Economic sanctions and the sharp depreciation of the ruble were likely to set back Russian targets for self-sustainability and import substitution of several polymers, Vladimir Batkhin, director at Strategy Partners Group said Wednesday, speaking at the third annual CIS Petrochemical Conference in Moscow.
Russia has set targets to be self-sustainable in polyethylene, polyvinyl chloride, polyethylene terephthalate and polystyrene.
Batkhin of Strategy Partners, a division of Russia’s Sberbank, said that targets of PE and PVC import substitution would be delayed by a year until 2019 and the scenario will be similar for PET and PS.
Of the petrochemical projects planned in recent years, the only one going ahead as planned was Sibur’s Tobolsk petrochemical project, mainly due to Russian state support. The others have been postponed due to the weak economic climate, Batkhin said.
“Most of the [petrochemical] companies decided to postpone their projects for two years, which allows the [economic] situation time to settle down.”
“There will be no growth in GDP rates of the sort anticipated. All these key factors will impact petrochemical production.”
Citing published forecasts, Batkhin said that a consolidated negative GDP growth of 3-4% was expected in 2015, down from flat growth in 2014 and that it would take between two to four years to reverse this trend.
Russian petrochemical producers could benefit from a more competitive environment abroad, which could help speed up import substitution, according to Batkhin.
“The Russian government can help to do something to revive the market and decide on the ruble strategy.”
– Platts.com
