SIBUR redirecting polymer shipments meant for Europe mostly to China, now accepting ruble settlements
MOSCOW. June 19 (Interfax) - SIBUR has completely redirected its polymer exports from Europe, and is trying out ruble settlements with new consumers, CEO Mikhail Karisalov said in an interview with RBC-TV.
"Working with consumers there, in Europe, we learned a lot, but in terms of the total share of output, as we focus primarily on the domestic market, their share was not very large. "Because we brought 65-70% of our entire product portfolio to the domestic market, it was only 10%. Today, we can state that we have fully managed to find alternative consumers, namely China," he said.
"You can supply as much as you like there as far as our Russian production profile is concerned. We have a partner there, Sinopec, who is a shareholder in SIBUR, and they operate with about 20 million tonnes, all polyethylene and polypropylene. In Russia, for example, SIBUR "produces about 5 million tonnes, and exports just over 1 million," Karisalov said.
Shipments are also being redirected to the Turkish market, he said. "Moreover, the Turkish market is like a hub that will be able to re-supply our products and work with other regions. And I'll say again, the domestic market is our primary one," he said.
There are no discounts for the products being supplied, Karisalov said. "No, of course not; no discounts. We are still operating in a commoditized market, especially with basic exports like ours. Part of our exports is made up of special brands, and there the issue is not discounts, but, on the contrary, it's markups, because in fact we are not selling a brand of polyethylene or a brand of polypropylene, but a special solution with specific consumer properties for a particular processor," he said.
The company operates in national currencies: Chinese yuan, Vietnamese dong, and Turkish lira, the CEO said.
"As of today, we have started working with rupees. The yuan and the lira are probably the main currencies we are testing, though, I won't divulge details yet, and we're doing settlements in rubles with the same countries, with buyers from the same countries," Karisalov said.
"As for conversion, well, there are always issues: policies of national banks, conversion rates, accounting for inflation. It's part of what we do today. Does it limit the ability of an industrial company like SIBUR, to export? Definitely not," he said.
Current dependence on imported technology and equipment is "still high," Karisalov said.
"Today our approach is to select the best, but not complete, installations, but the best pieces of equipment, and together with our engineering and technology partners from China, from the United Arab Emirates, and from a number of countries, but primarily with our technologists, to actually form quasi-proprietary technological plans for polyethylene, primarily for the synthesis of hydrocarbons. This is what we are doing today," the head of SIBUR said.
"But to be honest, despite the colossal efforts of the Ministries of Industry and Trade, and Energy, and a number of large engineering holdings, we are consolidating our shipments today with a number of companies and thus entering the market with the maximum volume in order to be of interest to our Russian machine builders: with NOVATEK , and we have signed agreements with Gazprom Neft , while I would continue to characterize our dependence as high, namely on imports," he said.
"But these are still friendly countries, and the manageability of these risks is higher, also because we now remember what befell us almost a year and a half ago and we continue, of course, to rely on Russian machine builders. This is not a fast process, and it seems absolutely normal to look at what a mature Europe did in the 60s-70s-80s-90s, and see that we will not be able to do it in a year or two. In a five-year period, like the Chinese so-called path of innovation: we buy a unit, disassemble it, and understand how it works. Then we repeat it, that is, we reengineer it. We can definitely do this in a few years," Karisalov said.