US International Trade Commission data, released June 9.

The US shipped out 585,485 mt of MEG in the January-April period of 2021, down from 745,467 mt in the year-ago period.

More than 4 million mt/year of total 4.65 million mt/year of US MEG capacity shut down when sustained subfreezing temperatures hit the US Gulf Coast and much of the US in mid-February.

Shutdowns lasted for weeks as producers awaited upstream ethylene cracker restarts, which were slow because producers had to run material through miles of exposed pipes to find and fix cracks and leaks caused by the extreme cold.

China, the world's largest MEG consumer for its polyester industry, was the top recipient of US MEG outflows in the January-April period, having received 143,391 mt, or 24.5% of the total.

Mexico was second at 128,028 mt, or 21.8% of the total, followed by Turkey at 107,491 mt, or 18.3% of the total.

Belgium was the fourth-highest recipient at 72,654 mt, or 12% of the total. But European destinations could decline in the coming months as the European Union aims to impose provisional antidumping duties on US- and Saudi Arabia-origin MEG imports in June, market sources said.

MEG is used to make antifreeze and also is a feedstock for polyethylene terephthalate, which is used to make plastic bottles and polyester fiber.

As MRC wrote previousky, Lotte Chemical USA, a joint venture (40:60) of the Malaysian company Lotte Chemical Titan and its parent company Lotte Chemical Corporation, has declared force majeure (FM) on monoethylene glycol (MEG) and other products produced at its Louisiana complex after an electrical equipment failure, according to a customer letter seen by S&P Global on May 27. The letter said the company prepared for heavy storms that hit Lake Charles and other areas along the Texas and Louisiana coasts the week of May 17, but on May 21, "critical electrical equipment" failed and prompted an unexpected plant shutdown. Thus, the FM was declared on May 22.

According to MRC's ScanPlast report, Russia's estimated PET consumption grew to 263,660 tonnes in the first four months in 2021, up by 13% year of year. Bottle grade PET accounted for 78.3% of the increase in consumption due to the virtual absence of exports and higher imports.
MRC

MOSCOW (MRC) -- Chemical railcar traffic in North America increased 5.4% year over year (YOY) during the week ended 26 June on gains in the US and Mexico, according to data released on 24 June by the Association of American Railroads (AAR).

Volume totaled 44,238 carloads, down 3.5% from the previous week, according to data released on 30 June by the Association of American Railroads (AAR).

On a four-week basis, volume increased 13.7% from 2020 and 0.6% from 2019 (chart). For the year to date, chemical railcar traffic in North America as up 4.6% from 2020 and down 0.1% from 2019.

Chemical railcar traffic in the United States contributed 31,624 carloads to the total, up 7.8% YOY and down 2.4% from the previous week. For the year to date, US chemical railcar traffic was up 5.3%.

Canadian chemical rail traffic totaled 11,853 carloads, down 0.5% YOY and down 6.6% from the previous week. For the year to date, Canadian chemical railcar traffic was up 3.7%.

Chemical railcar traffic in Mexico totaled 761 carloads, a YOY increase of 2.6% and a sequential increase of 2.4%. For the year to date, Mexican chemical railcar traffic was down 8.7%.

As MRC reported earelier, the shale gas advantage of North American petrochemical majors provides a boost for investments in the region, primarily in the US. However, the oil price crash narrowed this advantage and is likely to affect profitability. North American petrochemical majors that strive to pace investments efficiently, in line with market trends, will boost their competitiveness and seize further opportunities for growth over the long-term, said GlobalData, a leading data and analytics company, in March 2021.

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 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased. At the same time, PP deliveries to the Russian market were 523,900 tonnes in January-April 2021, up by 55% year on year. Supply of homopolymer PP and PP block copolymers increased, whereas shipments of PP random copolymers decreased.
MRC

MOSCOW (MRC) - The Polymer Group-Kaluga company will build a plant for the production of polyethylene agro-stretch films, covering films and bags at the Lyudinovo site of the Kaluga SEZ, the company said.

The volume of investments in the project will amount to Rb180 mln. 111 new jobs will be created. The commissioning of the facility is scheduled for the end of 2022, the Agency for Regional Development of the Kaluga Region reported.

According to the company, the volume of the created production will cover up to 3% of the market for agricultural film produced in Russia. The project takes into account the requests of partner companies, and its implementation will fully cover their needs in this product segment.

The approval of the application for obtaining the status of residents of the special economic zone "Kaluga" was adopted on June 22 at a meeting of the expert council chaired by the Deputy Governor of the Kaluga Region Vladimir Popov. The total investment in the two projects will amount to more than Rb570 mln.

Earlier it was reported that BASF and the Fabbri group of companies have developed a biodegradable film for food packaging. Based on ecovio, a certified biodegradable material from BASF, the Fabbri Group produces Nature Fresh, a highly transparent stretch film. This product is the first certified biodegradable film for foodstuffs, combining optimal breathability, long shelf life, high transparency and excellent mechanical properties for automatic packaging.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 744,130 tonnes in the first four month of 2021, up by 4% year on year. Shipments of all PE grades increased.

SEZ "Kaluga" consists of two sites located in different parts of the region - in Lyudinovsky and Borovsky districts, where all the regional advantages regarding access to engineering, transport and business infrastructure, as well as federal tax incentives and customs preferences apply.
MRC

MOSCOW (MRC) - The net profit of Kazanorgsintez (KOS, part of the TAIF group) in the first quarter grew 3.2 times to Rb6.2 bn, BUSINESS Online reports.

Kazanorgsintez's revenue in the first quarter of 2021 increased by 49% to Rb24.2 bn, follows from the company's quarterly report. This result became a record for the first quarter, leaving behind the previous maximum of Rb20.1 bn, recorded in 2016.

The company's financial performance is expected to exceed 2020 and 2019 results this year. In their opinion, the market situation favors the largest producer of low-density polyethylene.

As for the key driver, the situation on the plastics market, it really worked out well for KOS. Thus, the average value of the PPI-ST index, which reflects prices for large-capacity plastics, increased by 1.5 times: from 87 thousand rubles per ton in January-March 2020 to Rb130,000 per tonne in January-March 2021. At the same time, sales profit increased 4.2 times to almost Rb8 bn.

The contribution of Kazanorgsintez's production to the growth of its revenue was small. Despite the increase in receipts for all main products from the KOS line, their dynamics were uneven. Thus, the highest growth was shown by polycarbonates - proceeds from their sale doubled to almost 5 billion rubles. Revenue became a record for the direction, leaving Rb3.3 bn behind the sample in January - March 2018. Unlike other products, polycarbonates showed an increase in 2020, by 11% to Rb8.8 bn.

Further, revenue from the sale of high-density polyethylene (LDPE) increased by 71% to Rb6 bn. Revenues from the product that brings the most revenue to KOS, low-density polyethylene (HDPE), increased by 26% to Rb10 bn.

Earlier it was reported that Kazanorgsintez plans to reconstruct reactor B at the plant for the production and processing of low-density polyethylene (HDPE).

As it became known earlier, the largest petrochemical holdings of Russia - SIBUR and TAIF - in April announced plans to combine their assets. Within the framework of the merger, a company will be created on the basis of SIBUR Holding, in which the current shareholders of TAIF PSC will receive a 15% stake in exchange for the transfer of a controlling stake in a group consisting of petrochemical and energy enterprises. The remaining stake in TAIF can be subsequently purchased by the merged company.

It was also noted that the combined company of SIBUR and TAIF will include the parent company of the Tatarstan group, its two chemical plants and an energy company. On the part of TAIF, the following companies will join the merged company: TGK-16 JSC, Kazanorgsintez PJSC, Nizhnekamskneftekhim PJSC and TAIF JSC. The oil complex of TAIF-NK PSC is not included in the deal with SIBUR. The merger of SIBUR and TAIF will not affect the position of Kazanorgsintez (KOS); TAIF will remain its shareholder.

According to the ScanPlast report of MRC, Kazanorgsintez’s total HDPE production grew to 38,600 tonnes last month from 29,000 tonnes in April, with the increase in the output due to weaker linear low-density polyethylene (LLDPE) production.

Kazanorgsintez PJSC is one of the largest enterprises in the Russian Federation (TAIF Group of Companies). It produces 40% of all Russian polyethylene and is its largest exporter. Currently, PE, polycarbonate (PC), polyethylene pipes, phenol, acetone, bisphenol A are produced. KOS is the only Russian PC manufacturer. There are 170 types of products in total. The annual production volume is 1.6 mln tonnes. The enterprise is the largest Russian manufacturer of low-pressure polyethylene (HDPE) pipes. The annual capacity of HDPE production is 540,000 tonnes, and LDPE - 225,000 tonnes.
MRC