Results of Kazanorgsintez in 2015: threefold profit and continuance of modernization
One of the largest Russian polyethylene producers finished the year with a gain against a background of a clear economic decrease and fall in the industrial production. According to the results for last year, Kazanorgsintez increased its net profit more than threefold. The enterprise also defined its development strategy. Studying the annual statement of the company, Realnoe Vremya analyzed its end-year results.
Prices helped
'The last year and as well as all previous years was uneasy for the enterprise,' director general of the company Farid Minigulov notes. Lack of gas raw stock, below capacity production of polyethylene did not allow to significantly augment the annual production volume, but, nevertheless, the production programme was carried out, and Kazanorgsintez fulfiled all tasks set by its shareholders for 2015.
In the director general's opinion, the reduction of cost reduction, active work with consumers plus a positive conjecture on domestic and foreign markets enabled to improve financial results in comparison with 2014. Net profit was a record: it increased threefold from 6,11 to 19,29bn rules. Its revenue increased by 26% — to 68,59bn rubles. Such a growth is partially explained by high prices for all types of products of Kazanorgsintez PJSC. Ethylene polymers and copolymers (74,6%) and polycarbonate (12,9%) account for the biggest share of the profit.
The growth of capitalization is the evidence of the effectiveness of the work of Kazanorgsintez – it increased almost 2,4 times to 60,5bn rubles. A twofold rise in its equity capital demonstrated a high financial stability of the company – from 17,76 to 35,19bn rubles. The enterprise produced goods equal to 68,80bn rubles, which is 27,2% higher than the indicator for 2014.
Kazanorgsintez annually produces and sells over 170 types of chemical products: ethylene, polyethylene, polycarbonate, polyethylene pipes, bisphenol, phenol, acetone, ethylene glycol, ethanolamine and other organic chemicals.
According to Farid Minigulov, the good results allowed to successfully pay off current loans. In 2015, 9,7bn rubles were expended to pay off them, including 5,9bn rubles to pay off Eurobonds. As from 31 December 2015, current loan arrears reduced to 12,462bn rubles.
The high financial indicators gave it an opportunity to increase an average salary by 9,2%. It was equal to 41,464 rubles in 2015.
Export increased
In 2015, Kazanorgsintez sold products to about 1,000 consumers from 26 countries. Azerbaijan, Greece, Georgia, Northern Ireland and Hungary became new markets for export.
Kazanorgsintez is still the largest polyethylene exporter. The enterprise significantly augmented its export: products at 12,08bn rubles were sold abroad, it is 34,4% higher than in 2014. Price growth for exported products because of the increase of the currency rate against the ruble was the main influence on the growth of export receipts. Ethylene polymers and copolymers are the main part in the structure of the export – 83,4% (79,6% in 2014).
The sale of products and services in the domestic market totalled 56,51bn rubles, which is 24,2% more than in 2014. Tatarstan (52,7%), Moscow and Moscow Oblast (27,2%) are the main points of sale in the domestic market.
Augmenting capacities
Kazanorgsintez pays a lot of attention to preservation of stable work in acting factories, increase of the production of goods, reduction of energy intensity of production within the scope of its own development strategy. According to Farid Minigulov, in 2015, about 6,1bn rubles were expended on the financing of sites of major construction work, substitution of old equipment, cars and special vehicles.
The work on the execution of the plan of the main investment events of Kazanorgsintez PJSC for 2013-2016 on stabilization of its activity and maximum load of production capacities was carried out.
A new high selective Technip double-chamber furnace of ethane pyrolysis was launched in E-500 block of Ethylene Plant last year in December instead of obsolete and worn out furnaces. Full automation and high selectiveness are the advantages of the new furnace: it is possible to produce more ethylene using the same quantity of ethane, this growth will make up 12,000 tonnes per year. The project on the renewal of ethylene production is going on. Feasibility study on the substitution of propane-butane furnaces for the first stage of Ethylene Plant began.
A new Coperion blending unit was put into operation in Polyethylene Plant. It allowed to completely refine the basic product manufactured in A reactor and to have a more popular and competitive low-pressure polyethylene composition for production of pipes. The production of high demand and competitive product for pipe manufacture is up to 50%. Now it is the largest production of bimodal HD PE pipes 100 in Russia with a capacity 240,000 tonnes.
As a result of works on the substitution of Pb catalyst with titanium in Polycarbonate Plant, they managed to reduce the consumption rate of the main raw material, decrease by-product yield and reach a significant economy of energy resources.
Effective power engineering
The director general of Kazanorgsintez PJSC emphasizes that maintenance of stable work in active factories, reduction of consumption of energy resources, elimination of causes of raw material loss, waste of energy resources when an unscheduled suspension of production takes place, the increase of production of commodities are the priority to increase the effectiveness of the enterprise. Annual measures taken on the reduction of consumption indexes on raw material and energy resources save hundreds of millions of rubles, which was equal to almost 1bn rubles per year in 2015.
Kazanorgsintez PJSC created and approved a Long-Term Energy Saving and Energy Effectiveness Programme for 2011-2015 and till 2020. The economic effect of the action of the programme totalled 192m rubles for 2015. A five-year economy made up over 780m rubles.
It is planned to add some measures to the programme aimed at implementation of energy saving and energy effective equipment and materials, which allow to reduce the consumption of steam of the exterior source – CHP-3 of Kazan – and increase their own steam generation in 2016 and 2017. Moreover, they plan to continue the substitution of obsolete and worn out old bulbs with energy saving and LED bulbs in departments of the enterprise.
1m tonnes of polyethylene per year
Last year, the enterprise prepared its development concept till 2025. It consists of two stages. The first stage is till 2020 and includes a construction of a new unit for ethylene production, modernization of B reactor of the current HD Polyethylene Plant, construction of a new LD polyethylene unit and creation of their own Benzene Plant.
As a result of the realization of the projects, ethylene capacities of the enterprise will increase to 1m tonnes per year, there will be a modernization of the current and construction of new units for polyethylene production. So, the total polyethylene production will exceed 1m tonnes per year. Their own benzene production will allow to provide a stable provision of this raw material for its further processing and increase the profitability of the end product manufacture – polycarbonates.
The second stage of the development programme till 2025 presupposes a realization of projects on creation of production of construction materials and special-purpose polymers based on a deeper conversion of products made by Kazanorgsintez. Feasibility study of the planned projects for further elaboration of the investment programme based on the concept is carried out.
