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06.02.2007  
  “Vremya & Dengi” (“Time & Money”) newspaper,  
 

"Nizhnekamskneftekhim"reviews the development strategy


 
  The ordinary meeting of OJSC “Nizhnekamskneftekhim” Board of Directors chaired by PSC “TAIF” General director Albert Shigaboutdinov was held on February 6, 2007.

Board members discussed the strategic program of development of OJSC “Nizhnekamskneftekhim” for the period 2008-2012, represented by OJSC “Nizhnekamskneftekhim” General director Vladimir Busygin. The Board of Directors proposes the revenues by 2012 to total at least RUR 158 bln based on the preliminary calculations made on the planned investment projects. The realization of this program presupposes not only the increase of the existing facilities’ capacities but also the establishing of the high-capacity petrochemical complexes that requires the significant investments to be made.
OJSC “Nizhnekamskneftekhim” is the largest in the Russian Federation production company and the exporter of the petrochemical production. The company takes the leading position in the world in production of certain types of goods. The government of the Republic of Tatarstan, the company’s shareholders and management applied significant efforts to reach the development trend of OJSC “Nizhnekamskneftekhim” in 1995-2006 being the unique one for a global company. The company’s financial highlights represented, on average, a tenfold increase with total revenues raised from RUR 3.2 bln in 1995 to RUR 47.6 bln in 2006. The sales profit showed growth for the same period from RUR 0.66 bln to RUR 5.4 bln, the net profit grew from RUR 0.46 bln to RUR 3.2 bln followed by an increase of tax contributions to the all-level budgets.
The investment program was developed by OJSC “Nizhnekamskneftekhim” in order to further strengthen the company’s positions on the petrochemical market. This program presupposes the investments to the development of company’s existing facilities and the implementation of new high-effective petrochemicals complexes valued at RUR 115 bln.
The program is going to be realized with the company’s own and borrowed funds. The attraction of the borrowed funds for the realization of OJSC “Nizhnekamskneftekhim” investments programs can impair the structure of company’s liabilities and couldn’t be brought to life without the shareholders’ approve. As for the existing “Nizhnekamskneftekhim” debt on the existing loans and borrowings and debt that is going to appear as far as the loans taken for the investment aims would increase, they would make it impossible to raise additional borrowings from the investment institutions.
In the following situation the only reasonable and efficient way to attract the funds to make investments in the initial stages of “Nizhnekamskneftekhim” development strategy is to conduct the additional issue of company’s ordinary shares with the shares placement by closed subscription among the company’s shareholders. The issue of additional shares would allow to attract funds in the amount up to RUR 25.8 bln to the company’s issuer account without any debt burden for OJSC “Nizhnekamskneftekhim”, would allow to reach the planned financial highlights and to attract additional RUR 100 bln of borrowed funds. The issue of additional shares placed by closed subscription among the shareholders of OJSC “Nizhnekamskneftekhim” at par value would provide the stability of shareholders’ structure and prevent any dilution of their stake.
The renewed strategy of development of OJSC “Nizhnekamskneftekhim” would allow not only to strengthen the company’s positions on the already developed slices of the Russian and foreign markets, but to develop the new segments, raise competitiveness & profitability of the produced goods and, consequently, the income level of the company’s employees and shareholders, increase the level of tax contribution to all-level budgets with the following increase of company’s contribution to the development of Nizhnekamsk and Russian economy.
The Board of Directors took note of the preliminary results of OJSC “Nizhnekamskneftekhim” activity for 2006 and pointed at the need to keep the positive dynamics for 2007. The goods were produced for RUR 46 bln for the year under report. This shows the 115.6% growth in effective price if compared with last year corresponding period. The revenues of OJSC “Nizhnekamskneftekhim” amounted RUR 47.6 bln and reported a gain of 18% with respect to the last year level. The company fulfills payments to all-level budgets in due time and in full measure. The company’s average earning power in 2006 was RUR 16.6 thousand, an increase of 14.3% with the respect to the corresponding period in 2005.
The Board of Directors members took note of the analysis of raw materials market and end products market, as well as the information on risk management in OJSC “Nizhnekamskneftekhim” in 2006 and approved the structure of financing of OJSC “Nizhnekamskneftekhim” innovative activity in 2006.
The Board of Directors approved the date for the next scheduled annual general meeting of OJSC “Nizhnekamskneftekhim” shareholders; the meeting will start at 10:00 am at the assembly hall of A-12 building (plant management building).
March 10, 2007 was approved for the date of making a list of OJSC “Nizhnekamskneftekhim” shareholders who would be provided a right to participate on the meeting scheduled for April 26,2007.
 
 
 

 

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