Sibur

SIBUR (PJSC SIBUR Holding) is a Russian petrochemicals company founded in 1995 and headquartered in Moscow. SIBUR operates production sites located all over Russia, has over 1,400 major customers engaged in the energy, automotive, construction, fast-moving consumer goods (FMCG), chemical and other industries in approximately 70 countries worldwide and employs around 26,000 personnel. In 2018, its revenue was USD 9.1 bln and EBITDA USD 3.2 bln.[1]

Sibur
TypeJoint Stock Company
IndustryPetrochemical
Founded1995
Headquarters
Moscow
,
Russia
Key people
Leonid Mikhelson (Chairman of the Board of Directors)
Revenue$9.1 billion [1] (2018)
$2.6 billion[1] (2018)
$2.06 billion[2] (2017)
Total assets$18.6 billion[3] (2017)
Total equity$7.84 billion[4] (2017)
Number of employees
26,000[5] (2018)
Websitesibur.ru

History

SIBUR was founded by government decree in 1995.[6] 38% of its shares were state owned and the remaining 62% of the company was made public.

Towards the end of 1998, SIBUR started its transformation into a vertically integrated petrochemical holding with a full production chain from the processing of raw materials through to the manufacture of finished goods. Michael Cherney, its controlling shareholder at the time, invested over $110 million in SIBUR’s business development and expansion programme. SIBUR subsequently built up assets by buying stakes in petrochemical companies all over Russia, including some 60 companies.

By 2001, Gazprom had acquired control of SIBUR with a 51% stake.[7] In 2003, Alexander Dyukov was appointed president and oversaw a reform with a long-term growth strategy and implementation of infrastructure updates.

By September, the stock was divided between Gazprom (25%) and Gazprombank (75%).[8] Dyukov was succeeded by Dmitry Konov as SIBUR’s new president towards the end of 2006.

In July 2005, SIBUR founded AKS Holding (whose legal successor is today's SIBUR) to clean up the holding's debts of RUB 60 bn, with most of this amount due to the parent company. The balance sheet of AKS Holding received the shares of 26 petrochemical businesses held by SIBUR. In December 2005, AKS Holding was renamed SIBUR Holding.[9]

In 2008, Gazprom decided that the petrochemical business was a non-core asset, and SIBUR shares were sold to Gazfond in exchange for its energy assets. Both Gazprombank and Gazfond also withdrew from the Gazprom group. In December 2010, Gazprombank began a phased sale of SIBUR to Leonid Mikhelson.

In 2011, SIBUR began exiting its non-core production assets, including its tyre and mineral fertilizer businesses, which it sold. Instead, the company focused on investing in polymer investments.[6]

By 2020, SIBUR is planning to launch ZapSibNeftekhim on the basis of the Tobolsk Production Site which is to become Russia’s largest petrochemical complex, permitting SIBUR to double polymer production.[6][10]

Corporate affairs

Ownership

By the autumn of 2011, 100% of SIBUR were owned by the company SIBUR Limited, which since 2013 is 82.5% owned by Leonid Mikhelson and Gennady Timchenko. The owners of the remaining 17.5% include SIBUR's former and current top management. In 2014 Timchenko's share was purchased by Kirill Shamalov, deputy chairman of SIBUR, increasing his share to 21.3%.[11]

As of 28 April 2017, ownership of SIBUR was divided as follows: Leonid Mikhelson – 48.5%, Gennady Timchenko – 17%, current and former managers of SIBUR Holding 14.5%, Sinopec 10%, Silk Road Fund 10%.[12] In December 2015, Sinopec completed a 10% minority strategic investment in SIBUR. In January 2017, Silk Road Fund closed the deal on its acquisition of 10% equity stake in SIBUR.[13]

Operations

Midstream

The Group’s midstream segment comprises:

  • processing of associated petroleum gas (APG) that SIBUR purchases from major Russian oil companies,
  • transportation, fractionation and other processing of natural gas liquids (NGLs) that SIBUR produces internally or purchases from major Russian oil and gas companies, and
  • marketing and sales of feedstock products, such as natural gas, liquefied petroleum gases (LPG), naphtha, raw NGL, methyl tertiary butyl ether (MTBE) and other fuels and fuel additives.

SIBUR’s feedstock processing infrastructure includes seven out of the nine existing GPPs in Western Siberia, five compressor stations and three GFUs.

Midstream facilities
  • OAO SiburTyumenGaz (100%)
  • OOO Zapsibtransgaz (100%)
  • OOO Yuzhno-Priobskiy GPP (50%) (JV with Gazprom Neft Group)

Petrochemicals
Workers of the Tobolsk-Polimer chemical plant

In its petrochemicals business, the Group has been operating three steam cracker facilities, one PDH unit, two basic polymers production plants, manufacturing low-density polyethylene (LDPE) and polypropylene (PP), three synthetic rubbers production plants, manufacturing commodity and specialty rubbers as well as thermoplastic elastomers, and 13 production plants manufacturing plastics and organic synthesis products, including polyethylene terephthalate, glycols, alcohols, BOPP-films, expandable polystyrene, acrylates as well as a wide range of intermediate chemicals.

SIBUR has used, amongst others, Navigator Holdings, a shipping firm owned by Wilbur Ross, U.S. Secretary of Commerce under President Donald Trump to ship LPG since 2012.[14][15] In 2017 SIBUR released a statement denying that they had ever directly dealt with Ross, stating that all negotiations and meetings were held by SIBUR and Navigator management, and without any shareholders involvement.[16]

Tobolsk industrial site facilities
  • OOO SIBUR Tobolsk (100%) (former Tobolsk-Neftekhim)
  • OOO Tobolsk - Polymer (100%)
  • OOO Tobolsk HPP (100%)
  • OOO ZapSibNeftekhim (100%) (under construction)

Basic polymers facilities
  • OOO Tomskneftekhim (100%)
  • OOO NPP Neftekhimia (50%) (JV with Gazprom Neft Group)
  • OOO Sibur-Kstovo (100%)
  • OOO RusVinyl (50%) (JV with SolVin)
Tobolsk-Polymer complex.

Plastics, elastomers and organic synthesis facilities
  • OAO Sibur-Neftekhim (100%)
  • ZAO Sibur-Khimprom (100%)
  • OAO Polief (82.5%)
  • OAO Sibur-PETF (100%)
  • OOO SIBUR GEOSINT (100%)
  • OOO BIAXPLEN (100%)
  • JSC VORONEZHSINTEZKAUCHUK (100%)
  • Sibur-Sinopec Rubber Holding Company Limited (74.99%) (JV with SINOPEC*)

– OAO Krasnoyarsk Synthetic Rubbers Plant (100%)

Tyre business

At the end of December 2011, SIBUR exited SIBUR-Russian Tyres, having sold a 75% stake to the company's management, and the remaining stake to the partners of Vadim Gurinov, its CEO.[18]

Mineral fertiliser business

At the end of December 2011, SIBUR sold its mineral fertiliser assets to URALCHEM (Mineral Fertilisers, Perm) and Siberian Business Union (Kemerovo Azot and Angarsk Azotno-Tukovy Zavod).[19]

Acquisitions
  • In 2009, SIBUR acquired 50% stake in Russian BOPP-films producer BIAXPLEN. In March 2012, SIBUR gained control of the BIAXPLEN group of companies by increasing its stake from 50% to 100%. At the time of the acquisition, production facilities of the BIAXPLEN group comprised three plants located in the Nizhny Novgorod, Kursk and Moscow regions with a total capacity of 78,000 metric tons of commodity films per annum.
  • In 2011, SIBUR acquired JSC Acrylate - the only CIS-based producer of acrylic acid and its estersfrom ATEK Group.

Joint ventures
  • In June 2007, SIBUR established OOO RusVinyl, a 50/50 joint venture with SolVin Holding Nederland B.V.. This joint venture was established to construct a PVC plant with a capacity of 330 ktpa for PVC and 225 ktpa for caustic soda.
  • In February 2012, SIBUR entered into a joint venture arrangement with Reliance Industries Limited, pursuant to which a JV Reliance Sibur Elastomers Private Limited was set up, in which SIBUR owns a 25.1% stake. This joint venture was established for the development of butyl rubber production facility in India with capacity of 120 ktpa. It would start production by 2015.[17]
  • In October 2012, SIBUR signed an agreement with Solvay S.A.-(after initial negotiations with Rhodia (company) which was acquired by Solvay) to establish RusPav, a 50/50% joint venture. It was established to develop a surfactant and oilfield process chemicals production site in Dzerzhinsk, the Nizhny Novgorod region.
  • In August 2013, SIBUR and China Petroleum and Chemical Corporation (Sinopec Corp.) entered into a joint venture developed on the site of the Krasnoyarsk Synthetic Rubber Plant (KZSK), where Sinopec purchased 25% + 1 share of KZSK.

Notes

    References
    1. "2018 Annual Results" (PDF). Sibur.com. Retrieved 7 March 2019.
    2. https://www.sibur.ru/press-center/news/SIBURsoobshchilofinansovykhioperatsionnykhrezultatakhdeyatelnostipoMSFOza2017god/.
    3. http://investors.sibur.com/~/media/Files/S/Sibur-IR/Financial-results/sibur_ifrs_12m2017_rus.pdf.
    4. http://investors.sibur.com/~/media/Files/S/Sibur-IR/Financial-results/SIBUR_IFRS%2012m%202017.pdf.
    5. "2018 Results Summary". Sibur.com. Retrieved 7 March 2019.
    6. "History". Sibur. Retrieved 31 August 2018.
    7. Sinclair, Neil. "Russia's Sibur contributes Rouble 2.2bn to Gazprom H1 pfts". ICIS. Retrieved 2018-08-31.
    8. Blagov, Sergei. "Gazprom gives nod to $5bn Sibur buyout". ICIS. Retrieved 2018-08-31.
    9. Blagov, Sergei. "Russia's AKS renamed Sibur Holding". ICIS. Retrieved 2018-08-31.
    10. Kobzeva, Oksana (2018-06-08). "Russia's Sibur says new gas chemical complex will cost up to $8 bln". CNBC. Retrieved 2018-08-31.
    11. Editorial, Reuters. "Timchenko sells 17 pct stake in petrochemical company Sibur". U.K. Retrieved 2018-08-31.
    12. "Changes in the SIBUR Holding's shareholding structure". Retrieved 2018-08-31.
    13. "10% stake in SIBUR to be sold to China's Silk Road Fund". Retrieved 2018-08-31.
    14. Reuters Staff Russia's Sibur says had no direct dealings with Wilbur Ross November 6, 2017
    15. "SIBUR Annual Review 2012" (PDF). p. 102. Retrieved 4 September 2018.
    16. Editorial, Reuters. "Russia's Sibur says had no direct dealings with Wilbur Ross". U.S. Retrieved 2018-09-04.
    17. "India's butyl rubber import my end once Russian JV starts in 2015". IANS. news.biharprabha.com. Retrieved 24 April 2014.
    18. "Russia's Sibur divests tyre business". ICIS News.
    19. "Sibur to Sell Fertilizer Assets to Siberian Business Union". Bloomberg.
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