Tatarstan's petrochemical industry counts losses from WTO accession
KAZAN. Oct 24 (Interfax) - Nizhnekamskneftekhim , a major producer of rubber and plastics, estimates annual losses due to changes in operating conditions following Russia's accession to the World Trade Organization at 2.5% of revenue, while tire producer Nizhnekamskshina puts such losses at 15-20% of revenue, the press service of Tatarstan's president said in a press release, citing the internal Russian republic's Prime Minister Ildar Khalikov.
"According to the estimates of the companies themselves, annual losses as a result of Russia joining the WTO amount to about 3 billion rubles - 2.5% of revenue for Nizhnekamskneftekhim, and 5 billion-6 billion rubles for Nizhnekamskshina - this is 15-20% of 2011 revenue," Khalikov was quoted as saying.
This is despite the fact that Nizhnekamskshina has over the past four years undergone a complete modernization and has the most advanced technology, including in partnership with global tire producers such as Continental.
"For other companies that have not undergone such modernization, and less than half of companies [in Tatarstan] have undergone such a deep modernization, these risks are even more serious," Khalikov said.
He said the most sensitive sectors to WTO accession in Tatarstan are petrochemicals, the automotive industry and agriculture, and believes it is necessary to work out government measures to support domestic producers.
"I want to stress that virtually all WTO countries have so-called 'hidden' systems of stimulus for domestic producers that do not contravene the agreement. And such measures need to be provided for a number of sectors of the Russian economy as well," Khalikov said.
He said Tatarstan has prepared a number of proposals, including for a government program to adapt agricultural producers and food industry companies to life under WTO conditions, as well as to amend the Russian Tax Code to provide temporary tax breaks to food producers.
In addition, he said, Russian manufacturers need support when entering foreign markets. "For most producers, it will be very difficult to go abroad without unified, centralized help," Khalikov said.
He said that, despite all of the professed benefits for the country from joining the WTO, at the region level they have not been felt yet. "All the decisions have been made, so it's pointless to talk about whether they are good or bad. The only thing left to do is to learn to swim in this new environment," Khalikov said.
Nizhnekamskneftekhim is one of the largest producers of synthetic rubber in the world and one of the largest plastics producers in Russia. The company has reported that OJSC Svyazinvestneftekhim owns 28.6% of common shares (25.2% of charter capital), LLC Telecom-Management (a subsidiary of OJSC TAIF) - 50.6% (44.5%) and NKB Investments Ltd - 8.8% (7.7%).
Nizhnekamskshina is part of the tire group of oil company Tatneft . The group plans to produce 13.3 million tires in 2012, 20.7% more than in 2011.