Sibur, TAIF combining rubber, petrochemical assets

Moscow – Sibur and Russian energy group TAIF’s have started the process to combine their petrochemical assets to create “one of the world’s top five producers of polyolefin and rubber products.”

As part of the deal, existing TAIF shareholders will receive a 15% stake in Sibur Holding in exchange for the transfer of a controlling interest in TAIF’s group of petrochemical and energy companies, said a joint statement by the two Russian groups on 23 April.

The assets include major rubber and materials producer Nizhnekamskneftekhim and polyethylene manufacturer Kazanorgsintez, Sibur confirmed in a separate statement to ERJ on 23 April.

Following the merger, "Sibur will stay Sibur, but will include TAIF’s petchem assets," the statement to ERJ added. 

The deal, the size of which was not disclosed, will be closed subject to completion of the relevant corporate procedures and receipt of necessary regulatory approvals.

The combination will aim to make Sibur's petrochemical operations "more competitive in the global market” and "unlock further growth potential," said the joint statement.

Furthermore, the combined entities will benefit from “improved resource base diversification, distribution and logistics optimisation and joint R&D development,” the parties added.

In particular, the merger will facilitate more efficient distribution of feedstock and improve capacity utilisation and further development of the petrochemical cluster in Tatarstan. 

“By combining our assets and professional teams, we will further boost productivity at Russia’s leading petrochemical facilities," said Dmitry Konov, chairman of the management board at Sibur Holding.

The move will also significantly improve the competitive position of the Russian petrochemical industry on global markets, he added.

The divestment will help TAIF to go ahead with its key projects in its 2030 strategic development programme which will see over RUB 1.5 tn (€16.5 billion) of investment over the next ten years.

TAIF key business lines include oil refining and gas processing, chemicals and petrochemicals, energy, and investments. 

Its chemical and petrochemical product portfolio comprises 581 commodities, with synthetic rubbers, various grades and types of polyethylene, polypropylene, polycarbonate, and styrene plastics being the largest-scale products.

According to the joint statement, TAIF Group’s share in Russia’s 2020 total output of rubbers and plastics was 64% and 28%, respectively. 

Sibur declined to give further details on production capacity of the combined businesses.