Russia PE processing capacity investment down 30% in 2015

Sergey Karaichentsev

11-Feb-2016

MOSCOW (MRC)–Investments in Russian polyethylene (PE) processing capacity decreased by 30% in 2015 and totalled $184m, with films and containers producers accounting for the greatest reduction in investments, according to the Annual Report “PE in Russia – 2016”.

The year of 2013 accounted for the peak of investments in PE processing equipment over the last nine years, after which investments of Russian companies decreased.

According to MRC’s data, about 700 kits of equipment for PE processing were shipped to Russia last year, whereas 900 production lines at the amount of $264m were imported in the previous year. Producers of films and containers by extrusion blow moulding (EBM) accounted for the main decrease in investments.

Russia PE 2015 processing capacity investment

Seventy-five lines for the production of PE films for the total amount of $22m were shipped in 2015, whereas 196 kits for the total amount of $56.5m were imported a year earlier.

Such a major fall in investment in the film products production was primarily caused by a significant growth of the equipment costs because of the rouble devaluation and rising credit costs. Some companies just temporarily froze their plans for capacity expansion.

The decline in procurement of equipment for the PE films production was also caused by the saturation of some segments, particularly, of the PE stretch films segment. Demand for this type of films developed very dynamically in the past seven years, but since last year the market has entered into a stage of saturation.

Companies that delivered lines for PE films production last year were: Vicona-SP, Aleko-Polymers, Atlantis-Pak, Foliopak and Polymer (Desnogorsk).

Last year’s investment in equipment for PE pipes production dropped to $15m, with 46 lines imported. Around $22.5m was spent for purchasing this type of equipment in 2014, and 53 lines were shipped.

The following companies that continued to expand their PE pipes production capacities in 2015 were: Polyplastic, Rosturplast, Water Supply and Sewerage Systems, Uponor Rus and Tekhstroy.

Forty-one lines for the production of PE containers by EBM for the total amount of $14m were imported in 2015. A year earlier, this figure was 56 kits, totalling $28m.

Lower investment in this PE processing segment was partially caused by the increased competition from PET containers (they actively displaced PE containers in the household and automotives chemicals, dairy segment, etc.).

The following companies expanded their production capacities last year – Serioplast, Delphine Distribyushen, Alpla and Stupino Chemical Plant.

MRC, a partner of ICIS, produces polymers news and pricing reports from Russia, Ukraine, Belarus, Uzbekistan and Kazakhstan


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