Rustam Minnikhanov: ''Results of the whole Republic would look differently without TAIF’s system work''
The total investment in the implementation of the heavy residue conversion complex at TAIF-NK is almost 100 billion rubles, reported on 17 April at the annual meeting of shareholders of the parent company of TAIF Group with the participation of Tatarstan President Rustam Minnikhanov. At the traditional meeting with journalists they discussed why the oil refining industry has turned out to be in a difficult situation. Read the details in the report of Realnoe Vremya.
Losses at more than 12 billion rubles due to the impact of the economic crisis
At the annual meeting of TAIF shareholders, they summed up the results of the joint-stock company and group of companies. Director General of TAIF PSC Albert Shigabutdinov, reporting on the performance of the group of companies, said that the world crisis that began in 2013 continues to influence the economy today. ''First and foremost, it has affected a significant decrease in the purchasing power of consumers, not only in Russia but also in the leading countries of the world, which has led to falling prices for manufactured products, including ours. The decline in world prices has affected 60% of the produced by TAIF Group petroleum products and polymers. For certain types of products, such as rubbers and diesel fuel, a decline in export prices compared to 2015 was 12% and 21% respectively. In the end, the amount of losses of TAIF Group from lower prices during the reporting year — more than 12 billion rubles, most of which is due to a decline in profit,'' said Albert Shigaboutdinov.
But as it turned out, especially difficult is the situation at TAIF-NK. In the past year, excise taxes on produced by TAIF-NK oil were significantly increased. ''The excise tax on diesel fuel by the end of 2016 was increased to 5,300 rubles against 3,450 rubles, i.e. by more than 53%. The excise tax on gasoline of the grade 5 in 2016 increased to 10,130 rubles per tonne, it is by 83% more than in 2015,'' Director General of TAIF cited disappointing data and noticed that, nevertheless, they managed to achieve a growth of volume of production, mainly due to an increase in production of more efficient products — with higher added value, and consequently, a reduction of inefficient industries.
Despite the influence of these negative factors, during the reporting year the holding TAIF managed to earn net income from sales in the amount of 625,8 billion rubles, which is by 9.1 billion rubles more than in 2015. The net sales of the group companies amounted to 538,7 billion rubles, which is by 14.5 billion rubles, or 2.8%, higher than the previous year. We will remind, Realnoe Vremya has published thedetailed review of the financial-economic and production results of the group of companies TAIF.
Hidden flaw from the Korean manufacturer shifted the terms of HRCC
The holding is simultaneously implementing several major projects. At the shareholders' meeting, they elaborated on the ambitious heavy residue conversion complex at TAIF-NK.
''This year we have reached the final line of the most important large-scale projects for the last 10 years, which will have a significant positive impact on efficient development of the economy of Tatarstan and Russia. The commissioning in 2017 of the unique heavy residue conversion complex at TAIF-NK will have an impact on the world refining. The total investment in the project of TAIF-NK is almost 100 billion rubles. We planned to start commissioning activities in the fourth quarter of 2016, but, unfortunately, our plans at the roots were cut off by the Korean company, the supplier of unique equipment for manufacture of which a special approach is required. Units of air cooler of high pressure section were produced with flaws, in the result of which we were compelled in emergency mode urgently to find and to order blocks from the French company Hamon out of queue. Only a huge amount of work has allowed us to halve the production time of equipment and materials in replace of those worn out during the tests because of the flaws of the manufacturer. In the result, the starting events were rescheduled for spring 2017,'' said Albert Shigabutdinov.
Rustam Minnikhanov worried about the heart of Ilsur Metshin
Having listened to the results of the reporting period, Rustam Minnikhanov noted that no matter how difficult it was, the overall performance of the group is positive and the plans are very ambitious. ''What is TAIF today? It is 21% of the industrial production of Tatarstan, about 27% of the gross regional product, and 17% of revenue in consolidated budget from tax profit, 78 billion rubles of investments in fixed capital. Many regions don't even see such volume of investments,'' said Rustam Minnikhanov.
Having listed all current projects of TAIF Group, including social ones, the president noted that now they are working on restoration of Lake Lebyazhye, which is in a derelict state. ''In the near future, it will become a favourite place of citizens,'' suggested Rustam Minnikhanov and after a pause went on to support sport. Looking at sitting next to him the mayor of Kazan and the president of football club Rubin Ilsur Metshin, Minnikhanov said with irony that we have even less goals on the field. ''Any job requires some effort. Ilsur Metshin is also nervous. I am even more worried about him. What if because of a loss of the team his heart stops beating? Life is such thing that you need to take the losses. Here we should understand that the brand Rubin is the brand of the republic. Bad results should not be here. You need to make every effort,'' said the president of Tatarstan.
''In general, we are grateful for the work done by the whole group. The results of the whole Republic would look differently if there was no such systematic work on the part of the group of companies TAIF. Tatarstan makes a valuable contribution to industrial output and gross regional product. The republic allots to the budgets of all levels of taxes and fees in the amount of 690 billion rubles! This is the first place in our okrug and the fifth position in the country,'' said Rustam Minnikhanov.
In conclusion, the meeting approved the board of directors of the parent company consisting of 10 people, which includes Advisor to Director General of TAIF PSC Timur Shigabutdinov. Deputy Director General of TAIF PSC for production-commercial activities Rustem Sulteyev retained the position as Chairman.
''Oil refining industry is being in a very bad situation''
At the press conference with participation of President Rustam Minnikhanov, Director General of TAIF Albert Shigabutdinov and Chairman of the Board of Directors of TAIF PSC Rustem Sulteyev, they discussed prospects of the development.
''It is very important when the management of the company in detail analyse certain circumstances,'' again took the floor Rustam Minnikhanov. ''With difficulties on the market, tax laws, they find a way to optimize production, to establish a product line. The development prospects are very ambitious. TAIF-NK has a huge project. The launch of the conversion complex will seriously change the structure of production and improve the economic situation of the company. Today it is very important for us to launch this complex as soon as possible. In general, the refining industry is being in a very difficult situation. It is a little unfair because refiners have signed agreement with the government aimed at increasing volume and conversion rate. But with the tax change it wasn't taken into account, and the processors turned out to be in a difficult situation. Despite this, the group finds solutions and I would like to thank the management of the group. Their chosen strategy, of course, makes to search for new niches and new markets, but if there was no this work, there would not be today's investment.''
The question of Realnoe Vremya related the tender for the project of ethylene complex of Nizhnekamskneftekhim. ''The tender is still being continued, the companies Toyo, ST&I, Lummus, Linde participate. In the first half of the year, the tender will be completed and a contract will be signed,'' said Albert Shigabutdinov.
Then the journalists were interested in the fact that Nizhnekamskneftekhim for the first time in 10 years has refused the payment of dividends. ''Yes, but this is one side, the other is an increase in capitalization of the company due to non-payment of dividends, and it is also beneficial to shareholders. Now the issue of funding of the ethylene complex is being discussed. The calculations are being done, we receive different suggestions. When everything to every penny will be counted in all four stages, then we can say: when and in what amount the future dividends will be paid,'' concluded Director General Albert Shigabutdinov.