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Chemistry for Life
15 February 2019
10:00—11:15
KEY CONCLUSIONS
Chemical industry in Russia has great potential

The consumption of chemical products per capita in this country is twice as low as it is abroad, so we have a long way to go. I am sure, however, that it will not have any impact on our health. Increased use of chemical products will help us achieve significant results in other areas of Russian industry — Viktor Evtukhov, State Secretary and Deputy Minister of Industry and Trade of the Russian Federation.

Chemical industry is the core branch not only of Russian, but of global civilization. Therefore, we need to find a common language with it — Anton Voytsekhovskiy, Ancor, Journalist.

Chemical industry driving other branches of economy

Petrochemical industry may be an engine of economic growth. The analysis shows that, in recent years, the gross world product has been growing at 3%, with chemical and petrochemical industries growing a percent higher. If you compare the GPD growth for 2016, it is only 0.5%, while the chemical production has grown by 11%. And in the following years this rate of growth has persisted — Aleksey Kozlov, Managing Director, SIBUR.

The process of creating new and modernising existing productions remains ongoing. In 2018, 20 investment projects were launched, the total amount of investments adding up to 42 billion roubles. And those were totally different projects in different regions — starting from production of methanol, carbamides, and water-soluble fertilizers to hygiene items, and other areas — Viktor Evtukhov, State Secretary and Deputy Minister of Industry and Trade of the Russian Federation.

ISSUES
Inadequate enterprise condition monitoring

Diagnostics of enterprises is not the most common practice in Russia, even though, this mechanism has been in place since 1996. It is a governmental award in business process quality management. In other countries, it is mandatory to conduct check-ups every three years in a number of industries — Maxim Protasov, Head of the Russian Quality System (Roskaschestvo).

Shortage of appropriate raw materials

We are doing quite well at large-tonnage polymers; however, we need more raw materials for low-tonnage chemical products. <…> They are required for developing new products with high added value, which would be in demand inside the country and would be exported — Viktor Evtukhov, State Secretary and Deputy Minister of Industry and Trade of the Russian Federation.

Limited demand for chemical products

There are certain limitations for utility infrastructure (e.g., for replacement of metal plumbing with plastic — Ed.). It is limitations of utility fees that prevent many water utility enterprises from initiating the renewal of basic assets in the short run — Lev Gorilovskiy, Member of the Board of Directors, Polyplastic Group.

Industry’s negative reputation

Chemophobia driven by environmentalists in this country is gaining momentum, and we have to make changes in terms of being open to customers in order not to scare off those initiators and customers who are planning small and medium business — enterprises that this way or another affect the environment — Mikhail Sutyaginskiy, Chairman of the Board, Titan.

SOLUTIONS
State support for investments to petrochemical industry

Support measures should be systematic. They should provide every investor who wants to invest in it with a picture for 15–17 years ahead and guarantee that they will be able to get back the invested money due to high EBITDA margin, which, for example, will be partially secured by reverse excise tax — Pavel Sorokin, Deputy Minister of Energy of the Russian Federation.

How can you make people sell in the domestic market? You can force them to, or you can provide economic incentives. To avoid the practice of dictating terms, we, in co-operation with the Ministry of Finance, introduced a damping mechanism — reverse excise tax. This element has been in place for a month so far. The difference between the export alternative and an estimated market price, which has to be suitable for everyone, is compensated from excess budget returns that come from oil price growth. A part of this difference is compensated — a half in nominal terms and 70–80% in real terms — Pavel Sorokin, Deputy Minister of Energy of the Russian Federation.

The reverse excise tax is definitely important for enterprises, because large amounts have been invested. However, the reverse excise tax is not helpful from the price perspective, it will be the global price anyway. On the other hand, more will be produced, but all products may go abroad where it will be willingly bought — Viktor Evtukhov, State Secretary and Deputy Minister of Industry and Trade of the Russian Federation.

Upgrading production

The main goal is to upgrade, re-equip the existing chemical enterprises. It either means transition to completely new technological capacities, or technical re-equipment like what the Titan Group of Companies is doing in Omsk — Mikhail Sutyaginskiy, Chairman of the Board, Titan.

Close co-operation between production and science

One of co-operation mechanisms is creation, together with business, of joint educational centres, university departments. It is important that business comes to university, but it should be movement towards each other — Alexander Mazhuga, Rector, Dmitry Mendeleev University of Chemical Technology of Russia.

The university administration requires significant changes, it has to consistently comply with business processes, observing deadlines, and carry out orders from business in a complete and competent manner — Alexander Mazhuga, Rector, Dmitry Mendeleev University of Chemical Technology of Russia.

The material was prepared by the Russian news agency TASS