History of Nizhnekamskneftekhim: fateful decisions, struggle for world market and strengthening the position

The period of second heyday

For many enterprises in the new Russia, the early 2000s turned out to be a difficult time, too. Nizhnekamskneftekhim, having mobilised all its forces and capacities, focused on the development of the complex. The border of two millennia is marked by the commissioning of the production of triethylaluminium and dicyclopentadiene concentrate. The convection oven was replaced at the modernised Ethylene-450 launch complex in 2000, the ethane ovens were reconstructed in 2001, and a new pyrolysis oven was put into operation in 2002.

Thanks to TAIF's participation, it was possible to start updating and expanding the line of high-quality products and increasing the capacity for deeper processing of raw materials. Polymers were in high demand on the world and Russian markets and cost much more than monomers.

In 2003, the production of general-purpose polystyrene and impact-resistant polystyrene with a total capacity of 50,000 tonnes a year was put into operation (production output today reaches 350,000 tonnes a year). Styrene, previously produced as a finished product, has now become a raw material for further processing and a source of additional profit for the complex. The start of production was another significant milestone — the beginning of the second heyday of the complex and its transition from the production of monomers to the production of polymer products, plastics.

The high quality of polystyrene allowed Nizhnekamskneftekhim to take a leading position in the Russian and global markets and, at the same time, continue to increase its volume: in 2005, the second stage of polystyrene production was put into operation. In 2008, the first general-purpose polystyrene granules were obtained at the third stage of the plant. By the beginning of 2011, the volume of polystyrene production had reached 184,000 tonnes a year. In 2014, the launch of the fourth line of production of polystyrene using the new technology made it possible to increase the annual production of styrene plastics by another 50,000 tonnes.

The maximum utilisation of existing capacities gave the opportunity to achieve economic success, which means obtaining funds for further technological development and the construction of new production facilities. TAIF Group's policy of deep processing of raw materials fully justified itself.

In 2005, TAIF Group, largely due to which Nizhnekamskneftekhim not only remained afloat in the economy but also confirmed its status as an increasingly successful participant in the global market, became the main shareholder of the petrochemical complex, and in 2018, it accumulated a block of more than 75% of shares. The entry of Nizhnekamskneftekhim into the group of companies allowed to strengthen intra-republican cooperation, which gave a positive effect on the synergy of TAIF Group's enterprises.

In 2006, Albert Shigabutdinov, then director general of TAIF JSC, became chairman of the board of directors of Nizhnekamskneftekhim. In this status, he worked until 2013, managing the issues of strategic development of the complex.

It was in 2006 that Nizhnekamskneftekhim launched the production of polypropylene with a capacity of 180,000 tonnes a year.

2009. Nizhnekamskneftekhim announced itself on the polyethylene market, launching production with a capacity of 230,000 tonnes a year. In 2016, it launched the production of two injection-molded polyethylene grades. They were developed by scientists from the research and technology centre of Nizhnekamskneftekhim together with technologists of the Plastic Plant and managers of the commercial service, the products made a worthy competition to foreign analogues. In 2013, the production of ABS plastics with a capacity of 60,000 tonnes a year was put into operation.

The production of synthetic rubbers at Nizhnekamskneftekhim was established in 1970, but at that time the production was completely focused on the domestic market of the USSR and the products did not always meet strict international standards.

During the perestroika period, the production of synthetic rubbers experienced a serious decline. And from the beginning of the 2000s, the rise started again. Nizhnekamskneftekhim, mastering the latest technologies, investing in the modernisation and expansion of production, achieved world recognition, to this day remaining the world's largest supplier of isoprene rubber for the tyre industry. Among the major consumers of SKI-3 are the world's leading tyre manufacturers, which in itself indicates the highest quality of synthetic rubbers produced. The quality of the products of Nizhnekamskneftekhim are highly appreciated by the world giants — Pirelli, Michelin, Bridgestone, Continental and Goodyear, with which Nizhnekamskneftekhim signed long-term agreements for the supply of products. Nizhnekamskneftekhim's rubbers are in demand in all areas of tyre production — from light bicycle tyres and cameras to special ones designed for aviation and heavy trucks.

If before 1999 the line of products of Nizhnekamskneftekhim's rubber production consisted of only two items — isoprene and butyl, then at the moment the number of synthetic rubbers produced, the quality of which is confirmed by world-class certificates, has tripled: SKDL, SKDN, halobutyl rubbers — chlorine- and bromine-containing, food-grade butyl rubber… This is the result of systematic and thoughtful work on studying the needs of the Russian and global market, developing own technologies and acquiring the best world practices in the period from 2003 to the present. For example, in 2004, the company mastered the production of halobutyl rubbers and polybutadiene rubber on the base of a neodymium catalyst, and by 2007 — polybutadiene rubber on a lithium catalyst.

In 2014, Synthetic Rubber Plant started working on a project for the production of two more types of styrene butadiene rubber intended for the tyre industry — DSSK-2560F and DSSK-2560FM. The modifications and functionality, Nizhnekamskneftekhim's scientists brought into DSSK (styrene butadiene synthetic rubber), make the final product unique, different from similar rubber from other petrochemical enterprises in Russia. The letter “F” in the name of DSSK indicates the presence of functional groups in its composition. The special properties of functionalised elastomer when used in the production of “green tyres” provide better grip on wet roads and increase the safety of cars. The tyres made with this rubber have a low rolling resistance, so they have a low noise level when driving, and allow you to save fuel.

The wide range of synthetic rubber offers tremendous opportunities for their application: in addition to the tyre industry, Nizhnekamskneftekhim's rubbers also serve as important components in the food industry, is indispensable in the manufacture of polystyrene, for example ABS plastics, the production of which the company also set up, are widely used in the manufacture of medical equipment and hundreds of other areas.

In 2011, Nizhnekamskneftekhim adopted a corporate development strategy for the period up to 2020, one of the key goals of which was stated to strengthen the position of Nizhnekamskneftekhim as a major producer of synthetic rubbers on the Russian and global markets. Gradually modernising existing and building new production facilities, the company has significantly increased the volume of production in the first few years of its recent history. For example, in 2015, the fourth line for the production of halobutyl rubbers was officially put into operation.

In the face of fierce competition, global price fluctuations and sanctions pressure, the issue of independence from external supplies of raw materials, including import substitution of important components of production, is acute. Nizhnekamskneftekhim is building close cooperation with research centres of the republic. Already back in 2014, together with the Kazan Federal University, Nizhnekamskneftekhim launched the production of catalysts, whose products are now actively used by petrochemists in the production of synthetic rubbers instead of expensive imports.

Two important events took place in 2017: the formaldehyde production unit was put into operation, which significantly increased the production of isoprene synthetic rubber, and the Butyl Rubber Plant completed modernisation, thanks to which the industrial production of butyl rubber increased to 220,000 tonnes a year. A year later, the Isoprene-Monomer Plant launched the production of isobutylene at 160,000 tonnes a year.

One of the strengths of Nizhnekamskneftekhim is its own production of ethylene, propylene, butadiene, without which it is impossible to produce either polyethylene, polypropylene, or rubber. At the time of commissioning in 1976, the EP-450 ethylene production was the largest in the country. By the way, it was built in record time. But for the actively developing petrochemical production in the 21st century, this was no longer enough.

By 1992, thanks to the modernisation of capacities, the production of ethylene at Nizhnekamskneftekhim had been increased to 485,000 tonnes, in 2010 — to 593,000 tonnes, and in 2011 — it crossed the mark of 600,000 tonnes of ethylene a year. In 2018, the Ethylene Plant put into operation two new SRT-VI pyrolysis ovens to replace the obsolete SRT-II type and installed additional capacity. By the end of 2019, the volume of ethylene production had already reached 618,000 tonnes a year, and the production of benzene, which in 1995 barely exceeded 100,000 tonnes a year, thanks to the modernisation of equipment and continuous improvement of technology by 2019 it amounted to almost 275,000 tonnes.

It was decided to build two more ethylene complexes with a total capacity of 1200 thousand tons with a whole complex of related production facilities, which would significantly expand the list of products produced by Nizhnekamskneftekhim in demand on the Russian and world markets. The process of developing new niches and directions for Nizhnekamskneftekhim is a continuous and non-stop process. For comparison, in 1995 Nizhnekamskneftekhim produced 115 brands and varieties of products. In 2019 — already 331. Out of the previously produced brands, 33 were discontinued, 47 had improved consumer characteristics, and only 35 remained unchanged. For 24 years, the company has mastered the production of 296 new brands and varieties of products in demand by the market.

In 2017 at the St. Petersburg International Economic Forum, TAIF Group and German Linde AG signed a memorandum of strategic cooperation. Within its framework, an agreement was reached on the implementation of a project for the construction of an ethylene complex in four stages. The new olefin complex is not going to replace the existing one. It will triple the production of ethylene to 1,8 million tonnes, triple the production of polymers, and increase the output of rubbers to 1 million tonnes. In other words, it will become a key growth point for Nizhnekamskneftekhim PJSC as a whole.

The project is so large-scale and significant that it was included in the strategy for the development of the Russian petrochemical industry, and the nuances of the agreement between TAIF Group and German Linde AG became a topic of discussion during the meeting in 2017 between Russian President Vladimir Putin and German President Walter Steinmeier.

Putin is familiar with the work of the complex firsthand. He visited the production facilities of Nizhnekamskneftekhim in 2009, when, as Prime Minister of Russia, he held a federal meeting on the development of petrochemistry and gas chemistry in Russia in Tatarstan.

Both new and existing production facilities require a comprehensive approach in providing energy resources. TAIF Group has done a lot of work to ensure reliable energy supply to enterprises, which must meet modern requirements of industrial and energy security. Such large enterprises should have two, or better yet three separate, independent sources of energy supply. Emergency shutdowns and blackouts that occurred at a time when production facilities were completely dependent on external supplies of electricity and heat cost billions of rubles in losses and lost profits every year. TAIF Group's acquisition of the CHPP (PTK-1) in 2010 and its subsequent modernisation not only reduced the share of energy costs in the cost of production but also significantly improved the quality of electricity and heat supply.

At the end of 2014, on behalf of the president of Tatarstan, Grid Company started construction of another independent power source — Begishevo substation. It was put into operation in September 2016 in addition to Nizhnekamskaya station built in the 1970s. The substation is powered directly by a 220 kV line from the Shchelokov substation. With the introduction of this substation, the enterprises of the Nizhnekamsk industrial hub got the opportunity of power supply from three independent sources — ZRU-110 kV of the Nizhnekamsk CHPP (PTK-1), Nizhnekamsk substation and new Begishevo substation.

At the launching ceremony of the substation, Ilshat Fardiyev, the director general of Grid Company, said: “The implementation of the project became possible thanks to large consumers — the companies Nizhnekamskneftekhim, TAIF-NK, Nizhnekamskshina, KAMAZ, Kazanorgsintez, Tatneft and their tariff components.” As part of the implementation of the commitments made to implement the programme to improve the reliability of the Nizhnekamsk industrial hub, TAIF Group's enterprises alone invested more than 4 billion rubles in the reconstruction and modernisation of power supply systems for production facilities.

A similar approach was adopted to address the issue of providing gas supply to enterprises of the Nizhnekamsk industrial hub. The thing is that already when designing the new heavy residue conversion complex of TAIF-NK JSC, it became obvious that the capacity of the existing gas transmission network in the Nizhnekamsk region is completely exhausted. In other words, no new project in the Nizhnekamsk industrial hub associated with an increase in natural gas consumption could be implemented without solving this problem.

The second problem was the gas supply scheme of the Nizhnekamsk industrial hub and the city of Nizhnekamsk, which was supplied via a gas pipeline. In case of any serious accident on this gas pipeline, which was, in fact, the only source of gas supply, the entire Nizhnekamsk industrial hub remained without gas. In this regard, TAIF Group, with the support of the republic's leadership, decided to build another gas pipeline that would connect the Urengoy-Pomary-Uzhgorod gas pipeline system with the Nizhnekamsk industrial hub.

The 30-kilometre-long gas pipeline crossing the Kama River was built in record time and put into operation. Currently, Nizhnekamskneftekhim PJSC and other TAIF Group's enterprises are provided with gas supply from two independent sources. Thanks to the implementation of the project, the combustion of reserve fuel (fuel oil) at Nizhnekamsk CHPP (PTK-1) is excluded in case of gas supply system restrictions. Besides, additional volumes (up to 4 billion cubic metres) of natural gas are being supplied for the implementation of new projects for the development of the Nizhnekamsk industrial zone. In particular, we are talking about the projects implemented by TAIF Group.

At the very beginning of 2019, during the working visit of the Tatarstan delegation headed by President of Tatarstan Rustam Minnikhanov to Denmark, a memorandum of intent was signed with Haldor Topsoe. This signing was the first step towards the conclusion of a contract for the construction of a methanol production plant with a capacity of 500,000 tonnes a year for Nizhnekamskneftekhim.

Nizhnekamskneftekhim is ahead of the level of the Soviet period in terms of development and commissioning of new production facilities. For a quarter of a century, the complex has significantly strengthened its position in the domestic and global markets at the cost of incredible efforts, significantly increasing its capacity, efficiency and output volumes. So, if in 1995 Nizhnekamskneftekhim processed 1 million 701 thousand tonnes of basic raw materials (straight-run gasoline and LPG), by the end of 2018 this figure was already 3 million 408 thousand tonnes with the prospect of growth by 2030 to the level of 7 million 282 thousand tonnes. The total volume of production from 1 million 604 thousand tonnes a year in 1995 more than doubled and reached 3 million 242 thousand tonnes by 2018. By 2030, this figure is expected to double: TAIF Group plans to make large-scale investments in the further development and strengthening of Nizhnekamskneftekhim PJSC, bringing the annual production volume to 6 million 940 thousand tonnes.

At the same time, net revenue from 203 billion rubles in 2018 should grow to 365 billion rubles by 2030. For comparison, the complex's revenue in 1995 barely reached 4 billion rubles. The production of synthetic rubbers has grown from 128,000 tonnes in 1996 to 780,000 tonnes today. And plastics, the production of which was completely absent in 1995, are now produced 730,000 tonnes a year with the prospect of increasing this volume to 2 million 280 thousand tonnes by 2030.

Caring for people

Representatives of more than 300 professions work at the factories and production facilities of the Nizhnekamskneftekhim complex. The petrochemical giant is not only interested but also actively supports any initiatives aimed at increasing the prestige of working professions. Close relations with specialised secondary specialized and higher educational institutions have been established. Moreover, future employees of the complex already from the training bench delve deeply into the future specialty of the dual system. Master-production workers often stand behind the teaching department to teach theory, and students practice both in the laboratories of their educational institutions, in the equipment of which Nizhnekamskneftekhim has taken an active part, and directly at the production facilities of the petrochemical complex.

Every year, more than one and a half thousand students do practical training in the departments of the complex. And later, when yesterday's graduate becomes an employee of Nizhnekamskneftekhim, the training continues: first, the young specialist is assigned to an experienced mentor who helps them quickly and better immerse themselves in the profession, and after a while, the company provides its employees with the opportunity for professional training and professional development.

“We can say that we grow many specialists ourselves. For example, we call the N.V. Lemaev College of Petrochemistry and Oil Refining as the shop No. 1. Our specialists together with teachers develop training programmes that are specialised for Nizhnekamskneftekhim PJSC. That's why we have almost ready-made specialists coming to us," explained Aleksey Bochkarev, the director of the training centre for personnel of Nizhnekamskneftekhim, speaking at a student forum in Kazan in 2018.

The success and quality of training are regularly tested by professional skill competitions. Every year, such competitions are held at the enterprises of the complex for several dozen different professions. The winners not only get an opportunity to increase their own level of performance but also a chance to become participants in regional, federal and international competitions of working professions, such as WorldSkills.

By the way, employees of Nizhnekamskneftekhim PJSC and its subsidiaries can compete not only in professional skills but also in various sports. Throughout its existence, the complex has supported and continues to support the development of amateur and professional sports. Almost all sports facilities in the city were built by Nizhnekamskneftekhimitself, either at its expense or with the direct and active participation of petrochemists. The football and hockey teams Neftekhimik, the sports club of the same name, the youth sports school, and a number of sections are under the patronage of Nizhnekamskneftekhim.

Continuing the traditions of urban planning and improvement

Until 1994, the chemical plant acted as a single customer for financing the design and construction of residential buildings and urban infrastructure.

“The majority of social facilities in the city, built on the title of the Nizhnekamsk plant. Nikolay Lemaev treated with special attention the issues related to the development of the city," Mayor of Nizhnekamsk Aydar Metshin said in November 2019 in celebration of the 90th anniversary of the birth of Nikolay Lemaev.

The traditions of construction and improvement of the petrochemical capital of Tatarstan laid down by Tabeyev and Lemaev are still maintained today. Only then the state allocated funds for the development of the city, but today the company itself invests billions of rubles in the future of the city, and therefore each of its employees, through honestly paid taxes.

The company confirms the course of a socially-oriented business with TAIF Group’s shareholders and management with its daily actions, it is an active participant in many social and republican construction programmes, thanks to which thousands of workers of NKNK factories and enterprises have already improved their living conditions. Tax payments of Nizhnekamskneftekhim PJSC to the Nizhnekamsk municipal budget alone has exceeded 13bn rubles since 1995 until now. And the complex has allocated twice more for social programmes and social expenses.

In 2001, precisely Nizhnekamskneftekhim joined and took on the main burden of issues to provide Nizhnekamsk with clean potable water despite the difficult period for the industry and economy of the country in general. Most water came from neighbouring Naberezhnye Chelny, while some water was replaced by industrial chlorinated water since the creation of the city through 2007 (the end of construction of the water treatment plant). The arrival of First Tatarstan President Mintimer Shaimiev and then-First Vice Chairman of the Russian Government Sergey Ivanov at the ceremony can be evidence of the great importance of the launch of the water treatment plant in Nizhnekamsk (WTP-NKNK JSC).

In 2006, improvement works began on a territory named The Chemists’ Park thanks to NKNK workers’ efforts instead of almost 10 ha of big wasteland between Prospekt Mira and The Resurrection of Christ Church. The crisis in 2008-2009 impeded but didn’t stop the work. Trees were planted, roads were laid, playgrounds were improved, the territory was regularly cleaned from waste during Saturday and Wednesday clean-ups. The park became a favourite place to spend leisure time for both Nizhnekamsk citizens and guests of the city long before the official opening. The solemn opening finally took place in 2011, a jubilee year for Nizhnekamsk. The amazing park became a gift of the petrochemists to the favourite city.

By its 50^th jubilee in 2017, Nizhnekamskneftekhim allocated 60 million rubles to reconstruct and beautify the N. Lemaev Square. It took another almost 40 million to improve and equip pedestrian areas on a site near Neftekhim Arena ice palace. Together with the improvement with the amazingly transformed embankment and reconstruction of highways and courtyard roads, Nizhnekamskneftekhim PJSC invested 525 million rubles to develop Nizhnekamsk’s social infrastructure from 2014 to 2019.

In 2016, NKNK began to implement one of the biggest and important environmental and social projects in history — reconstruction of biological treatment facilities built as early as 1966. The BTF, in fact, accepts sewage not only from Nizhnekamsk’s industrial site but also from the whole city. The works were done in two stages. The first stage was completed in autumn 2016. The second stage of reconstruction ended in summer of 2019. Tatarstan President Rustam Minnikhanov and Director General of TAIF JSC Ruslan Shigabutdinov participated in the solemn launch of the upgraded BTF.

“Nizhnekamsk is the republic’s petrochemical capital. Today the sector uses the latest technology, and we can certainly say that we have met international environmental norms thanks to modern treatment technology, modern production facilities,” Rustam Minnikhanov noted.

“Compliance with environmental requirements and norms has always been one of the priorities in the work of TAIF Group and NKNK PJSC. There is even no doubt that environmental costs are necessary. It is the primary task of the factory, shareholders to meet all environmental norms,” Ruslan Shigabutdinov stressed during the ceremony.

The construction of a new industrial and stormwater sewage tank ended. The total costs of the reconstruction works were above 3 billion rubles. As a result of the works done, sewage is so clean that the water going to the river is purer than the water enterprises take for production needs in all parameters. Russia’s few biggest enterprises can afford the treatment facilities of such a level and class, with such thorough treatment of sewage, with an effective system of steam trapping and a set of other high-tech components performing one task — to provide the absolute purity. And just a handful provides the reception and treatment of sewage from neighbouring settlements and neighbouring plants.

Health care actively develops and is supported as well. In 2019, TAIF Group, Nizhnekamskneftekhim PJSC together with SOGAZ GC allocated a big sum to modernise and equip the Polyclinic No. 1 where big repairs were done and modern equipment was provided.

“The job that was done will not only allow increasing the number of patients among our workers but also attract other citizens as we purchased modern equipment, and the doctors did training,” said Vice Director General of Staff and Social Affairs at Nizhnekamskneftekhim PJSC Rodion Bulashov in an interview with Realnoe Vremya in July 2019.

Nizhnekamskneftekhim also expressed its readiness to participate in the construction of a multidisciplinary health centre for all Nizhnekamsk citizens.

First Tatarstan President Mintimer Shaimiev noted in 2007 when NKNK was getting ready to celebrate its 40^th anniversary: “Nizhnekamskneftekhim is the pride and leader of not only the republican economy but also the Russian Federation in general. Despite the cataclysms and difficulties of the previous years, first of all, the transition to the market economy when direct links that took years to be established were broken and there was a chronic crisis of mutual payments, it became possible to not only save but also multiply the positions of the flagship of Russian petrochemistry that keeps actively developing and launching new plants today as well”.

Another 13 years have passed. The complex is effective and continues consecutively pursuing the development strategy with the strong team named TAIF Group playing a significant role in the fate of not only Nizhnekamsk but also Tatarstan, Russia.

Stable operation is the best in today’s economic situation

This especial year — the jubilee for both Tatarstan and TAIF Group — also became a time of serious trials for the republic, Russia and the whole world, for many sectors, including petrochemistry. The new COVID-19 virus seized the planet. It appeared for the first time in the Chinese Hubei Province late last year, and the WHO declared a pandemic in March 2020 already. The incidence around the world has exceeded 24 million people, over 800,000 have died. The epidemic in Russia has affected all regions. The number of cases is nearing a million. There were taken unprecedented measures to impede the epidemic from spreading. Moreover, at the beginning of the pandemic President Vladimir Putin stressed that non-stop enterprises shouldn’t stop by intensifying safety measures.

Nizhnekamskneftekhim PJSC as well as other enterprises of TAIF Group took and keep taking measures to stop the spread of the coronavirus infection. Every employee of the complex is provided with antiseptics and individual protection gear — gloves and masks from nonwoven fabric made of polypropylene manufactured at NKNK. And Nizhnekamskneftekhim’s subsidiary Polymatiz JSC produces the nonwoven fabric for masks the republic and Russia in general lacked very much, especially at the beginning of the pandemic.

Russia has a few enterprises of this kind, and during the pandemic, the amount of fabric production for medical masks, surgical coats and hazmat suits increased ten times. Nizhnekamskneftekhim purchased an automated line in Tianjin to make single-use medical masks. It was assembled as soon as possible and was the first to reach the installed capacity of the line in the Republic of Tatarstan. Nowadays hundreds of millions of masks have been made. The investments totalled about 9 million rubles. The production is still at its maximum capacity. Nizhnekamskneftekhim handed over hundreds of thousands of masks to health care and public organisations to fight the coronavirus as a charity event.

During the pandemic, NKNK plants have produced polymers that are necessary to make special and medical equipment, machinery, transport. The enterprise also developed and got a licence for a formula of disinfectant based on the WHO’s recommendations, its production was set up.

“In today's economic situation, the best thing is stable operation of enterprises,” stressed Rustam Minnikhanov during his visit to Nizhnekamskneftekhim at the height of the pandemic. He noted the effectiveness of the measures taken to provide the staff’s safety and thanked the petrochemists for the honest work amid the epidemic. He thanked not only them but also WTP-NKNK employees who continued providing the population and enterprises of the republic’s third-biggest city with clean potable water as well as workers of Nizhnekamskneftekhim’s treatment facilities servicing not only the complex and a number of other enterprises but also the whole city.

Having deployed all effort and resources, Nizhnekamskneftekhim together with other companies of TAIF Group daily keep solving hot-button, topical and important problems for Tatarstan and Russia. Throughout its more than half-a-century-old history, Nizhnekamskneftekhim was and is still one of the backbone enterprises of Russia’s gas and petrochemical complex. Nizhnekamskneftekhim keeps successfully and effectively achieving goals and performing tasks of becoming a reliable foundation of the country in import substitution and economic and strategic safety of the country set as early as the 1960s at the dawn of the creation of the complex joining effort with other TAIF Group companies, it conducts the mission it was given developing and improving according to the dictates of the time and market.

History of Nizhnekamskneftekhim: fateful decisions, struggle for world market and strengthening the position. Part 1.