Sibur boosts petrochemical exports to Europe

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, Nasdaq informs. 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 over two million tonnes of polymers, mostly polyethylene and polypropylene, this year, close to its full capacity. The plant was launched in 2019 with annual capacity of 2.5 million tonnes of polymers jointly with an existing plant.

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. Sibur has a deal to sell up to one million tonnes of polyethylene a year to China's Sinopec from ZapSib. Komyshan also said that the company had managed to quickly replace feedstocks for its production from Gazprom's plant in Urengoy, which had suffered a fire last month. He said that Gazprom has provided supplies from other regions and Russian gas producer Novatek NVTK.MM has helped to facilitate the supplies. "Gazprom, in effect, has almost restored regular supplies via the new supply channel," he said.