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«SIBUR» LLC is the managing organization of PJSC «SIBUR Holding».

117218, Moscow, Krzhizhanovsky st., 16/1

Darya Borisova, SIBUR’s R&D function: “It's time for informed and manageable risks”

SIBUR’s Management Board member speaks on unexpected findings in Tatarstan and the impact of sanctions.

“The number of pilot releases, which used to be counted in dozens, reached several hundred last year,” says Darya Borisova, member of SIBUR’s Management Board and Head of the Joint Department of Development and R&D. Disruptions in the foreign supply chain provided impetus for the holding company to accelerate the development and deployment of proprietary innovation. SIBUR is bringing new life to its old formulations.

– Please tell us how innovation is fostered and managed at SIBUR? What objectives do you want to achieve as head of Development and R&D?

– SIBUR has three R&D priorities. First, we aim to improve the operational and technological efficiency of our facilities. Second, we want to develop new brands, new applications, and bring new solutions to the market in which we actively operate. And third, we are seeking to make new products and technologies that are powered by innovation.

Let me start with the first – improving the operational and technological efficiency of our existing facilities. Each facility has its own programmes in place aimed at continuous improvement. This is one of SIBUR's core values. And R&D makes an important contribution to achieving this priority. For example, we use more effective speciality chemical components and additives, process and improve feedstock and by-products, streamline process operations, and upgrade hardware. This helps us increase output, save energy and costs.

Last year, we focused on finding alternative components and materials to replace those no longer available as a result of sanctions or self-imposed restrictions in the private sector. What we were after was to ensure stable and continuous operation of our facilities to prevent shutdowns, quality deterioration and output decrease when a component is replaced – all this without damaging the efficiency. Thanks to the joint efforts of our teams from Production, R&D and Procurement, we were able to retain stability throughout the chain, keep the processes working and replace hundreds of components, which would have been unthinkable in previous years. The number of pilot releases, which used to be counted in dozens, reached several hundred last year.

– How did you make it happen?

– I can’t say we did it from scratch. We had a database of equivalents and alternatives. This is part of our risk management approach. It was not that we knew what exactly was going to happen. Rather, we had to ask ourselves: “What if supplies are disrupted? What are our plans A, B and C?” In the current environment, there has been a change in the pace of decision-making and risk appetite. When you have an alternative that works, you tend to say to yourself: “Well, there is no rush, there is enough time to prepare and analyse the risks.” But if it is the continuity of supply for our customers that is at stake... The pace of decision-making is somewhat different. It's time for informed and manageable risks. We have come a long way thanks to the joint efforts of our different functions. The success of our pilot runs and initiatives to shift to alternatives exceeded our expectations. We are proud of the work we have done. Our feedstock suppliers were not affected, we did not suspend production, and our customers got the products they had ordered.

– How much does the holding company invest in R&D annually? Are you ramping up the spending?

– Our investments in R&D have traditionally been at levels comparable to those of benchmark companies. Now that we are placing a greater focus on our own R&D projects, our investment in this area has more than doubled from, say, 2021.

– Tell us more about products you created from scratch.

– Last year, we developed five proprietary technologies relating to fine chemicals we need specifically for our processes. Four out of five products have already been rolled out at our own plants or our partners’ facilities.

– Can you give us a sneak peek into how these developments come to life?

– Each product has its own story behind it. Here is an example from Nizhnekamsk. There is a catalyst called zirconium tetraisobutyrate, which is used in the production of normal alpha-olefins (a component of polymers, detergents and cosmetics – Ed.). The number of companies selling this catalyst is very limited, with all of them being from unfriendly countries. The lack of a few dozens of tonnes of this catalyst could result in a ripple effect to the production of tens of thousands of tonnes of normal alpha-olefins. It turned out however that the R&D Centre of Nizhnekamskneftekhim had the lab formula of this catalyst. Yet, to move from the lab to the real world, you have to go through numerous steps . Just because you have something in the lab doesn't mean you can build an efficient production and business.

Our colleagues from NIOST, Tomsk, (SIBUR's corporate R&D centre – Ed.) agreed to take up this development as they had the infrastructure and the capacity to scale it. It took us a few months to roll out the technology, and in just six months we were able to launch mass production of the catalyst and supply it to Nizhenkamskneftekhim. By producing this substance, we make it possible for our customers to have access to a range of polyethylene grades they need.

– Do you mean to say that the formula has been gathering dust for all these years in Nizhnekamsk?

– Exactly. The process is as follows: first, we analyse if we are capable of making this kind of substance and if this is something we can use in the future. The management decides whether commercialisation of this product makes sense under current conditions. There was no need in the product until last year because there were stable supplies and long-term contracts with foreign partners. Though produced in limited quantities, such products require considerable efforts and resources in terms of scaling up and setting up production.

– Are there any other ideas that you have saved for the rainy day?

– This is all a two-way street. We see if there is a need in the market and then we look if there is something we can come up with. The second example of our proprietary developments is butyllithium. We are considering its commercialisation but the decision has not yet been made. Butyllithium is an essential component for manufacturing rubbers and elastomers. It is used in production processes at Nizhnekamskneftekhim and Voronezhsintezkauchuk. We studied this special component a while ago, developed our own technology but then decided that the project was infeasible [at the time] because we had steady supplies from our foreign partners. Now that our supply chains have changed, not only have we brought it to life, we have made some important tweaks to it and made it even better than that of our rivals. Butylithium increases the resistance of rubber to abrasion, makes it more flexible and enhances its ability to regain its original shape. We have scaled up the development at that very NIOST I have mentioned, and it is now ready for commercialisation. We have not decided yet where to implement it, as we are working on the design and fine tuning it. The Company will take into account both the evolving risk profile and the geography of supplies.

– Do you use this component for your own needs only?

– The zirconium tetraisobutyrate I have mentioned is a very specific catalyst, it is used only in one process, while butylithium can be used in the organic synthesis of pharmaceutical ingredients, agricultural chemicals, and certain electronic components.

– But not yet, right?

– We buy it from external sources to make production run. Just like other manufacturers who buy it in the market. Obviously, a Russian-made product will have certain technological advantages, and what's more important, the supply chain will be more reliable and efficient.

– Do you have plans to localise it in Tatarstan?

– We are currently discussing the optimal location; the product is fed to Voronezhsintezkauchuk in larger quantities, which could be a reason for its localisation on our Voronezh site. In Tatarstan, Nizhnekamskeftekhim is actively building a facility to produce hexene, a product that is also based on our proprietary technology. Ethylene from the EP-600 project, which is now under construction, will be used as feedstock.

– What is SIBUR's value proposition for its customers in terms of innovation?

– 50 to 60% of our R&D involves working with our clients on new grades and new applications. We are carrying out about 40 projects at a time across the product chain. Last year, we launched production of new polyethylene grades for large-diameter pipes, which were not previously available in the Russian market, they were all imported. We developed five new brands in flexible packaging, localised polymer solutions for the automotive industry (polymer fuel tanks, polypropylene foam for noise and vibration insulation). These are products which were not previously available in the Russian market. Our companies had to import either these materials or finished parts made from them.

We certainly cannot develop any of these products fully independently. That is why we are closely cooperating with the customers who are going to use this feedstock in their processes.

– What is the role of your Tatarstan facilities in all this?

– Nizhnekamskneftekhim’s R&D centre develops rubbers and elastomers, fine chemicals and polystyrene plastics, while the R&D centre of Kazanorgsintez is focused on polycarbonates. When it comes to rubbers and elastomers, the leaders are enterprises and R&D centres in Tatarstan. Nizhnekamsk is at the heart of Russia’s rubber business. We have developed and are now launching a light grade of rubber in the market. It is used in toy and medical industries with high requirements for cleanliness and appearance. This is a new product in the market. We are now homologating (i.e. pilot testing) this product with our clients.

Many of our developments are focused on improving rubber quality for the tyre industry, with our R&D centres in Nizhnekamsk and Voronezh joining their efforts. These include, for example, the rolling loss index – the less energy is expended, the lower the fuel consumption and CO2 emissions will be. One of the main trends in the tyre industry is the reduction of friction losses. Another property we are working on is tyre grip. Each new generation of tyre is better than the previous one, to a great extent, thanks to the product line offered by rubber manufacturers. We work together with tyre companies to make tyres better for the end user. Now, in the new environment and after tyre majors have left Russia, this has become ever more relevant. Our ability to offer this kind of product helps Russian tyre companies ensure their process continuity because, just like us, they have no access to foreign supplies.

In addition, there are niche chemicals, such as antistatic agent for the polymer production. The agent was developed by Nizhnekamskneftekhim’s R&D centre to replace its previously imported counterpart. The piloting is underway at our largest production facility, ZapSibNeftekhim.

I will give an example, which I particularly like, from a completely different field – environmental protection. The R&D centre in Nizhnekamsk has a proven track record in biological wastewater treatment. The centre developed a technology based on new strains of special bacteria, which helped our production facility in Perm to make its treatment facilities more eco-friendly.

– Are there any other pain points about fine chemicals?

– The development is gradual. The environment changes, we cover some needs, but some new issues arise. In 2022, we developed a programme to localise the key components we need to ensure stable production. There are now more than 30 components in the field of fine and speciality chemicals that we believe would be appropriate to localise in Russia to increase technological independence and secure supplies for the petrochemical industry. We consistently work to implement this programme. Some of the products can be localised by us and some by our partners. We have no intention to localise everything by ourselves.

– Are there any particular projects on your mind?

– Catalysis is very important to us. It is the backbone of our competitiveness. Kazanorgsintez has a small production facility for catalysts. In 2022, we have not only developed one of the catalysts for polyethylene production but also scaled it up and piloted. This catalyst is used by Kazanorgsintez and has proven to be much more cost-effective than previously used imported catalysts. But there are areas where our partners have greater synergies and competencies, which is why we offer them the opportunity to manufacture certain products on their own sites.


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