TAIF-SM LLC: successful start and ambitious plans
The synthetic oil factory plans to manufacture up to 9,000 tonnes of products in 2021
Russia’s first and the only manufacturer of polyalphaolefins (PAO) TAIF-SM LLC has presented its accounting report for 2020, in which it managed to work only for a month. Read in Realnoe Vremya’s report how successful the start was and what plans the enterprise is making.
Confident start
The complex designed to produce lubricants was built and put into operation in Nizhnekamsk in 2003. At first, the enterprise was a joint venture of Nizhnekamskneftekhim PJSC and Tatneft PJSC. In April 2019, the factory was purchased by TAIF Group. A large-scale modernisation of production, which was carried out in record time, began almost immediately.
In autumn 2020, the complex whose movable and immovable property is assessed at over 3 billion rubles began to be leased by TAIF-SM LLC.
The amount of borrowings taken out against the security (primarily commodity turnover) totalled 211,280 million rubles by the end of the year.
Its own R&D Centre developed formula in cooperation with the world’s recognised additive suppliers (Afton, Lubrizol, Infineum and BASF). By the launch of the production, the assortment of TAIF Lubricants, which is a brand of TAIF-SM products, consisted of more than 170 products presented in all segments of ready oils in Russia:
- motor and transmission fluids for lightweight transport;
- motor and transmission fluids for commercial vehicles, lorries and special machinery;
- industrial fluids for different sectors of the industry.
The first shipping of products took place in December 2020. During the first year of operation, which wasn’t complete, the enterprise’s revenue reached 61,257m rubles, while gross profit is 4,703m rubles.
Net profit is expected in 2021
Net assets in 2020 in general are negative. The company lacks 60,746m. “The costs accompanying the preparation and launch of production of the company explain the negative numbers. The company’s business plan envisages that net profit will be reached in 2021,” TAIF-SM LLC explains.
In 2021, as the company said, TAIF-SM has a large-scale task of launching a new brand in the market. The company is planning to produce and sell over 9,000 tonnes of lubricants and around 9,000 tonnes of Group 4 basic oils (PAO). The polyalphaolefin production capacity nowadays is 10,000 tonnes a year.
Plan: to be in top 10 lubricant producers by 2025
By 2025, TAIF-SM LLC hopes to buy the production capacities it leases. At the moment, the management and staff of the company have short-term but no less serious tasks: by 2024, the factory plans to cross the annual production bar of 20,000 tonnes of oils.
With such indicators, the company that is the first in Russia to set up the PAO production has every chance of being in the top 10 lubricant manufacturers. This will allow cementing leading positions in the premium synthetic oil segment. The capabilities of the equipment that was installed allow expanding the production to 60,000 tonnes of lubricants a year.
To sell the products made, TAIF-SM chose a distribution business model. Nowadays the network has 20 companies in the region — the Volga Federal District as well as the Central, Southern, Northwest and Ural Districts. Foreign partners promote the products in EAEU, CIS, Baltic states, Asian, African, Latin American and Near Eastern countries.
“In 2021, TAIF-SM plans to at least double its distribution network, increase its presence in Siberia, the Far East as well as in Arctic regions,” First Vice Director General of TAIF-SM LLC Sergey Karev told Realnoe Vremya.
The products of TAIF Lubricants will soon be represented in the network of TAIF-NK petrol stations.