October 1 — a year since TAIF and SIBUR merge assets

Exactly a year ago, the landmark deal was closed for the domestic petrochemical industry to combine the petrochemical and energy assets of TAIF and SIBUR

October 1 — a year since TAIF and SIBUR merge assets
Photo: Roman Khasaev/realnoevremya.ru

On October 1, 2021, after receiving the approval of the relevant authorities, a combined company was created on the basis of the petrochemical and energy assets of TAIF Group and SIBUR Holding PJSC, two petrochemical giants of the country. On a global scale, the holding company was formed, which confidently entered the top 5 largest companies in the petrochemical industry of the world. About how the agreements reached in the new perimeter are being implemented and on which projects TAIF Group have concentrated — read in the material of Realnoe Vremya.

On September 24, 2021, the agreement on long-term cooperation between the Republic of Tatarstan and SIBUR Holding PJSC was signed in the Kazan Kremlin. Photo: Roman Khasaev/realnoevremya.ru

September 24, 2021 Kazan Kremlin. Two agreements were signed with an interval of ten minutes. The first is on long-term cooperation between Tatarstan and SIBUR Holding PJSC. The document was signed by Tatarstan President Rustam Minnikhanov and Chairman of the Board of Directors of SIBUR Holding PJSC Leonid Mikhelson. The document clearly defines the areas of cooperation.

Also, in the Kazan Kremlin, an agreement was signed on the final terms of the transaction for the creation of TAIF JSC and SIBUR Holding PJSC of the Merged Company. Photo: Roman Khasaev/realnoevremya.ru

To implement all the agreements reached between the republic and SIBUR Holding PJSC and fixed in the agreement, Albert Shigabutdinov and Dmitry Konov signed an agreement on the creation of the Merged Company in the Kazan Kremlin in the presence of Rustam Minnikhanov and Leonid Mikhelson.

Rustam Minnikhanov on the agreement with SIBUR: “We need to move only forward.” Photo: Roman Khasaev/realnoevremya.ru

“You take on a great responsibility to continue the implementation of investment plans. It is also very important for us that you continue large social projects: in sports, public and social areas. All this is reflected in the agreement signed by us. Then we need to move only forward," Rustam Minnikhanov stressed immediately after the ceremony.

Leonid Mikhelson: “Not only will we not stop the projects started by TAIF, but we will also start new ones.” Photo: Roman Khasaev/realnoevremya.ru

“We will not stop the projects started by TAIF, and this is out of the question. We will start new projects," Leonid Mikhelson, the chairman of the board of directors of SIBUR Holding PJSC, assured.

On September 27, at the central office of TAIF JSC, the shareholders of TAIF and SIBUR signed the main documents on the merger, and in October, after receiving the approval of the relevant authorities for the transaction, the merger process took place.

According to the agreement signed between the Ministry of Energy of the Russian Federation and SIBUR, the company intends to invest up to 560 billion rubles in modernisation and creation of production facilities by 2027. Photo: courtesy of sibur.photas.ru for realnoevremya.ru

Already at the end of January 2022, SIBUR, whose shareholders, according to the agreements reached, included shareholders of TAIF JSC, confirmed the seriousness of intentions for the obligations assumed by concluding the agreement with the Ministry of Energy of the Russian Federation on the modernisation of existing and creation of new capacities at the sites of Nizhnekamskneftekhim, Kazanorgsintez and ZapSibNeftekhim. The total cost of the pool of projects planned for implementation under investment agreements until 2027 was estimated at between 400 and 560 billion rubles.

In the first months of the Merged Company's work, active integration processes, exchange of best practices and experience in the work and technologies used were launched. There have been a number of personnel changes and appointments. The composition of the boards of directors has changed. Some of SIBUR's top managers headed productions in Tatarstan, and a number of representatives of the former TAIF leadership took the helm of important areas in SIBUR.

Timur Shigabutdinov headed the production of synthetic rubbers of the Merged Company. Photo: Roman Khasaev/realnoevremya.ru

For example, Timur Shigabutdinov, who held the position of Deputy General Director — Commercial Director of Nizhnekamskneftekhim PJSC from 2016, headed the newly created structure — the production of synthetic rubbers of the merged company — in early December 2021. Ruslan Gizzatullin became a member of the Management Board — Managing Director of SIBUR PLC — curator of issues of improving reliability and energy efficiency, as well as digitalisation of production processes of the entire merged company. In April 2022, at the Tatarstan International Forum on Energy and Energy Efficiency, he announced SIBUR's plans to create a Competence Centre in Tatarstan.

In April 2022, Ruslan Gizzatullin announced the plans of the Merged Company to create an energy competence centre in Tatarstan on the basis of TGC-16 JSC. Photo: courtesy of president.tatarstan.ru for realnoevremya.ru

“At the moment, several competence centres are being formed in SIBUR Group at once: this is the plastics competence centre, and the rubbers competence centre. Due to the fact that the TGC-16 enterprise has joined SIBUR, a decision has been made to develop a competence centre in the field of energy on its basis," he noted.

Despite the ever-increasing geopolitical situation and the growing unprecedented sanctions pressure on the Russian economy, the parties, as stated at the signing of the agreements, continue to implement the Strategic Development Programme adopted by TAIF Group in the former perimeter.

On the basis of Nizhnekamskneftekhim PJSC, the creation of the first and only largest complex of pyrolysis of liquid hydrocarbons from oil in Russia, CIS countries and Eastern Europe continues.­ The complex at the existing and newly created facilities will annually process up to 2 million tonnes of raw materials into a wide range of high-quality polymers in demand.­ The construction of the EP-600 ethylene complex is the largest investment project of the TAIF Group's Strategic Development Programme, and now the Merged Company for the period up to 2030.

In confirmation of Leonid Mikhelson's September words about the readiness of the Merged Company not only to implement the agreed projects, but also to launch new ones, another project is being prepared at the Nizhnekamskneftekhim site — the construction of the hexene production plant. This was announced at TatOilExpo 2022 by Mikhail Karisalov, the chairman of the management board and CEO of SIBUR PLC.

Mikhail Karisalov told about the plans for the construction of hexene production. Photo: Maksim Platonov/realnoevremya.ru

“The basic raw material for this production is ethylene. This capacity is included, on the one hand, in the ethylene consumption chain for ethylene capacities under construction at Nizhnekamskneftekhim and the creation of an even larger volume of processing of hydrocarbon raw materials into ethylene for subsequent processing. On the other hand, it is not only ethylene consumption, but also its own technological independence in the polymer production cycle," Mikhail Karisalov noted. And within the framework of the same forum, a landmark agreement was signed: the Merged Company represented by Nizhnekamskneftekhim PJSC and Alabuga SEZ agreed to work together to create the Ethylene 600 Industrial Park in Nizhnekamsk.

Nizhnekamskneftekhim PJSC and Alabuga SEZ have agreed to work together to create the Ethylene 600 Industrial Park in Nizhnekamsk. Photo: Maksim Platonov/realnoevremya.ru

“These agreements have become another stage in the implementation of the agreement signed a little less than a year ago between SIBUR and the Republic of Tatarstan, and separately outlines a block of obligations related to investment projects. Today, it is very important to develop infrastructure for medium-tonnage chemicals and its derivatives, such projects have great potential. And Alabuga has serious experience in creating world-class infrastructure and, we are sure, it will help to uncover it," said Igor Klimov, CEO of Nizhnekamskneftekhim.

At Kazanorgsintez PJSC, where, after joining the Merged Company, the issue of supplying sufficient volumes of the necessary raw materials was resolved, the production of isopropylbenzene at the Bisphenol A plant is being modernised and the work is underway to increase the production capacity of polycarbonates to 100 thousand tonnes a year. At the beginning of November 2021, the polycarbonates production, which has all-Russian significance, created by the efforts and thanks to the experience of a group of TAIF specialists and partners of the company, was appreciated by the country's leadership: at the Government House of the Russian Federation, Prime Minister Mikhail Mishustin presented the government prize in science and technology to the development team. Part of the development team was later honoured in Tatarstan.

At the end of December 2021, a group of developers of environmentally safe polycarbonate production in the Kazan Kremlin was honoured by the president of Tatarstan. Photo: Roman Khasaev/realnoevremya.ru

Together with the active work on the implementation of projects in the Merged Company, the attention of the shareholders of TAIF JSC is focused on the development of enterprises that have not entered into the deal with SIBUR. TAIF Group includes 17 companies today. One of the highlights of this year was the full launch of the HRCC, which was put into operation at the end of 2021.

In December 2021, the HRCC received a permit for commissioning. Photo: Roman Khasaev/realnoevremya.ru

The level of selection of light oil products at TAIF-NK JSC, which is successfully developing in the perimeter of TAIF JSC, exceeded 90%. Maksim Novikov, the director general of the oil refining complex, told the president of Tatarstan about this at the site of one of Russia's largest forums in the field of oil, gas and petrochemistry, as well as the petrochemical exhibition TatOilExpo 2022, held at the Kazan Expo International Exhibition Centre in August 2022.

TAIF-NK JSC is the only company in the world that processes heavy oil with an output of more than 90% of high-quality light oil products from a tonne of raw materials. Photo: Maksim Platonov/realnoevremya.ru

“In August, this figure was already 93,5%. This is the best indicator in the world. There are no such units where heavy oil is processed, with the achievement of such a level of selection of high-quality light oil products anywhere else," Maksim Novikov stressed.

TAIF Group's companies are distinguished by deep integration. Thus, TAIF successfully sells a significant part of high-quality gasoline and diesel fuel of the Euro 5 standard through its own — the largest in Tatarstan and continuing its development network of filling stations — TAIF-NK AZS PLC. The network continues its large-scale rebranding. The modern look of the gas station, the high quality of the fuel sold from the manufacturer, an attractive system of discounts and incentives, as well as large-scale promotions attract an increasing number of visitors.

Volume of TAIF-NK JSC fuel sold by TAIF Group AZS network is growing. Photo: Maksim Platonov/realnoevremya.ru

On the shelves of specialty stores at TAIF-NK gas stations, you can also buy high-quality engine oil produced under the Taif Lubricants brand. Part of TAIF Group, the only Russian production of basic synthetic oils based on polyalphaolefins (PAOM) is actively expanding the range of products, successfully replacing imported brands that have left Russia with domestic brands. The company is conquering domestic markets and preparing to conquer new niches.

Taif Lubricants is conquering domestic markets and preparing to conquer new niches. Photo: Roman Khasaev/realnoevremya.ru

In August 2022, the president of Tatarstan held a meeting with the leadership of TAIF Group. At it, Rustam Minnikhanov noted that he was monitoring how the Merged Company implemented projects in Tatarstan that started as part of the implementation of the Development Strategy adopted by TAIF in the former perimeter.

Rustam Minnikhanov noted that he is monitoring the implementation of the TAIF Group and the United Company's Development Strategy. Photo: courtesy of president.tatarstan.ru for realnoevremya.ru

“The investment program of TAIF Group is projects of strategic importance not only for the Republic of Tatarstan, these are projects of federal significance," said Rustam Minnikhanov. “First of all, I would like to draw attention to the ongoing project of creating the new olefin complex — EP-600 in Nizhnekamsk, to the project completed last year for the production of DSSK rubber for 60 thousand tonnes a year, increasing the production of polycarbonates at Kazanorgsintez, and of course, the construction of new energy capacities in Nizhnekamsk and Kazan. It is worth noting a big step to launch last year the Heavy Residue Conversion Complex at TAIF-NK, he said.

Both TAIF Group in the current perimeter and the United Company pay great attention to the implementation and support of social projects. Photo: Roman Khasaev/realnoevremya.ru

Besides, both TAIF Group in its current perimeter and the Merged Company also pay great attention to supporting and continuing financing of professional sports teams and amateur sports, and large-scale charity work is carried out: both targeted support and major projects are being implemented. Both companies are extremely responsible about the issues of respect for the environment — many millions of rubles are allocated for the implementation of eco-projects. One of the most important components of the social responsibility of both TAIF Group and the Merged Company, as well as their serious contribution to the development of the economy of the Russian Federation and the Republic of Tatarstan is the timely and full payment of taxes and fees, as well as improving the welfare of their employees, and hence their family members, due to the growth of wages. To all this, as well as openness in dialogue with the general public and ensuring maximum safety of production facilities, and therefore people — not only working for them, but also living in nearby settlements, both TAIF and the Merged Company pay and intend to pay the closest attention in the future.

Arseny Favstritsky