Russia's Sibur to cut output, face project delays

23 October 2008 11:34  [Source: ICIS news]

RussiaLONDON (ICIS news)--Russia’s largest petrochemicals producer Sibur on Thursday said it was cutting production at plants as the global economic downturn took its toll on customer demand.


Sibur said it would focus on significant cost cutting measures to offset the negative trading environment, but did not comment on any potential loss of jobs.


The company could also face delays in building new petrochemicals plants in Russia due to an increase in the cost of loans for new projects.


Several new plastics projects had been announced over the past year and a proposed gas chemicals complex in the Siberia region.


“Management are reviewing all elements of these plans to ensure that they are properly aligned to the turbulent trading and financial environment,” it said in a statement.


“Furthermore, Sibur also reviewing the temporary reduction of production volumes, setting new priorities for the investment programme and tighter management of working capital,” it added.


Last month, Sibur suspended its $5.4bn (€4.2bn) preliminary management buyout (MBO) agreement due to the financial crisis affecting the chances of meeting previously agreed prices.


Gazprombank, the banking subsidiary of gas giant Gazprom, currently controls a 75% interest in Sibur, while Gazprom's pension fund Gazfond owns the remaining 25%.


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($1 = €0.78)

By: Mark Watts
+44 20 8652 3214

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