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Wild West over, but plenty of growth yet to come in Russia’s plastics industry

The country's Wild West days have passed as the prices paid for its oil and natural gas have fallen from the heights they reached in 2008, but what remains is a huge country with a strong consumer base which has a need for increased mobility, improved housing, high-end consumer goods and more. The table is set for continued demand growth for plastics, as made evident by recent statements and moves from leading suppliers DSM, Lanxess and Sabic.

PlasticsToday Staff

January 25, 2011

4 Min Read
Wild West over, but plenty of growth yet to come in Russia’s plastics industry

DSM Engineering Plastics is entering into two joint ventures in Russia to support its sales and marketing there, plus establish compounding capacity in the country. Lanxess, meanwhile, is continuing its push into the country's fast-growing automotive industry, among other end-use markets.

DSM and Russian specialty chemicals company KuibyshevAzot OJSC (KA; Togliatti, Russia) announced their formation of a strategic cooperation. As a result of this cooperation, DSM Engineering Plastics will enter into two joint ventures with KA. In both of these the Dutch company will hold a majority share.

The joint ventures relate to marketing and sales of engineering plastics in Russia and other members of the Commonwealth of Independent States (CIS) and secondly for the compounding on DSM's engineering plastics in a KA facility in Togliatti. The strategic cooperation between DSM and KA will also grant a license to KA to use DSM's proprietary cyclohexanone technology at KA's Togliatti caprolactam plant, resulting into a further increase of its capacity for this polyamide 6 intermediate.

Victor Gerasimenko, general director of KuibyshevAzot OJSC, commented, "Cooperation with DSM will promote the realization of our strategic plans to strengthen our leading positions in the markets for caprolactam and polyamide and to increase the processing of these products within Russia. The use of technology from leading global licensors will allow us to increase operational performance and long-term competitiveness."

For marketing and sales, a JV will concentrate on polyamide 6 (PA6), both compounds and high viscosity applications including film. DSM Engineering Plastics will hold a 51% stake in this JV. DSM Engineering Plastics also intends to acquire 80% in the engineering plastics compounding plant located at KA's manufacturing site in Togliatti, making DSM the first western PA6 supplier with its own manufacturing presence in Russia and the CIS. Financial details and capacity of the plant will not be disclosed.

The establishment of the joint ventures and related agreements is subject to regulatory approval. Closing of the intended acquisition of the compounding plant is expected in Q1 2011.

Lanxess, meanwhile, is using the platform of Interplastica 2011, the annual trade show in Moscow organized by Messe Düsseldorf, to highlight its own efforts at penetrating the Russian and CIS markets. The event is scheduled for Jan. 25 - 28 at the Krasnaya Presnya exhibition center.

For Lanxess (Leverkusen, Germany), which like DSM is a leading supplier of polyamide (its Durethan brand, in PA6 and PA66) and also supplies polybutylene terephthalate (Pocan), the show affords the opportunity to highlight the company's plastics portfolio for Russian processors. "We're looking to harness the excellent opportunities for growth that this region offers us, for example with its booming automotive industry and the numerous investments in infrastructure, such as modernizing buildings. Interplastica is therefore the ideal platform to showcase the latest innovations in Durethan and Pocan," says Egbert von Platen, head of marketing and sales for Europe, Middle East and Africa in the company' Semi-Crystalline Products business unit. 

One area Lanxess is focusing on at the trade fair is the potential offered by highly filled grades of Durethan in lightweight automotive construction. Stiff polyamide 6 grades are in many cases a lighter alternative to sheet steel, die-cast aluminum components and thermoset plastics, and already see use in car front ends, spare wheel recesses and intake manifolds. Lanxess claims its 60% glass fiber filled PA6 grades flow as easily as competing brand with just half of the fiber filling.

The supplier's stand at the trade fair will also be showing a film demonstrating the production and potential uses of polyamide organic sheets (click the link for more on these sheets). Organic sheets are much lighter than sheet steel while offering excellent mechanical performance. Using these sheets instead of sheet steel often enables considerable reductions in component weight, particularly in plastic-metal composite technology (hybrid technology), resulting in lighter and safer vehicles that consume less fuel.  

Lanxess also is organizing technical seminars for customers at the trade fair. Plastics expert André Schmidmeier from the company will be giving a presentation entitled "Lanxess - High Performance Plastics." This will highlight material grades and applications for Durethan and Pocan, including polyamides for blow molding parts in engine compartments, an electrically conductive polyamide 6 for media-carrying parts such as fuel filters, PBT grades for large components in truck cabs and customized polyamide and PBT grades for extrusion and film production.

Another major plastics supplier targeting the region is Sabic (Sittard, the Netherlands). During the Interplastica 2011 show the company's plastics businesses, including it polyolefins and engineering thermoplastics (ETP) businesses, will be exhibiting a broad array of materials for use in applications infrastructure, packaging, lighting and new energy. Sabic already operates a dedicated sales office in Moscow.

"We are targeting the fast-growing new energy and energy efficiency sectors such as LED and solar with a broad range of existing and new products," says Al Ghelani, regional manager, Eastern Europe for Sabic Innovative Plastics, its ETP business. "We are also a major supplier to other key sectors such as electronics, automotive and appliances, offering sophisticated material technology solutions and breakthrough application development. With a well-established local team and global technology resources, we believe we're well placed to deliver real value to customers in the CIS and the Baltic nations."

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