Russia's Sibur chems output up 7% in '08; predicts '09 decrease

10 February 2009 14:12  [Source: ICIS news]

LONDON (ICIS news)--Sibur increased chemicals production by 7% in 2008 to 14.79m tonnes driven by increased output of fertilizers and natural gas liquids (NGLs), the Russian chemicals group said on Tuesday.

Sibur said it expected a decrease in utilisation levels in 2009, however, due to lower demand for its products caused by the global downturn.

The company’s mineral fertilizer output grew 23% to 1.97m tonnes, while NGLs production was up 15% to 3.22m tonnes.

Rubber production experienced the biggest slowdown in 2008, decreasing 13% to 480,000 tonnes due to a drop in demand in export markets, primarily from China.

"In view of the significant deterioration of the pricing environment and a drop in demand for the company's products in the second half of 2008, we anticipate a decrease in utilisation levels in the current year”, said Sibur president Dmitry Konov.

“The company will continue its large-scale cost reduction programme in order to improve the performance of the group and maintain its market share,” he added.

Late in 2008 Sibur said it was cutting production at plants as the global economic downturn took its toll on customer demand.

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

Sibur also suspended its $5.4bn (€4.6bn) preliminary management buyout (MBO) agreement with Gazprom as the financial crisis affected the chances of meeting previously agreed prices.

($1 = €0.77)

By: Mark Watts
+44 20 8652 3214

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