Rustam Minnikhanov about Kazanorgsintez: ‘It is one the most modern petrochemical enterprises in our country’
The first point on the list of the Orgsintez strategy – the own production of benzene
Despite all the difficulties with raw material supplies and the capacity utilization, Kazanorgsintez showed good results in 2015. Three times more funds will be allocated for dividends than in 2014. Payments on common stocks have increased from 1.01 rubles to 3.23 rubles. All results in details were discussed on 22 April at the annual general meeting of shareholders of the company. RT President Rustam Minnikhanov has highly appreciated the work of KOS and promised that the Republic's leadership and the government will support the implementation of the company's future plans.
The production programme has been fully fulfilled
The meeting started as usual with the report of the Director General of Kazanorgsintez PJSC Farid Minigulov. He noted that the lack of gas feedstock and incomplete capacity utilization at the production of polyethylene have not allowed the company to increase significantly the annual production volumes. Nevertheless, the production programme has been fully fulfilled.
By reducing the production costs, the positive pricing environment in domestic and foreign markets, the company has even improved the financial results in comparison with 2014. So, in 2015, they sold the products at 68.599 billion rubles, which is by 14.117 billion, or by 26% more than in 2014. The volume index amounted to 100.4%. Net profit was 19.296 billion rubles, that is 3.2 times more than in 2014.
The representative of the auditor of Kazanorgsintez PJSC — the managing partner of PwC office in Kazan Denis Derevyankin said that PricewaterhouseCoopers has audited the financial statements of Kazanorgsintez. Accounting statements reliably reflect the financial position of the company, the results of its financial and economic activities.
Then, the shareholders were told about what dividends will be paid by the end of 2015. So, for dividends it will be allocated 30% of the net profit, or 5.788 billion rubles. In 2014, it amounted to 1.83 billion rubles. Dividends on preferred shares will be 25 kopecks per share, on ordinary shares – 3.23 rubles per one share (in 2014 — 1.01 rubles). 69.6% of net profit will be used to repay loans and accomplish the investment programme.
Also, at the meeting they elected a new Board of Directors. It still consists of 11 people, but a shareholder Interpetrol SA Naim Muyichich and the Deputy Head for the production and commercial management of TAIF JSC Albert Sulteyev left it. New members of the Board of Directors became the Executive Director of IPCO-TRADING S. A. Milic Zeljko and the managing partner of the law firm Rappoport and Partners Aleksander Rappoport. On the proposal of the President of RT, a new Board of Directors was again headed by Ruslan Shigabutdinov.
The petrochemical complex is the locomotive for the economy
The President of Tatarstan in his speech noted that last year for Kazanorgsintez turned out to be successful, even amid the events that occur in our economy. 'Today it is one of the most modern petrochemical enterprises of Russia and the largest enterprise of the capital of Tatarstan. The most important result of the enterprise, showing its effectiveness, is the net profit. At Kazanorgsintez it rose threefold in 2015. The company has increased tax payments to the budget of the Republic, its capitalization has increased 2.4 times. Good wages — it is also a positive indicator,' said Rustam Minnikhanov.
Despite all the difficulties, Kazanorgsintez continued the implementation of investment programmes. Minnikhanov reminded how in December of 2015 with his participation at the ethylene plant it was commissioned a new highly selective two-chamber furnace of pyrolysis of ethane Technip, a new compounding plant of Сореrion company was commissioned at the plant of production of high-density polyethylene.
The President called the growth of exports of Kazanorgsintez a positive event. It indicates that the company's products are in demand, competitive. A bright example of import substitution, according to Minnikhanov, was the development of new grades of polymers that are produced only here.
The President also reminded that KOS has elaborated a development concept until 2025, under which it is planned to build a new production plant of ethylene, the modernization of existing production of HDPE, the production of construction materials. The company very carefully is implementing these projects.
'The goal of 2020 is to increase revenue to 100 billion rubles, the production volume of ethylene must be at least 1 million tonnes, polyethylene — 1 million tonnes. It is a very difficult task. For my part, I assure that the leadership of the Republic, the government will provide support in the implementation of these plans,' said the head of the Republic.
Rustam Minnikhanov stressed that it is thanks to the development of the petrochemical companies Kazanorgsintez, Nizhnekamskneftekhim, TAIF-NK — they have managed to keep in Tatarstan the industrial production volume, gross regional product, and most importantly, the volume of investments in fixed capital. Now in the Republic this figure has reached 617 billion rubles. Oil and petrochemical industry have put a huge share.
'The prosperity of Tatarstan is largely dependent on the state of our economy. Without a strong industry, the production extension, the growth of quality indicators we would not be able to implement the programmes that are being implemented in our Republic. Development strategy-2030 assumes our petrochemical complex as a point of growth. Today it is crucial. And in the next 10-15 years, it will become the locomotive for the economy of Tatarstan,' concluded the President of Tatarstan.
The plans are clear
At the traditional press conference after the annual meeting, the journalists were interested in the plans of Kazanorgsintez for 2016 and the further development strategy of the enterprise.
'We have no fewer plans this year than in 2015. We even will try to exceed them as we would be able,' said Farid Minigulov. Continuing the theme of investment programmes, the Director General of TAIF JSC Albert Shigabutdinov said that now they are designing and developing new plans. First in line — new own production of benzene.
Rustam Minnikhanov also noted: the big plans of the Republic are connected with new ethylene complex in Nizhnekamsk, they have plans to expand ethylene production in Kazanorgsintez as well. But for this they need to solve several issues. The major one is financial resources. According to the President, the group of companies TAIF is actively engaged in it. The second issue is raw materials supply. 'In terms of raw materials supply, the issue will be solved at the expense of the launch of new capacities TANECO, and we will work with other suppliers. I'm sure we will be able to implement the tasks,' said Rustam Minnikhanov.
Answering the question to Realnoe Vremya about the project implementation period for the creation of the ethylene complex, Farid Minigulov said: 'This year we will be able to announce which technology we have chosen that enables to provide future productions with raw material, including the production of ethylene.'
