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Industry news                                                                           PLASTIC PIPES 2018


         GREW BY MORE THAN 40%


             IA Rating reports that Russia’s chemical industry output has   chemical products in the domestic market. The latter was
         R grown by more than 40%. Growth has been registered for 7   stimulated by the Government, import substitution and post-crisis
          consecutive years, making it one of the highest performing sectors   demand recovery.
          of Russian industry. Interestingly, a similar growth spurt occurred   Import substitutions particularly impacted the production
          in Soviet Russia in 1981–1987, when chemical industry production   of  household  cleaning  goods,  perfumers  and  cosmetics  which
          grew by 38% in a 7-year period.                     increased by almost 8%. The 7% growth in plastic goods production
            According to RIA Rating experts, chemical production in Russia   appears to be a result of increased demand for polymers in primary
          grew by 4% at the end of 2016. Russia produced 20.5 million tonnes   forms.
          of mineral fertilisers and around 7.5 million tonnes of plastics in   Across the chemical industry, internal factors prevailed over
          2016, which is 10% and 2.3 times more than in Soviet Russia in 1987   external influences during 2016. Some types of chemical products
          accordingly.                                        saw increased export levels, however in monetary terms, export has
            One of the major growth factors was the significant investment   shrunk.
          made into the creation of new capacity as well as modernisation of   Force majeure was one of the negative factors which impacted
          existing facilities. Total investment in the chemical industry over the   the chemical industry. The accident at Angarsk Polymer Plant
          last seven years was almost 1.5 trillion roubles. In 2016, the investment   led to a prolonged stand still causing sharp shortages in raw
          volume at face value was 3.7 times higher than the results of 2010.  materials at Sayanskchemplast. As a result, the second quarter
            Within this boom period a number of large enterprises were built   saw a sharp deterioration of the production dynamics in several
          from scratch including Poliom (Omsk), Tobolsk-Polymer (Tuymen   types of products, especially PVC. Both companies resumed
          Region), RusVinyl (Nizhniy Novgorod Region), Ammoni (Republic   their activity in the third quarter, but nevertheless, production
          of  Tatarstan)  and Ammonia-4  (Novgorod).  As  well as these new   of PVC in Russia shrank and imports of this polymer grew
          facilities, there has also been expansion and modernisation of the   during the year.
          plants built during the Soviet era.                   It is expected that the positive trend will continue during 2017,
            2016’s positive results are due to several factors including an   albeit at a slower pace compared to 2016 as most companies have
          expansion of production capacity and increased sales of Russian   reached their full capacity.

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