Page 145 - RusRPTFeb23

12.3%. One of the reasons for this result is the exit from the Russian market of the German company Henkel, which has 11 plants for the production of household chemicals.
The decrease in production in the main chemical sub-sector, which includes the production of basic chemicals, fertilisers and nitrogen compounds, plastics and synthetic rubber in primary forms, amounted to almost 5% over the nine months. The strongest decline in this sub-sector was of potash fertilisers. There was also a drop in the production of all types of large-capacity plastics.
The decline in production can be attributed to supply chain disruptions, which have caused difficulties with the export of chemical products. Many companies have reported a significant drop in exports to the west and have had to redirect supplies to the east, leading to increased transport costs.
In October, the EU imposed its eighth package of sanctions on Russia, including a ban on the supply of certain types of plastics and chemicals, including methanol, polyethylene, and hydrochloric acid. This has further impacted the industry's performance on the foreign market.
In addition, there have been issues with the supply of imported materials needed for production processes. These are often low-tonnage chemistry products, which are either not produced in Russia or produced in insufficient quantities. The domestic market has also seen a drop in demand, particularly due to a decline in the automotive industry and a stabilization of the epidemiological situation, leading to a decrease in the production of chemicals used in antiseptics and protective plastic products.
The worst results for the first nine months of the year were seen in the production of soap and detergents, cleaners and polishes, and perfumery and cosmetics, with a decline of 12.3%. The main chemical sub-sector, including the production of basic chemicals, fertilisers, plastics, and synthetic rubber, saw a decline of almost 5%. The production of potash fertilisers saw the biggest drop, as well as all types of large-capacity plastics. It is hoped that in 2023, the industry will see growth due to the low base factor and the gradual resolution of logistical issues.
Despite the sanctions, many large companies continued their investment projects in the course of 2022.
Fertiliser-maker Uralchem began production of complex mineral fertilisers in the Kaliningrad region with a capacity of 150,000 tonnes of finished products per year and an option to expanding production to 220,000 tons.
The Pigment chemical plant in Tambov launched the production of acrylic emulsions with a capacity of 12,800 tonnes per year. Acron launched a plant
145 RUSSIA Country Report February 2023 www.intellinews.com