Russia’s largest petrochemical company, Sibur, will triple its production output when two mega projects will be finished in 2024, the company’s Chairman of the Board Dmitry Konov has told The Financial Times.
The $16 billion bet on two new production plants will see the company’s production of polymers grow six-fold over the decade to 2024, Konov added.
In Siberia, the $8.5 billion ZapSibNeftekhim will start producing 2 million tons of polymers a year from 2019. As soon as ZapSib is running Konov will focus on another mega-project: the $7.5 billion Amur plant close to Russia’s eastern border with China. Sibur reckons it could start production after 2024 and add 50 percent output to its production.
“We are basically doubling our petrochemical capacity with ZapSib, and almost trebling with Amur,” Konov said.
He anticipated the expansion by rebuilding the company’s management in 2016, replacing his CFO and devolving power to regional operations. Konov reasoned a bigger company could no longer be run solely from Moscow.
“We shifted our management structure a little to focus more on strategy and new growth opportunities,” he explains.
Formed in 1995 by the Russian government, Sibur went private in 2010, and it spent almost $10 billion in Konov’s first decade as chief executive on upgrading plants and building new ones.
Previously completely owned by Russian entities, in 2015 Sibur sold 10 per cent of its shares to China’s Sinopec for $1.3 billion. A year later, China’s Silk Road Fund bought another 10 percent. Those deals unlocked cash for the projects, but more importantly gave Konov a foothold in China, where Sibur expects most of its new production to be exported, The Financial Times wrote.
