Russia's Sibur strengthens its petrochemical business

Russian petrochemical firm Sibur has announced the initiation of steps to acquire a controlling stake in the processing operations of oil and gas refiner TAIF.

The deal will make the Russian oil company one of the world’s top producers of polymers and synthetic rubber.

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Existing TAIF shareholders will receive a 15% stake in PJSC SIBUR Holding in exchange for the transfer of a controlling interest in TAIF’s group of petrochemical and energy companies. The remaining stake in JSC TAIF can be subsequently purchased by the combined company.

The combined competence will make the new company’s petrochemical operations more competitive in the global market, improve its resilience to market fluctuations, and also unlock further growth potential of Russia’s petrochemical industry through the joint realisation of capital-intensive projects.

The transaction will also bring new jobs and opportunities for sustainable development and environmental management. Furthermore, the new combined company will benefit from improved resource base diversification, distribution and logistics optimisation, joint R&D development, and sharing operational best practices to maximise the efficiency of its assets.

Upon realisation of Sibur’s and TAIF’s already approved investment projects, the combined company will be one of the world’s top 5 producers of polyolefin and rubber products.

Dmitry Konov, Chairman of the Management Board at Sibur Holding, said: “TAIF Group boasts an unrivalled portfolio of products and technologies. Powered further by Sibur’s capabilities, the new combined company will be able to deliver an industry-leading growth programme.

"By combining our assets and professional teams, we will further boost productivity at Russia’s leading petrochemical facilities and also significantly improve the competitive position of the Russian petrochemical industry on global markets.”

Employing over 22,000 people, Sibur is the largest integrated petrochemicals company in Russia and one of the fastest-growing companies in the global petrochemicals industry.

Sibur’s petrochemicals business utilises mainly its own feedstock, which is produced by the Midstream segment using by-products purchased from oil and gas companies. In 2020, Sibur reported revenue of USD 7.2 billion and EBITDA of USD 2.5 billion.

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The deal will boost Sibur’s annual production capacity 40 per cent above 2020 levels to more than 7.2m tonnes, according to the company.

The deal expands not only its capacity but also the eastern Russia-focused geography, giving it a strong foothold in central Russia, with greater access to the European market.

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