Page 16 - FSUOGM Week 39 2021

FSUOGM INVESTMENT FSUOGM

refinery, TAIF-NK, which provides much of the Crisis passed
feedstock and is not included in the deal with Komyshan says the like everyone else, Sibur has
Sibur. been on a rollercoaster ride in the last year as it
“The shareholders retain control of the oil tried to cope with the coronacrisis and concur-
refinery but there are also long-term supply con- rent economic slowdown.
tracts for the production companies as part of “It hit our margins significantly as some mar-
this deal,” says Komyshan. kets just shut down, but it also created opportu-
And the two companies know each other nities too,” says Komyshan.
well, as Sibur has been one of the main suppliers China is a big customer and was the first mar-
of hydrocarbons to TAIF for years. ket to be hit by the coronavirus (COVID-19)
“TAIF buys liquefied petroleum gas (LPG) pandemic. Komyshan says the game became
from the market and Sibur has been its biggest reallocating the distribution from markets being
supplier for years, so we are already pretty inte- shut down by the lockdowns to others that were
grated as a supplier,” says Komyshan. “That has still working. Distribution was directed away
been part of the logic driving this deal, as both from China to Europe, but as China came out of
sides can see joining forces boosts long-term lockdown the flows of product were redirected
prospects, the security of supply, and our invest- back again as the pandemic wore on.
ment programmes are complementary.” “We have the advantage of being equally dis-
Expanding the investment programme at tant from both Europe and China, so we could
TAIF was a major motivation for the Tatar- shift right and left as the situation changed. But
stan-based company to enter into the deal, for us the challenges of the supply chain manage-
according to its chairman. ment [were] new. And this was at a time when
“One of the key elements of the deal is TAIF our new Zapsib 2 plant had just come online. It
Group's $20bn strategic development pro- was a tense moment,” says Komyshan, referring
gramme,” Albert Shigabutdinov, chairman of to a new facility the company built in Siberia that
TAIF's board of directors said in a statement. bne IntelliNews profiled in the feature “Plastics
“Combine that with the development pro- in the snow.”
gramme that Sibur is already running in Western Other petrochemical plants without Sibur’s
Siberia and the Far East, and it is safe to say that strategic location had a harder time of it and most
the new company will hit its targets. We defi- reduced production, while some shut down com-
nitely have to work hard, but our goal is to create pletely. Thanks to its ability to switch between the
a completely new and strictly performance-ori- big markets in the west and east Sibur managed
ented corporate culture drawing on TAIF's and to keep its production fairly constant.
Sibur’s best practices.” “We couldn't escape the hit to the margins
Komyshan says the two companies don't as prices fell but after a hard second quarter
really compete. TAIF is a bigger player in rub- of 2020, by the third demand was back and in
bers than Sibur, which is not a main focus for the fourth as the vaccines appeared the prices
the company, which only has one rubber plant, began to recover quickly,” says Komyshan. “At
and typically TAIF uses a heavier feedstock than the end of 2020 we managed to still post record
Sibur. TAIF is also heavily into styrene chains, results. Now there are still supply chain disrup-
which is also not a Sibur focus. Where they do tions and a huge increase in the cost of freight
overlap is in polyolefins, but in a complementary but there is also a huge disparity between coun-
way. tries and their costs and prices, which we can
“But that is a big family of products. It allows capitalise on. In the first six months of this year
us to rationalise the production, depending on [we] are already showing better results than in
demand and location, to create a bigger and the same period last year.”
more efficient production,” says Komyshan. Asked if the merger affects the company’s
“Plus we like their investment programme that highly anticipated IPO Komyshan says that the
complements our own very well. We are going company would want to produce a consolidated
to combine the programmes that should lead to set of accounts first, but that is possible using their
more growth.” pre-merger accounts, although it would take sev-
Previously TAIF said the deal would help eral months to prepare. However, as to the timing
accelerate key projects in its 2030 strategic of the IPO the shareholders remain undecided.
development programme that will see more than "Sibur's IPO this year is unlikely, most likely it
RUB1.5 trillion ($20bn) of investments over the will happen in 2022. We will accelerate with this
next ten years. issue," Mikhelson said earlier this year. ™

P16 www. NEWSBASE .com Week 39 29•September•2021