ZapSibNeftekhim keeps expanding its presence in the Chinese market

Having operated at full capacity for two years now, ZapSibNeftekhim keeps expanding its presence in the Chinese market.

In late 2022, ZapSibNeftekhim ("ZapSib"), an asset of SIBUR, the Russian petrochemical giant, marked its second anniversary of full-capacity operation. Situated in Tobolsk, near the geographical centre of Russia, ZapSib is SIBUR's state-of-the-art manufacturer of polymers, which are already exported to China.  SIBUR says that in continuing to develop the facility they rely on China as the primary export destination.  SIBUR's polymer production capacities in Tobolsk have already reached 2.5 mtpa, with polyethylene and polypropylene being the main products. The facility also manufactures a wide range of petrochemical products, including maleic anhydride (MAN) recently put into production.  SIBUR attaches great importance to environmental protection. For example, the Company processes by-products of oil and gas production at fields in Western Siberia, thus helping to reduce environmental impact. Previously, these products were flared and polluted the atmosphere, but now SIBUR makes great use of them.  ZapSib's polymers can be widely used in multiple industries, including automotive, food, and pharma, to manufacture products such as medical masks and food packaging film, as well as motor-vehicle bumpers, shock absorbers, body parts, and seats. The facility exports its products to many destinations, including Southeast Asia and China. The latter is a special market for SIBUR: with its office opened in the country more than a decade ago, the Company was a pioneer of making business in PRC. Sinopec and the Silk Road Fund hold 8.5% of shares in SIBUR.  2022 saw SIBUR launch the MAN production after two and a half years of the plant construction.   The new facility has a capacity of 45 ktpa or 2.5% of the global MAN production.

MAN is an organic compound and a feedstock for various products from oil paints and coating to unsaturated polyesters, resin modifiers, sizing for paper, and food additives. MAN improves the durability of end products, enhances their waterproof properties, resistance to temperature stress and mechanical impact. According to reports, SIBUR intends to make MAN from butane produced by the plant's gas fractionation unit. The n-butane-based technology is highly eco-friendly. It generates 32% less GHG emissions than the benzene-based technology, which is another testament to SIBUR's caring about the environment. In 2021, the global MAN market climbed to 1.8 mtpa, growing by 3% on average in 2012-2021. Experts believe that by 2027 the annual growth pace of the MAN market will hit the level of 6% on the back of a rise in its use for construction, medicine, transport, industry, agriculture, petrochemicals, low- and medium-tonnage chemicals.  SIBUR will supply the material in liquid and solid forms to Russian and foreign clients. The Company intends to sell 30-40% of its total exports to Asian markets, including China. China is an important strategic partner of SIBUR, and Chinese clients can make payments in yuans, which is more convenient. In the next five years, SIBUR plans to significantly increase its share in the Chinese market. By the end of 2022, the Company intends to raise its exports to the country by 40%, expanding the range of exported products by adding raw materials and liquid chemicals.

Chinese consumers choose eco-friendly products, and their global vision matches SIBUR's goals. Both China and Russia are committed to achieving carbon neutrality by 2060. ESG is at the core of SIBUR's strategy as the Company keeps improving its environmental management framework covering all production phases : investments in R&D, new green technologies, ESG products, upgrade of production facilities, reduction of pollutant emissions, implementation of circular economy projects, as well as promotion of sustainable models in cooperation with partners. According to SIBUR's updated ESG strategy, the Company's sustainable development goals include recycling of at least 50% of waste and at least one facility achieving carbon neutrality by 2025.

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