Russia’s Sibur to complete new PP plant by Q3 of 2012

Sibur said the delayed project, at the premises of subsidiary Tobolsk-Neftekhim, which is based in the Tyumen region of western Siberia, would be well positioned to export product to the European market once it comes on stream.

The company's CEO, Dmitry Konov, said Sibur had cheap feedstock advantages over European producers, while also competing effectively with Middle Eastern exporters, which he said would need to raise prices to recoup the high capital expenditure costs of polyolefins expansions in the region.

Konov said it was inevitable that some established crackers’ downstream production in western Europe would close under the pressure of cheap imports from the Middle East and Russia.

European chemicals producers were seen as more financially fragile after having severed links with oil majors, and they were less able to handle the economic downturn, Konov said.

Konov said the highly leveraged companies suffering during the financial crisis would leave holes in the market for Sibur to move into, adding that there would be good opportunities for Sibur to expand its market share in eastern Europe. The company was currently operating its PP plants at full capacity, he said.

Separately, Sibur's planned polyvinyl chloride (PVC) plant at Nizhy Novgorod has been delayed further and was now expected to come on stream in the second quarter of 2013.

Konov said Russian PVC demand would benefit from the domestic construction sector, which was expected to show strong growth over the next decade. “Demand will come back, but later than we thought,” he said.