MOSCOW (MRC) - Kazanorgsintez (KOS, part of the TAIF Group), a major Russian polymer producer, has cut revenue by 13% to RUB 62.8 billion in 2020, Business Online reports.
The indicators of the Tatarstan plastic manufacturer cannot be considered in isolation from the general market situation. And the PPI-ST index, reflecting the dynamics of prices for large-tonnage plastics, sank 9% last year, from 99.4 thousand rubles per ton to 90.7 thousand rubles. The minimum indicator over the past two years fell on June 2020 with its 81.1 thousand rubles, however, the quotes, having found the bottom, quickly went up and closed the year at the maximum values ??in 24 months at the level of 107.1 thousand rubles.
The plastics market has moved in line with the general environment in the world since the announcement of the COVID-19 pandemic. Also, prices for plastics correlate with prices for natural gas, which is the main raw material for their production. In the second half of 2019 and exactly until June 2020, quotations on the gas market decreased to USD1.43 per million BTU, and then sharply surged upward, ending the year at USD2.55 per million BTU.
Within the Russian Federation, prices were relatively stable due to the specifics of Russian pricing. At the same time, KOS's foreign colleagues get access to raw materials at spot prices, which means that they could make plastics cheaper in 2019 and in the first half of 2020, which put pressure on KOS's prices.
Unlike Nizhnekamskneftekhim, KOS receives the lion's share of revenue in the domestic market. At the end of last year, the ratio of its sales in Russia and abroad amounted to 51 billion to 12 billion rubles against 61 billion to 12 billion at the end of 2019.
Compared to competitors in the West, Russian large companies show slightly better performance due to the floating and periodically sinking ruble exchange rate, which allows them to generate more revenue (in national currency, of course) and save on expenses within the country - such as electricity, rail transportation, purchases the same ethylene and further down the list. At the same time, over the year, the domestic currency fell in price against the US dollar by an average of 11% to 72.1 rubles per dollar.
In physical terms, it can be noted that the production capacity at the polycarbonate plant has increased from 65 thousand tons by more than half. The modernization was carried out in two stages: in August - September 2019 and in October - November 2020. According to the results of the first stage of renovation, the productivity was about 88 thousand tons of polycarbonates per year, after the second it was increased to 100 thousand. All modernization works were carried out during the periods of preventive scheduled repairs, without additional production interruptions. As a result, the revenue from the sale of polycarbonates in the first 9 months of 2020 increased by 22.6% to 7.8 billion rubles.
Profit of KOS over the past year decreased by 26%, or 3 billion, to 8.6 billion rubles and returned (adjusted for the exchange rate) in 2014. Although the final result could be much weaker, since the company received only 11.1 billion rubles of operating profit from its core activities - 35%, or 5.9 billion rubles, less than in 2019. Fortunately, the balance of other items was dramatically improved. The negative balance of other income and expenses decreased by 2.26 billion to 320 million rubles. The key role was played by exchange rate differences: negative ones decreased from 1.71 billion to 846 million rubles, while positive ones increased from 315 million to 1.47 billion rubles.
Kazanorgsintez's revenue for 2020 under RAS fell by almost 14%, operating profit - by 35%, and net profit decreased by 26%. At the end of 9 months of 2020, the company showed a decrease in revenue by almost 20% compared to the same period in 2019, respectively, the fourth quarter of 2020 turned out to be the most successful for it. In principle, the entire global petrochemical industry has suffered, as both prices and sales have fallen. The coronavirus pandemic and the related restrictions on business, which persisted in European countries until the end of 2020 and are still ongoing in some countries, have reduced the demand for petrochemical products.
Earlier it was reported that Kazanorgsintez began a project to build a production of polyethylene-vinyl acetate (EVA) and high-pressure polyethylene (LDPE). The capacity of the new production will be 100 thousand tons of EVA / LDPE per year. The Japanese company Sumitomo Chemical will act as the licensor. The production complex will be located on a free site, inside the territory of Kazanorgsintez. To implement the project, it is planned to use the company's own funds and attract debt financing.
According to MRC's DataScope, in January of this year, imports of EVA to Russia increased by only 0.07% to 3.084 thousand tons from 3.087 thousand tons in the same month of the previous year, but by the end of January-December 2020, imports of this type of copolymer ethylene in the Russian Federation decreased by 3.41% - to 38.17 thousand tons (39.52 thousand tons in January-December 2019).
Kazanorgsintez PJSC is one of the largest polyethylene producers and the only manufacturer of polyethylene