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

117218, Moscow, Krzhizhanovsky st., 16/1

Chinaplas exclusive: PIE speaks to SIBUR’s Managing Director – Head of Basic Polymers Division Sergey Komyshan

PIE: Will you be taking additional steps this year in your plans to focus on key production assets? What geographic locations do you plan to focus investment on?

Komyshan: We have a variety of assets and are constantly evaluating their current and expected future performance, taking into account the existing market conditions. Our strategy is mostly focused on selling or building, we do not tend to buy. If I had to sum up our philosophy it would be that if we see a potential for development, we will channel our investment in that particular direction. Key issues we look out for in this regard are synergies in terms of both production and
infrastructure, as well as access to competitively priced feedstock, either within the complex itself or relatively nearby. This means that we focus our attention on a limited number of sites, but they tend to become integrated, allowing for more efficient production.

All that being said, our main focus is on the Russian and CIS markets, where consumption of certain polymers is growing much faster than the overall economy. Projects recently launched by SIBUR or that are coming on stream soon will, we believe, unlock our potential to substitute both PP and PVC imports into Russia. One of these projects is our 500,000 t/y Tobolsk Polymer PP plant, which came on stream last year. This year, together with Belgium’s Solvin, we plan to launch RusVinyl, a joint venture that will turn out 330,000 t/y of PVC.

Were also contemplating a few investments abroad, including a butyl rubber joint venture with Reliance in India as well as a synthetic rubber jvs with China’s Sinopec, one of which is already established in Russia while another,  proposed to be in China, is under discussion. When it comes to activities beyond Russia, however, you could say that we are cherry picking our projects, which are few in number.

PIE: You just started up a 500,000 t/y PP plant at Tobolsk-Polymer. How much output is headed to export? Which countries specifically? What are your expansion plans in Tobolsk – both for PP and PE?

Komyshan: The key rationale behind the Tobolsk project is to close the gap between demand and production, that is to say, to meet local demand. That includes Russia and the CIS. Whatever material is left will be exported, with a focus on Western Europe, Turkey and China. This year the propylene produced in Tobolsk was certified as compliant with REACH, paving the way for PP exports to Europe.

We see great growth potential for basic polymers produced in Tobolsk. In addition, we expect to get an investment
decision on our ZapSibNeftekhim project in the near future. If all goes as we see it today, the complex will be one of the largest integrated ones of its kind in the world, capable of producing 1.5m t/y of ethylene, with capacities for  1.5m t/y of downstream PE as well as 500,000 t/y of PP. In the case of PE, we plan to install an 800,000 t/y HDPE/LLDPE swing unit, in addition to a 700,000 t/y HDPE facility.

Another one of our current projects is the expansion and upgrade of Tomskneftekhim. As part of that, we intend to raise LDPE output from 245,000 t/y to 270,000 t/y, while PP production will increase from 130,000 t/y to 140,000 t/y. As part of the upgrade, we will extend not only the grades produced, but also raise output of low-MFI grade PP homopolymer and random PP copolymers. Moreover, we will be introducing a range of new LDPE grades. 

PIE: How are the works on ZapSibNeftekhim progressing? Do you still plan to commission all lines in 2017?

Komyshan: The project is currently at the FEED stage and we are still looking into its feasibility. No decision has been made yet, although we expect to come to an agreement on the project in H1 this year. We have in fact commenced potential contract negotiations. If the project receives the go-ahead from our shareholders, then all planned capacities should be constructed within 4-5 years following the final ok.

I should mention that once such a large complex is brought on stream, a lot of its output will be headed towards our export channels.

PIE: Has the current political upheaval surrounding Ukraine affected your operations? Is there a negative fallback for SIBUR? 

Komyshan: I will comment on this question as far as the transit of our goods through Ukraine is concerned and in terms of the impact on sales to Ukraine. So far, we have not experienced any problems in terms of transit, although we are aware of the potential risks and take steps to mitigate them. Ukraine accounts for only a minor share – roughly 2% - of SIBUR’s total revenues, so it is a relatively less important market for Sibur.

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