Kazanorgsintez’s revenue exceeds $58.2bn rub

The enterprise has published financial statements for 9 months of 2019

Kazanorgsintez’s revenue exceeds $58.2bn rub Photo: Rinat Nazmetdinov

Kazanorgsintez PJSC has summed up the financial results for 9 months. According to statements according to Russian Accounting Standards (RAS), the company's revenue has exceeded $58,2 billion rubles. This indicator remained almost at the same level compared to the results for the same period last year, showing a slight decrease of 3%. In general, the domestic petrochemical market remains stable. Read the details in the material of Realnoe Vremya.

Pressure from foreign players

Kazanorgsintez PJSC has published the RAS reporting data for 9 months of this year. The company's revenue exceeded 58,2 billion rubles, showing a slight decrease of 3% compared to the results for the same period in 2018. The profit for the first three quarters of this year amounted to 11,7 billion rubles. At the same time, the cost of sales reached 37,1 billion rubles.

Kazanorgsintez has achieved good financial performance even against the backdrop of deteriorating market conditions and dumping by new polymer manufacturers, aggressively entered the world markets over the past year.

Kazanorgsintez has achieved good financial performance even against the backdrop of deteriorating market conditions

Starting from the second half of 2018 and until the autumn of 2019, the Russian polymer market was experiencing serious pressure from foreign players. First of all, it affected the sales of low-pressure polyethylene (HDPE). Since the end of 2018, HDPE producers from Turkmenistan have entered the domestic market, and in the spring of 2019 — from Azerbaijan. This happened against the background of the global fall in HDPE prices. The aggressive pricing policy in the European market of producers from the United States contributed to deterioration of the situation.

Expert analyst at FINAM JSC Alexey Kalachev drew attention to the pressure on the thermoplastic market from the dumping of manufacturers from China and developing countries. According to him, such pressure will be noticed mainly by the markets of developing countries, and the states with developed economies will demand higher standards of the quality of raw materials.

It should be noted that from the second half of 2018 the world prices for polycarbonates were also declining. They stabilised only by the autumn of 2019.

The development of world petrochemistry market

Petrochemistry is being developed intensively across the world. In Europe, Germany remains an active leader in coke chemistry, petrochemistry and gas chemistry. The US are implementing or planning to launch 310 petrochemical projects worth $185 billion, Igor Nasirov, the director for development of Electrolysis and Polymer Technologies and Oil Refining and Petrochemistry of Thyssenkrupp Industrial Solutions (RUS) said in an interview with dprom.online. At the same time, America focuses on the production of polyethylene and polypropylene. ZapSibNeftekhim is also to be commissioned soon in Russia.

In general, the domestic petrochemical market remains stable: the volume of production of polyethylene of various brands over 9 months of this year amounted to almost 1,35 million tonnes, which is slightly more than 9 months of the previous year (just over 1,34 million tonnes).

Aleksey Kalachev, expert analyst at FINAM JSC:

“In general, the growing market of thermoplastics in the export direction will be constrained by an increasingly acute environmental agenda, which imposes new requirements on polymer raw materials. The demand for packaging materials will increasingly shift towards biodegradable plastics as well as recyclable plastics.

I think, with an eye on exports to developed countries, manufacturers should rely on materials with tailor-made properties, taking into account the environmental component of demand.

The Russian market of thermoplastics correlates with foreign one due to the high share of export sales. Although average prices for standard thermoplastics have been declining this year, they have remained above the level of the year 2017. I believe that in 2020 the market will continue to consolidate in the range of average prices for standard thermoplastics 90-110,000 rubles a tonne.

The emphasis on HDPE new grade

In the context of the changing situation in the polymer market, Kazanorgsintez continued to diversify its product line. Back in 2018, the company received an international certificate of conformity ISO 9080 for the brand of low-pressure polyethylene PE2NT11-9, which in 2019 opened new markets for this product. And in April 2019 brought to market two brands of metallocene linear low-density polyethylene (LLDPE). Currently, it is one of the most popular polymers among manufacturers of end products.

In April, the company launched two brands of metallocene linear low-density polyethylene. Photo: Rinat Nazmetdinov

The first sales showed a high demand for LLDPE, and buyers gave the most positive feedback about the products of Kazanorgsintez. As a result, the company has already exceeded the previously planned production and sales of metallocene polyethylene. At the moment, Kazanorgsintez is the only producer of LLDPE in Russia.

By Ekaterina Gumarova
Tatarstan