MOSCOW (MRC) -- Russian petrochemicals giant SIBUR has recovered from the initial shock of the pandemic and is increasing its exports, mainly to Europe, thanks to surging demand for medical equipment, a senior executive told Reuters.
SIBUR, the largest petrochemicals producer in eastern Europe, is ramping up production following construction of the ZapSibNefteKhim plant in the Western Siberian city of Tobolsk and a merger with TAIF, yet to be completed.
Sergey Komyshan, executive director of SIBUR, told Reuters in comments cleared for publication on Wednesday that the company expects the ZapSib plant to produce two million tonnes of polymers, mostly polyethylene and polypropylene, this year.
The plant was launched in 2019 with annual capacity of 2.5 million tonnes of polymers. According to Komyshan, demand for petrochemicals has recovered after being hit by the pandemic.
"In the beginning, the medical sector helped a lot, (demand) for medical protective gear and packaging. They offset the losses in the areas such as carmaking and construction," he said, adding demand in the auto sector and construction was now back, too. "We saw a very robust growth, we have practically returned to normality."
The demand recovery means SIBUR is boosting its petrochemical exports to Europe. "We have more than doubled our supplies there, year on year, and we will continue to do so," Komyshan said, adding the bulk had gone to eastern Europe, Germany, France, Belgium, the Netherlands and Luxembourg.
"The most pronounced rise is in Turkey where we became the second player on the propylene market," he said, without providing details. Last year, SIBUR exported 1.44 million tonnes of polyethylene and polypropylene, up from 400,553 tonnes in 2019, thanks to the ZapSib plant.
Privately-owned SIBUR has a deal to sell up to one million tonnes of polyethylene a year to China's Sinopec from ZapSib.
As MRC reported, on 23 April of this year, SIBUR announced a merger with TAIF by exchanging 15% of its shares for 50% + 1 share in TAIF. The scope of the transaction includes only TAIF's petrochemical and generating companies. This merger will increase the scale of SIBUR's operations and strengthen its market leadership. SIBUR and TAIF expect to reach final terms and close the deal in the second half of 2021. TAIF together with SIBUR will spend more than 1 trillion rubles. for the implementation of joint projects. In total, the companies plan to implement over 30 projects.
As a result of the merger, the total capacity share of the new SIBUR-TAIF group will be 100% for the production of linear low-density polyethylene (LLDPE), 87.4% for polypropylene (PP), 80.8% for low-density polyethylene (HDPE), and for high-pressure polyethylene (LDPE) - 59.3%.
According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,176,860 tonnes in the first half of 2021, up by 5% year on year. Shipments of exclusively low density polyethylene (LDPE) decreased. At the same time, PP shipments to the Russian market were 727,160 tonnes in the first six months of 2021, up by 31% year on year. Supply of homopolymer PP and block-copolymers of propylene (PP block copolymers) increased. Supply of statistical copolymers of propylene (PP random copolymers) subsided.
SIBUR manufactures and sells petrochemical products on the Russian and international markets in two business segments: olefins and polyolefins (polypropylene, polyethylene, BOPP, etc.), as well as plastics, elastomers and intermediate products (synthetic rubbers, expanded polystyrene, PET, etc.)
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