SIBUR Undergoes Business Transformation To Strengthen Focus On Russian Market

In a significant shift aimed at enhancing its operational efficiency and better serving the burgeoning demands of the Russian market, SIBUR, Russia's premier petrochemical conglomerate, has announced a strategic overhaul of its business management model. Starting April 2024, the company will transition from its current product division-based structure to an industry-focused model. This move is designed to more effectively meet the needs of Russian customers across various socially important industries.

The restructuring will see the replacement of SIBUR's existing divisions—Basic Polymers, Plastics and Organic Synthesis, and Synthetic Rubbers—with new industry-specific divisions. These will include Agribusiness, Recycling, Flexible Packaging, Rigid Packaging, Engineering and Transport Infrastructure, Healthcare, Oil and Gas Processing and Production, Consumer Goods, Construction, Transport, E-commerce, and Partnerships.

Since 2014, SIBUR has been on a path of rapid expansion, more than doubling its production of core products. The company's commitment to innovation through rigorous research and development efforts has led to the introduction of new, more sustainable and energy-efficient products annually. These products not only serve as alternatives to less eco-friendly options but also aim to reduce imports by finding new applications for proven products.

In 2023 alone, SIBUR launched 27 new grades of petrochemical products, potentially adding 111 thousand tonnes per year to its sales volume. Over the last decade, the consumption of polypropylene and polyethylene in Russia has surged by 35%, thanks in part to SIBUR's initiatives to stimulate demand for polymers and support its customers through various programmes. This has contributed to a more than 30% reduction in polymer imports into the Russian Federation since 2014.

The upcoming operational commencement of the Amur Gas Chemical Complex and a new polypropylene production facility in Tobolsk (DGP-2) are expected to further boost polymer consumption in Russia. These facilities will play a crucial role in advancing import substitution programmes for finished products made from modern synthetic materials.

SIBUR's strategic pivot towards an industry-based model underscores its commitment to supporting the comprehensive development of every petrochemical-consuming sector in Russia. The company aims not only to meet the growing demand but also to promote the adoption of high-tech materials across industries. Notably, polymers account for 37% of packaging materials in Russia compared to an average of 50% in other countries. Furthermore, the use of polymer solutions in Russia's housing and utilities sector stands at no more than 40%, significantly lower than Europe's 85%.

With developed countries like Turkey reporting per capita polymer consumption rates as high as 52 kg—surpassing Russia's 30 kg—SIBUR's new industry-based model is poised to unlock vast opportunities for Russian manufacturers. By encouraging the use of domestic solutions and exploring new applications for their products, SIBUR aims to foster closer collaboration with its customers. This collaborative approach will facilitate the testing of new ideas and hypotheses for product line development and applications.

SIBUR's transformation reflects its dedication to driving growth within local production sectors by leveraging its extensive network of R&D centres. These centres are instrumental in swiftly addressing customer needs for support in launching new products and formulas. Through this strategic realignment, SIBUR is set to enhance its role as a key player in Russia's petrochemical industry while contributing significantly to the nation's economic development.