Amur GCC being built by SIBUR, Sinpoec to sell goods on standalone basis - Konov
SVOBODNY, Amur Region. Aug 19 (Interfax) - Amur Gas Chemical Complex, which Russia's SIBUR is building in partnership with Sinopec, will sell the polymers it produces on as standalone basis, SIBUR CEO Dmitry Konov told reporters.
Sinopec plans to acquire a 40% stake in Amur GCC.
"We already have a joint venture, for which we are awaiting regulatory approvals, and it will sell the goods. If we have the fortune of being able to sell in, say, Indonesia, the joint venture will receive the proceeds, not Sinopec or SIBUR. If Sinopec sells any of the polymers in China, the joint venture will get the money, but Sinopec will receive commission," Konov said.
He said Amur GCC would be built in two stages like the ZapSib-2 petrochemical complex. A rail link to the Trans-Siberian mainline will have to be built to ship the goods.
SIBUR plans to export a lot of the polymers it produces because the Russian market is not that big, Konov said. The company expects the new plant will have around a 5% share of the Southeast Asian market. "The world polymer market, that for polyethylene and polypropylene, is 200 million tonnes. The Southeast Asian market is roughly a third of that. By current estimates, Amur GCC will have around a 5% share of that market. That's not the sort of figure that will change it radically as the market will grow by around 8 million tonnes per year," Konov sdaid.
"In Russia we plan to sell as much as Russia is able to consume," he said.
Konov said he was confident AGCC's goods would be in demand in Asia. "Here it's a matter of how competitive you are: where you stand in terms of costs and can you sell more cheaply than your rivals if you have to. Here, according to the concept of quartiles, both ZapSib and Amur GCC are in the first quartile, that is the 25% most effective manufacturers. You can tap a saturated market but your product has to be either cheaper or better than that of your rivals. And that applies to any other product - if you can make it more cheaply than others, then in the event the market is not good enough you can sell, but not somebody else who might cost more," he said.
