Sibur (Moscow / Russia; www.sibur.com) reported a 13.1% rise in adjusted EBITDA to RUB 168.7 bn (EUR 2.4 bn) in 2017, despite lower contributions from its petrochemicals businesses. The Russian petrochemical and gas processing giant attributed the higher group earnings to higher prices for energy products. Earnings from its petrochemicals businesses – Olefins & Polyolefins and Plastics, Elastomers & Intermediates – declined as a result of flat spreads, despite higher sales volumes of PP, PE and elastomers. Group revenues grew by 10.4% to RUB 454.6 bn on the higher PP, PE and elastomers sales volumes, as well as positive price dynamics for LPG and elastomers.

EBITDA from Olefins & Polyolefins fell by 8.7% to RUB 44.6 bn, while revenues climbed 1.5% to RUB 88.1 bn. In the Plastics, Elastomers & Intermediates business, EBITDA declined by 3.6% to RUB 30.6 bn on sales up 12.4% at RUB 146.9 bn.

The company increased sales volumes of most of its petrochemical products last year. PP sales rose 10.9% to 598,000 t, while sales of PE were up by 12.6% to 268,000 t – both boosted by the increased production at new and upgraded facilities in Tobolsk and Tomsk in Russia. Sales of elastomers increased by 9.7% to 485,000 t, lifted by higher SBS production in Voronezh / Russia, on the back of an improved market environment, Sibur said. However, sales of plastics and organic synthesis products declined by 0.6% to 771,000 t. The company’s PP production rose by 10.0%, while production of PE rose by 10.9% and production of elastomers grew by 9.0%.

Capital expenditure decreased by 7.0% to RUB 135.3 bn in 2017, mostly on currency fluctuations for contracts denominated in euros and US dollars, as well as substantial advances paid in 2016 relating to equipment deliveries for subsidiary company ZapSibNeftekhim’s petrochemicals project in Tobolsk.

Sibur expects the ZapSibNeftekhim project to reach mechanical completion in the second quarter of 2019 (see Plasteurope.com of 10.04.2018). The complex is expected to triple Sibur’s polymers capacity and nearly double Russia’s polyolefins output. Board chairman Dmitry Konov said the USD 9.5 bn (EUR 7.7 bn) project was almost 75% complete at the end of February, with a USD 4.2 bn investment earmarked for the 2018-2020 period. The site will not be operational for about nine months after mechanical completion, with production then ramping up gradually after that. According to Plasteurope.com's Polyglobe database (www.polyglobe.net), capacities at the ZapSibNeftekhim site are expected to be 1.5m t/y of ethylene, 500,000 t/y of propylene and downstream 1.5m t/y of PE and 500,000 t/y of PP – see Plasteurope.com of 28.04.2016.