TAIF Group finishes 2021 with one of the best results in its history
TAIF Group companies have summed up the financial and economic performance in 2021 and for more than 30 years of activity. Part two
The material is prepared on the basis of the Annual Review of the TAIF Group's activities and summary results for 1995-2021. Almost the entire previous year — until the signing of the agreement on the merger of the petrochemical and energy assets of TAIF Group and SIBUR Holding PJSC, TAIF Group worked in its former perimeter, and therefore the annual review, on the basis of which this material of Realnoe Vremya is prepared, was formed in the form of a single document combining brief summary balanced production and economic and financial results of TAIF Group JSC and UK TAIF Group JSC for the entire year 2021 and the period of activity since 1995 as joint results of TAIF Group. Part two.
3,7 million tonnes of petrochemical products
This is the total volume of commercial products produced and sold last year by Nizhnekamskneftekhim PJSC and Kazanorgsintez PJSC. The main share is accounted for by plastics and synthetic rubbers in demand by domestic and foreign markets.
In 2021, the Group's enterprises produced 2,219 thousand tonnes of polymer products. This is more than a five—fold increase to the level of 1995, when only 443 thousand tonnes of products were produced a year.
Nizhnekamskneftekhim PJSC is not only the largest producer of synthetic rubbers in Russia but also occupies a significant share of the global petrochemical market. Kazanorgsintez PJSC is the only manufacturer of polycarbonates, savylene and many innovative grades of polyethylene in Russia.
Throughout Russia, the expansion of the capacities of TAIF Group's petrochemical industries plays a significant role. For example, in the period from 1995 to 2021, the production of rubbers in the country doubled, and all this increase was fully provided by TAIF Group (by types of products produced by TAIF Group).
In general, the range of monomeric and polymer commercial products manufactured at Kazanorgsintez PJSC and Nizhnekamskneftekhim PJSC currently includes 617 brands. And this list constantly expands.
By the results of 2021, TAIF Group's net revenue in the field of chemistry and petrochemistry amounted to 377,8 billion rubles, EBITDA — 97,8 billion rubles. The figures significantly exceed the results of 2020 — this is the result of the effective work of the entire many thousands team of Group's companies, the mobilisation of all resources to ensure the most efficient operation of enterprises during the pandemic crisis, as well as the efforts made by the Group's companies to increase the pace of implementation of strategic programmes.
By the results of 2021, the enterprises of TAIF Group produced 1,183 thousand tonnes of ethylene. Relative to 1995, the production growth was 2,2 times. In the future, after the commissioning of the liquid hydrocarbon pyrolysis complex under construction with a volume of up to 2 million tonnes a year — EP-600, ethylene production volumes will increase by another third — up to 1,800 thousand tonnes a year.
Throughout its history, TAIF Group has constantly invested in the development of existing and the creation of new chemical and petrochemical facilities, increasing the conversion rate and expanding the range and volume of products.
Over the period from 1995 to 2021, the total amount of funds invested in the modernisation of its own chemical and petrochemical industries exceeded $12,4 billion. Over 60 large-scale projects and a number of relatively smaller ones have been implemented.
In January 2021, Nizhnekamskneftekhim PJSC commissioned the industrial unit for the production of divinyl-styrene synthetic rubber intended for the production of high-tech so-called “green” tyres. Within six months, four new brands of synthetic rubber of the fifth generation were mastered: DSSK-610, DSSK-615, DSSK-621, DSSK-628. The samples are underwent practical testing in the world's leading tire companies.
Since last year, Nizhnekamskneftekhim PJSC has also been represented in the segment of production of styrene-butadiene-styrene thermoplastics, which are in demand as a plasticizer for road construction, as well as in the production of high-quality roofing materials.
Last March, the production of lithium polybutadiene of the SKD-777 brand, focused on use in the manufacture of premium segment tyres, was also started.
In 2021, according to the strategy for the development of the petrochemical industry of the Russian Federation and Tatarstan, TAIF Group enterprises continued the implementation of major investment projects. In particular, one of the largest in the history of TAIF Group is the construction at Nizhnekamskneftekhim PJSC of the new pyrolysis complex of liquid hydrocarbon raw materials with a volume of up to 2 million tonnes a year, where monomer products will be produced, including 600 thousand tonnes of ethylene a year for subsequent conversion into high-quality petrochemical polymer products with high added value.
At the Polycarbonate Plant of Kazanorgsintez PJSC last year, the bulk of work was carried out to increase the capacity of polycarbonate production from 65 thousand to 100 thousand tonnes a year. One of the first in the world, and the only one in Russia, it operates on an environmentally safe phosphorless technology using CO2 as one of the raw materials.
At the beginning of November 2021, the innovative, all-Russian production of polycarbonates, created by the efforts and thanks to the experience of the group of TAIF specialists and the company's partners, was appreciated by the country's leadership: Prime Minister Mikhail Mishustin presented the 2021 government prize in the field of science and technology to the group of developers. The ceremony took place in December 2021 in Moscow: at the Government House of the Russian Federation, the award was presented by Prime Minister of Russia Mikhail Mishustin.
Part of the development team was honoured in Tatarstan: in the reception hall of the Kazan Kremlin, they were congratulated by President of the Republic Rustam Minnikhanov.
At the Bisphenol-A Plant of Kazanorgsintez PJSC, the work continues on the modernisation of isopropylbenzene production: the first stage of the alkylation unit construction has been completed.
4 billion US dollars — for the development of energy
It was TAIF Group that in the first decade of the 21st century became one of the initiators of the launch in Tatarstan of a large-scale programme for the modernisation of the republic's energy economy, with the introduction of world practices and technologies of efficient energy generation. At that time, the most difficult transition was made from subsidising energy to transparent and effective tariff-setting mechanisms. For the period from 2010 — the time of the creation of the Group's own generating company — TGC-16 JSC and by the end of 2021, TAIF Group's revenues from the activities of the energy complex increased by more than six times, from 9,8 billion to 60,9 billion rubles.
At the same time, the efficient operation of TGC-16 power plants allows providing an average annual price from sources lower than the industry average. In 2010, the average annual price of thermal energy from TGC-16 JSC was by 17% lower than the average annual tariffs of producers in Russia. To date, the level of tariffs has been maintained at the same level as in 2010, which is by 37% lower than the average annual tariffs in Russia.
TAIF Group invested about $4 billion in the creation of TGC-16 JSC and the development of its own sources of thermal and electric energy.
During this time, the total installed capacity of TAIF Group's energy sources was increased from the previous 1,339 MW to 1,745 MW, and electricity generation increased by 1,7 times. It has the main share in the company's revenue structure — 62% of the total. The output of thermal energy for the same period increased by 1,2 times and amounted to 18,9 million Gcal in 2021.
The increase in the volume of generation and release of electric and thermal energy, even while maintaining tariffs at the level of 2010, made it possible to increase the income level of the generating company by 13% in 2021. In particular, revenues from the sale of electricity and capacity increased by 16%, as well as revenues from the sale of thermal energy increased by 7%. Thanks to the tariff policy of TGC-16 JSC, Tatarstan consumers saved more than 9 billion rubles in 2021 alone, including about 8 billion rubles by TAIF Group's enterprises, and about 1 billion rubles by heat supply organisations that purchase thermal energy for transportation to end consumers and the population.
The technical policy carried out by TGC-16 JSC to optimise the loading of equipment and the introduction of the combined cycle of energy production, has significantly reduced the specific reference fuel consumption (URUT) per unit of electrical energy supply.
In general, for TGC-16, the URUT indicator in 2021 was 255,5 g/kWh (for comparison, the average in Russia by the end of 2021 is 306,5 g/kWh).
Kazan CHPP-3 is considered one of the most efficient in the country by this indicator. Back in 2020, the URUT level of 210,8 g/kWh was reached. According to the company, there is a potential for increasing efficiency: by about 2,1 g /kWh when transferring a heat load of about 900 thousand Gcal from the district boiler houses of Kazan to the source of combined heat generation.
2021 is the time of recovery in the fuel market after the pandemic crisis
In 2021, the sales volumes of petroleum products by TAIF Group filling station network increased from the previous 352 thousand tonnes to 373 thousand tonnes. Thanks to the growth in sales of motor fuel, the total revenue of the largest network in Tatarstan, consisting today of 231 gas stations (including 34 multifunctional gas stations selling oil and gas products, as well as one independent gas station) and covering 41 of 43 districts of Tatarstan, as well as six neighbouring regions, reached the maximum in the history of 18,25 billion rubles, which is by 2,05 billion more than in the previous period.
Revenue from the sale of related products, including motor oils manufactured by TAIF-SM, manufactured under the Taif Lubricants brand, also increased in the TAIF-NK filling station network. Russia's only production of base synthetic oils based on polyalphaolefins (PAOM) was launched thanks to the efforts of TAIF Group in Nizhnekamsk in 2020 and can produce up to 30 thousand tonnes a year of commercial oils and up to 9,2 thousand tonnes a year — based on polyalphaolefins.
An interesting fact is that initially PAOM—based lubricants were created for aviation, where the operation of equipment occurs at significant temperature differences — from high plus to serious negative values. This required a special approach to the choice of lubricants, and PAOM with a solidification threshold of up to -60 ° C and the ability to maintain working viscosity at high temperatures turned out to be the best choice. Besides, PAOMS retain chemical stability during operation, do not have impurities (sulphur, resins, high-setting paraffins, inorganic components), practically do not evaporate and have high viscosity at high temperatures.
The main nomenclature of PAOM produced by TAIF-SM PLC includes low-viscosity base synthetic oils (PAO-2 — PAO-12). In 2021, a new line of medium- and high-viscosity PAOM was introduced (PAO-20, PAO-40, PAO-100 and PAO-1000).
TAIF-SM PLC sells finished products both on the domestic market and for export. TAIF Lubricants have confirmed the high level of quality, having received official approvals from the automakers such as Mercedes-Benz, Volvo, Renault, VAG and MAN. TAIF Lubricants oils for passenger car engines and commercial vehicles are licensed by the American Petroleum Institute (API — American Petroleum Institute), which emphasises the compliance of products with modern international requirements. In addition to motor oils, the company produces more than 250 types of oils for industrial (petrochemical, machine-building, metalworking, etc.) capacities of the Russian Federation. The company actively expands its distribution network, covering the home region — the Volga Federal District, as well as the Central, Southern, Northwestern and Ural districts. The company also has foreign partners who are engaged in the promotion of products in the EAEU countries, the CIS, the Baltic States, the states of Asia, Africa, Latin America and the Middle East. The revenue of the young company by the end of 2021 amounted to 972,6 million rubles.
From airplanes to construction
TAIF is a multidisciplinary investment group whose interests are not limited to oil and gas processing and petrochemistry. One of the most important areas of activity is investment and financial services provided by both TAIF JSC itself and TAIF-INVEST PLC, an investment company that is a professional participant in the securities market, a member of the National Association of Stock Market Participants (NAUFOR) and has all the licenses necessary to carry out professional activities, including for conducting trades on the site of Moscow Exchange PJSC.
Almost from the very moment of its foundation, TAIF Group accepts active participation in the implementation of large-scale republican construction programmes and projects. It is no coincidence that back in 2004, the company was awarded the All-Russian Award “Russian Creators” — for outstanding contribution to the development of the construction industry in Russia.
TAIF does a lot of work not only on the construction of new buildings, but also in the field of preserving the historical and cultural heritage of Tatarstan. Thanks to the contribution and participation of the Group, such historical and cultural objects as the Kekin House in Kazan, the complex of state-owned buildings on the island-city of Sviyazhsk, as well as the Bulgarian Islamic Academy, the Kol Gali hotel complex in Bolgar, the Cathedral of the Kazan Icon of the Mother of God, Piramida Shopping Mall, the administrative building of the UGIBDD and The Pension Fund in Kazan, the field hockey centre, the women's gymnasium No. 12, the Ekiyat puppet theatre, the new building of the KFU Chemical Institute and many other facilities.
It was with the direct participation of TAIF in Tatarstan that the presidential programme for the elimination of dilapidated housing, unprecedented for post-perestroika Russia, was launched and implemented.
Meta-TAIF PLC and TAIF-ST PLC have built more than 2 thousand apartments as part of this programme. Besides, dozens of multi-storey residential buildings have been erected by third-party construction companies engaged by TAIF Group to perform this work. Finally, according to social mortgage programmes and an additional housing programme, for the period 2005-2021, employees of TAIF Group received 6,812 apartments (this is over 415 thousand square metres).
One of the leaders of Russian business aviation, Tulpar Air, is also developing under the wing of TAIF.
Confirmation of the high reliability, safety and efficiency of the airline's activities is not only the revenue volume that has grown to 1,3 billion rubles by the end of 2021 (this is a 75% better result than a year earlier), but also the growing own fleet of aircraft, as well as the fact that Tulpar Air has been entrusted with the operation of third-party aircraft customers and the number of commercial flights for third parties is increasing.
Joining forces
The merger of the country's largest petrochemical giants — TAIF Group and SIBUR Holding PJSC — is the result of many years of joint work, painstaking work and detailed studies by both sides of the transaction. This event is of great importance for the further development of the chemical and petrochemical industries of Russia as a whole. In the Agreement on the Creation of the Merged Company, SIBUR's shareholders and management guaranteed the fulfillment of their obligations for the full implementation of all projects included in the Strategic Development Programme of SIBUR until 2030, including in the amount of 1,8 trillion rubles for the development of Tatarstan companies that entered the perimeter of the Merged Company in 2021. One of the key conditions of the agreement was the preservation of the tax base in the republic for the enterprises included in the merged company and the continuation of their participation in social projects of Tatarstan.
As Ruslan Shigabutdinov emphasised: “I am sure that the rich practical experience, pooling of resources, joint work of TAIF Group and SIBUR Group in solving a wide range of tasks will give maximum effect for the full and speedy implementation of investment projects of the Strategic Development Programme of TAIF Group until 2030, and all the agreements of the parties will be implemented. Together, we will continue to do everything possible for the economic development and increase the investment attractiveness of Tatarstan and Russia, the formation of favourable and maximally comfortable living conditions, as well as the growth of the well-being of the inhabitants of our country.”