Minnikhanov: ''Strategy-2030 implies that oil refining and petrochemistry will be the point of economic growth''

In 2017, Nizhnekamskneftekhim's total revenue from sales amounted to 162 billion rubles

Minnikhanov: ''Strategy-2030 implies that oil refining and petrochemistry will be the point of economic growth'' Photo: Oleg Tikhonov

Nizhnekamskneftekhim's revenue from sales has increased by 40 billion rubles over five years. These figures were announced by Director General of Nizhnekamskneftekhim (NKNK) Azat Bikmurzin at an annual shareholders meeting. In 2017, the revenue from sales amounted to 162,1 billion rubles, the net profit of the enterprise — 23,7 billion rubles. This year, it has been decided not to distribute profits again, due to implementation of the olefin complex project. When the payment of dividends will start and how NKNK opened a new unit for the production of isobutylene — read in the material of Realnoe Vremya.

Launch of the unit for isobutylene production

One of the goals of NKNK is to increase the production of isoprene rubber SKI-3 to 330,000 tonnes. For this purpose, the isoprene monomer plant is working on three investment projects. The first was implemented in September 2017, when the plant launched the unit for formaldehyde production with an annual capacity of 100,000 tonnes. Today it is the turn of the second project — commissioning of the unit for isobutylene production with a capacity of 160,000 tonnes per year.

''There is a good tradition — to lauch a production unit before each annual meeting of shareholders. Nizhnekamskneftekhim is the largest, modern plant of the world level. We have just looked at the level and quality of construction work. They are very high, and this indicates a great perfectionism of the team. I would like to thank the shareholders who made this decision, TAIF Group, the executive directorate, installers, builders, technologists, who took part in the project implementation,'' said President of Tatarstan Rustam Minnikhanov.

Isobutylene serves as a raw material for the production of isoprene — the main component in the production of synthetic isoprene and butyl rubbers, it is also used to produce organoaluminum compounds. In order to successfully accomplish the programme on isoprene rubber production increase, the isoprene-monomer plant at Nizhnekamskneftekhim is now upgrading the isoprene unit, which will become the third investment project.

One of the goals of NKNK is to increase the production of isoprene rubber SKI-3 to 330,000 tonnes

''The readiness of the project on isoprene is 92%, almost 95%. In a month we are starting startup operations there,'' said Director General of NKNK Azat Bikmurzin to President of Tatarstan Rustam Minnikhanov during a tour around the production site.

Together with the president of Tatarstan, the new unit was inspected by Director General of TAIF PSC Albert Shigabutdinov, Chairman of the Board of Directors of Nizhnekamskneftekhim Ruslan Shigabutdinov and member of the Board of Directors of Nizhnekamskneftekhim Vladimir Busygin. After the inspection, they pressed the symbolic start button, thus giving the official start to the work of the unit.

Launch of the unit for isobutylene production became the second investment project at the isoprene-monomer plant. Photo: president.tatarstan.ru

NKNK's revenue from sales increased by 40 billion rubles over 5 years

''Annual lauch of new facilities is a reason why the company's revenue and net profit steadily grow,'' explained Azat Bikmurzin, Director General of the company after the annual general meeting of shareholders of Nizhnekamskneftekhim. Over 5 years, the company's revenue from sales increased by 40 billion rubles and reached 162,1 billion rubles by the results of 2017. Sales profit amounted to 13,6 billion rubles, other profits in 2017 approached the level of 24,1 billion rubles, other expenses — 8,8 billion rubles.

Profit tax was charged at 6,5 billion rubles, the company's net profit amounted to 23,7 billion rubles, net assets – 132,4 billion rubles.

''In 2017, we reached 162 billion rubles of revenue, in 2018 we expect a little more — about 180 billion rubles for Nizhnekamskneftekhim GC. We see growth in net profit, the market tendency contributes to this, as well as newly introduced facilities and new products. The plans for 2018 are to reach 28 billion rubles for NKNK group of companies,'' said Azat Bikmurzin, Director General of Nizhnekamskneftekhim PJSC.

NKNK's revenue from sales increased by 40 billion rubles over 5 years and reached 162,1 billion rubles in 2017

From the company's net profit of 23,7 billion rubles, 10 billion rubles will be allocated to finance the strategic programme in 2018, the remaining 13,7 billion will be left unallocated and dividends on shares for 2017 won't be paid. We remind that by the results of 2016, dividends were not paid either, which was linked to the implementation of the olefin complex project. ''When will the payment of dividends start?'' reporters asked Albert Shigabutdinov after the shareholders' meeting.

''I think that the payment of dividends will begin next year and, I think, it will be regular. Today, a strong foundation has been created, which, according to the results of 2018, will already allow to pay dividends,'' explained Director General of TAIF PSC Albert Shigabutdinov.

702,000 tonnes of synthetic rubbers and almost 700,000 tonnes of plastics

In 2017, NKNK sold 702,000 tonnes of synthetic rubbers, which is by 6% more than in 2016. Rubbers traditionally had the maximum share in the company's revenue, which last year was 44%. As for the sales geography, 85% of the sold rubber was exported. The main buyers of Nizhnekamsk rubber are global tire companies. Last year, NKNK further strengthened its position in the global rubber market and signed new long-term contracts: in June, a contract was signed for the supply of synthetic rubber to the company Michelin, and in December – to the company Pirelli.

The company reached maximum volumes of rubber production. So, the millionth tonne of halobutyl rubber was produced. The output in the production of butyl rubbers was increased up to 220,000 tonnes a year. The company began to develop the production of new brands of functionalized styrene-butadiene rubber for the production of premium segment tires and of neodymium butadiene rubbers for the production of energy-efficient tires. This is due to that the consumer markets of these rubbers in the tire industry are growing faster than others.

In 2017, Nizhnekamskneftekhim retained its key position in the Russian plastics market. Almost 700,000 tonnes of plastics were produced, 85% of which were sold in Russia.

''We occupy niches, in which Nizhnekamskneftekhim had not been involved before. Our latest developments are a new line of low-density linear polyethylene, which was not produced in Russia. We have new brands of cable polyethylene. But in improving the quality of the product, our accompanying task is to prevent an increase in their cost. Accordingly, we need always to be in the market, to be always in good shape to have a serious competitive advantage over imported materials,'' said Chairman of the Board of Directors of Nizhnekamskneftekhim Ruslan Shigabutdinov.

According to Ruslan Shigabutdinov, the solution of logistics issues, issues of storage of raw materials for consumers can become a competitive advantage of NKNK

Last year, NKNK actively worked with the manufacturers under direct contracts, taking over logistics issues. According to Ruslan Shigabutdinov, the company will develop in this direction.

''The bulk of our consumers is medium and large businesses, but there is a small percentage of small businesses, for which the issue of logistics, storage of raw materials is paramount and expensive. We can help them in this matter and we believe that it can become our competitive advantage,'' the chairman of the Board of Directors of Nizhnekamskneftekhim continued.

Financing of olefin complex divided into 40 stages

Major event in 2017 became the signing of the agreement of Nizhnekamskneftekhim with German Linde for the construction of the new olefin complex with a capacity of 600,000 tonnes per year. The deal was concluded at the St. Petersburg International Economic Forum in June 2017. Over this time, the early stage of work was carried out: the development and presentation of project documentation, preparation of documents on environmental and social impact assessment, information package for preliminary investment memorandum and presentation of the project in Nizhnekamsk and local rural settlements. This summer, the issue of financing the new project has been resolved — at SPIEF 2018, Nizhnekamskneftekhim signed a long-term loan agreement with Deutsche Bank AG. Five German banks — Deutsche Bank, UniCredit Bank AG, Bayerische Landesbank, Landesbank Baden-Württemberg, DZ BANK AG — will allocate 807 million euros until 2032 for the construction of the complex.

''The financing is divided into 40 stages – the funds will be received monthly. The duration of the project is 72 months, but the loan is issued for 40 months, since 15% of the project cost will be invested by Nizhnekamskneftekhim from its own funds,'' explained Director General of TAIF PSC Albert Shigabutdinov.

''We have a very serious work — it is ethylene 600. Today, 613,000 tonnes of ethylene have been produced, which is a record figure, and the complex is of the same volume, 600,000 tonnes, which we must build in the nearest future. For this purpose, we have all the conditions: the financial scheme is approved, the work is underway on design, selection of equipment suppliers, and I am sure that Nizhnekamskneftekhim will not only preserve, but also multiply its leadership qualities. The Strategy-2030 implies that we will develop and the point of growth of the economy of the republic will be oil refining and petrochemistry. And of course, a huge element in this development is Nizhnekamskneftekhim. This is not only pyrolysis, ethylene complex, but also further processing of derivatives. Ethylene-600 is only the first stage,'' said President of Tatarstan Rustam Minnikhanov.

Vladimir Busygin was awarded the order Duslyk by the President of Tatarstan for long-term fruitful work and significant contribution to the development of economic and industrial potential

Following the results of the annual general meeting of shareholders, the composition of the Board of Directors changed. Deputy Director General of TAIF PSC for energy and information technology Ruslan Gizatullin has become a new face in it. He took the post of Vladimir Busygin. Let us remind that in September 2017, Vladimir Busygin resigned as Chairman of the Board of Directors of Nizhnekamskneftekhim and left the post of Deputy Director General of TAIF PSC for management and strategic development of Nizhnekamskneftekhim PJSC in connection with resigning for well-deserved rest. Vladimir Busygin has been awarded the order Duslyk for long-term fruitful work and significant contribution to the development of economic and industrial potential by the President of Tatarstan.

By Ksenia Zharkova. Photo: Oleg Tikhonov
Tatarstan