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  ExpertVolga Magazine, Vadim Ponomarev  

Managed to Keep Head Above Water


One of the biggest domestic petrochemical plants – “Nizhnekamskneftekhim” (NKNH, Tatarstan, under control of a Republican group “TAIF”) reached pre-crisis production output volume this winter. In the first quarter of 2009 production volume at the enterprise dropped three times. “But due to implementation of the antirecessionary measures program since the second quarter of 2009 a tendency to recovery appeared, and in the third and the forth quarters pre-crisis production volumes were achieved”, General Director of NKNH Vladimir Busygin stated at the company’s Annual Meeting of Shareholders.   
In general, in the last year NKNH sold production to the amount of RUB 60 billion, that is 15% less comparing with 2008. Gross profit declined from RUB 13.1 billion to RUB 8.3 billion, and net profit – from RUB 1.76 billion to RUB 424 million. These figures might have been even worse if there were no energy saving program, which enabled the chemical enterprise to save RUB 1.5 billion on heat and energy consumption and due to this the company managed to fully block growth in energy tariffs.  “The fact that the enterprise, especially in view of such an unfortunate first quarter, ended the year with no loss is a very serious result. Certainly, we lost in money, but this is the market’s fault. We fulfilled the main tasks, and this is the result of a serious work done by the team”, the President of Tatarstan Rustam Minnikhanov told regarding this issue.  
He stressed that in March the third program of the development of oil and petrochemical complex of the Republic was adopted where NKNH is a centerpiece. “The tasks set today - they are quite complicated. This is why if we don’t have a competitive product with adequate value we can get lost in the market”, the president of Tatarstan addressed the shareholders of NKNH.  
According to the plans of the republic’s government, the production of synthetic rubber must double – up to 800 thousand tons per year - at NKNH till 2014. “We see this is a promising direction for development and, most importantly, the history has shown that all the global companies such as Michelin, Pirelli, Goodyear, and Continental develop along with us and re-equip their plants not only in Europe but also in Japan and the USA to adjust them to our rubber. This direction is infallible and will bring a good profit,” Vladimir Busygin noted. During the current year the enterprise plans to start reconstruction of an alpha-olefin production plant producing desired cut for polyethylene production. Launch of ABS resin production is planned with a capacity up to 70 thousand tons per year that, according to the company’s top-management, “isn’t produced in Russia at the modern level”. Also it is planned to increase production of polystyrenes due to  polystyrene foam.
Simultaneously the company is intended to expand its raw material base. Thus, a reconstruction of a Central Gas Fractioning Unit is planned with increase of processing up to over 2 million tons of wide light hydrocarbon fractions and commercial butane. These plans will cost RUB 22 billion in the next three years.   
Today the General Director of TAIF Group Albert Shigabutdinov noted that “the resources owned by the Group are enough for implementation of the NKNH program”, having specified simultaneously that cooperation with financial institutions regarding the optimization of the plant’s modernization continues. At the same time the accounts payable of the chemical plant remains at an acceptable level  - during a year the amount of its long-term loans and credits decreased from RUB 12.2 billion to RUB 9.1billion (minus 25.6%) though the short-term ones remained at the level of 2008 – RUB 7 billion.    
Nevertheless, it is known already that one project – construction of an ethylene producing complex with a capacity of 1 million tons per year – will be still postponed by NKNH. “We do not stop as far as the 1-million-tons-capacity ethylene plant is concerned. We work out the raw material base so that in the future it would be an lean production. Most probably we will start working on it in 2013 - 2014”, Vladimir Busygin said. As to Rustam Minnikhanov, he explained this shift in the timetable by the necessity to launch in the first place the major petrochemical project in the Republic – a complex of refineries TANEKO in Nizhnekamsk. “Today we must complete the first stage of construction of TANEKO and widen the capacity of the increase in oil refining up to 14 million tons. That’s why the polyethylene project is slightly moved. Though the 1-million-ton-capacity ethylene plant will be certainly built”, the president of Tatarstan emphasized. On the other hand, once the refinery in Nizhnekamsk is set into operation it will supply NKNH with 300 thousand tons of butane-containing and pentane-containing fractions and up to 1.7 million tons of straight-run gasoline for further processing.  



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