TOP MANAGERS TAKING QUESTIONS

The industry’s key risk is tighter regulatory requirements for packaging, up to a ban on certain materials. Global consumer goods companies have undertaken to shift to 100% recyclable or reusable packaging and biodegradable materials by 2025–2030.

But it's also a potential window of opportunity to develop new packaging solutions from sustainable eco-friendly materials.

We are in the process of an in-depth analysis of the two companies’ product ranges and will be able to name specific grades as soon as we are through. However, we can already highlight Manucor’s key strengths. One of them is films for self-adhesive labels, and we're planning to adopt their production process.

Customers will benefit from our combined efforts, a broader grade range and better service.

Developing and implementing digital initiatives, as well as running IT projects are the Company’s dedicated departments such as Digital Technology, Corporate Data Management, and Information Technology and Business Data.

Along with digital transformation units at six SIBUR’s subsidiaries, that accounts for over 1,000 employees. Most of them take part in digitalisation as customers. The majority of SIBUR’s employees are already employing digital products in their work.

Our goal is to move beyond basic products to gradually introduce specialty grades. SIBUR seeks to expand its product range with new PE grades (HDPE and LLDPE) with a view to launching new solutions for the automotive industry, domestic appliances, trunk line pipes and large diameter pipes, packaging, etc.

We understand that we need to focus on enhancing performance, accelerating product development and launching bundle offerings. To this end, we launched SIBUR PolyLab, an R&D centre for the development and testing of polymer products. The centre will pursue experimental research of both polymer materials and final goods, which will speed up the development of innovative polymer grades and enable us to offer Clients a whole range of new products. Also, we are going to develop recycling solutions in cooperation with our Clients.

Construction and installation are now complete. Start-up and commissioning are ongoing, already resulting in sample products (both polypropylene and polyethylene) which we are analysing together with our Clients. Given the capacity of our plant, we need some time to adjust dozens and hundreds of thousands of equipment units. Thus, commissioning is to be finalised by the end of the year with the design capacity to be reached after 2020.

We have just completed a project at the Kstovo facility to increase capacity for our key products: from 384,000 to 420,000 t of ethylene and from 96,000 to 104,000 t of benzene a year. Rostechnadzor's Volga-Oka Department has made relevant updates to the register of safety approvals. All this additional ethylene and benzene is processed in Russia, contributing to a higher output of polymers and other materials which are popular in the market.

Our plans for 2019 include:

• to complete the construction of the DOTP facility in Perm in Q2 2019;

• to upgrade the existing TPA facility in the Republic of Bashkortostan and increase its capacity, which we expect to complete early this summer;

• to implement a project to boost SBS/TPE production at the Voronezh facility, slated for completion early next year;

• to go on with the construction of a MAN facility in Tobolsk, which is expected to be launched in 2021;

• we are also making preparations for a project to increase Nd-BR capacity in Voronezh by 30% with construction to be completed in 2021.

Russia is our priority market. The key export markets are Europe, Turkey, and China. Consumption growth in the PP and PE segments until 2025 is projected to remain above global GDP growth. Asia will be far ahead of the other markets in terms of consumption, growth rates, and shortage of supply.

We operate warehouses and sales offices across all markets, and we are pre-marketing ZapSib’s products now.

SIBUR is closely monitoring the trends in digitalisation and acceleration of interactions in the supply chain and strives to be on top of them by investing in e-workflow. In May 2018, we launched a solution designed for electronic source documents. It allows for integration between the Company’s accounting systems and those of the e-workflow operators. A solution for electronic signature of contracts was launched in August, with over 50% of additional contracts for November signed electronically.

SIBUR has reached agreements with Russia’s three largest operators (out of some 50 operators working in Russia) to ensure a smooth transition of its clients to e-workflow. Our e-workflow partners are SKB Kontur (Diadoc system), Tensor (SBIS EDMS) and KORUS Consulting CIS (SPHERE Courier and E-involving products).

Starting from December, we can send documents using roaming (thanks to interaction between SIBUR’s and client’s operators). This is convenient for those clients who use products by other operators.

How to join e-workflow? If the client has already entered into a contract with an e-workflow operator and is prepared to receive contracts and source documents for SIBUR products electronically, all is needed is to provide the details of the operator to the dedicated manager.

First, growing LPG prices are not limited to Russia only. Like with any other hydrocarbon feedstock, LPG prices are linked to the oil price in this or that way, and it has grown.

Also, to gain insight into domestic LPG performance in 2017–2018, we need to factor in individual trends in the LPG market at that time. On the one hand, it was driven by export opportunities becoming more enticing for LPG suppliers, while on the other hand, climbing petrol prices in Russia stimulated demand for the alternative fuel – gas engine fuel. Besides, a purely technical factor came into play such as panic buying fuelled by unconfirmed speculation about a ban on LPG supplies during the FIFA World Cup that coincided in time with the start of high season in the autogas market.