Page 19 - RusRPTJul22

become medical products, films or packaging, while elastomers can be used to make car tyres.
Until recently, the most profitable product was liquified petroleum gas (LPG), a cheaper alternative to petrol in cars. Sibur exported more than 3mn tonnes per year (tpy) of LPG until Konov and his team decided that they could add more value by processing LPG and naphtha into plastics.
Sibur also forged a number of international joint ventures under Konov’s stewardship, including with Chinese state-owned energy giant Sinopec, Belgium’s Solvay Group and India’s Reliance Industries. Sinopec bought into one of Sibur’s synthetic rubber plant in Krasnoyarsk, while a PVC plant near Nizhny Novgorod is a collaboration with Solvay Group.
Sinopec and China’s Silk Road Fund each bought a 10% stake in the company in 2015 and 2016 respectively. This was followed by a $500mn eurobond issue in September 2017, giving it ample funds to ramp up production.
Over the last decade, Sibur has spent more than $21bn upgrading existing production facilities and building new ones. Most notably, the company built a polyethylene and polypropylene facility called ZapSib in Tobolsk. In 2020, at a time of negative ruble pricing dynamics coupled with the initial shock from the coronavirus (COVID-19) pandemic and the oil price collapse, Sibur was insulated by the new ZapSib plant, which helped revenue in the olefins and polyolefins segment grow by over 30%. Sibur is now one of the EU’s largest suppliers of these plastics – used in everything from packaging and healthcare to car manufacturing.
Beyond growing profits, Konov has been a rare voice calling for improved corporate citizenship in Russia. During the coronavirus pandemic, Sibur kept the prices for medical-grade polymers at their minimum levels to ensure the supply of disposable PPE to healthcare facilities. It also provided over 40,000 epidemiological kits to regions where it operated.
Konov also leaves Sibur with a transformed approach to the environment. In a country where the ESG agenda is yet to gain traction, Sibur has committed to take part in recycling 100,000 tpy of polymer waste by 2025. It is also building production to make PET granules containing recycled materials at one of its units.
Sustainalytics ranked Sibur among the top 1% of companies with the lowest ESG risk in the global petrochemicals industry. In 2021, MSCI upgraded the ESG rating for Sibur to ‘BBB’ from ‘BB’, while Forbes named Sibur as one of Russia’s 30 most eco-friendly companies. Konov himself made it onto the ICIS list of top senior executives with the biggest impact on their companies and the industry, alongside managers from the likes of Dow and Solvay.
Sanctions club Just as rumours were beginning to circulate that Sibur could have an IPO in the pipeline, Konov’s time with the company was curtailed when Western sanctions aimed at forcing Putin to end the bloodshed in Ukraine were expanded to incorporate high-flying executives as well as oligarchs.
19 RUSSIA Country Report October 2020 www.intellinews.com