Business Russia LLC: Perspectives of low-tonnage chemistry were discussed in Business Russia

On May 29, the chemical industry committee of Business Russia held a meeting dedicated to the challenges and perspectives of low-tonnage chemistry development in the time of change.

The event was attended by over 80 representatives of business, scientific community and regional authorities as well as students from specialized universities.

President of Business Russia Pavel Titov, Deputy Minister of Industry and Trade of the Russia Mikhail Ivanov, President of the Russian Union of Chemists Viktor Ivanov, Rector of the D. Mendeleev University of Chemical Technology of Russia Alexander Mazhuga, Director of the Projects Department of the Industrial Development Fund Evgenia Shilyaeva, Department Head of the Customer Service Industry, the industry leader of the chemical industry of PJSC Sberbank Natalya Ermakova and also representatives of the sector-specific business took part at the meeting. The session was the moderated by the Chairman of the Chemical Industry Committee Mikhail Sutyaginsky.

Pavel Titov stressed in his introductory speech that Business Russia became the expertise center of this area thanks to the chemical industry committee work, and materials prepared by the committee which are “very insightful and helpful for communication with the Government”. “He noticed that in the current economic situation the Business Russia took upon itself the role of the business voice in the communication with the Government, and it is pleasure to see that most of our proposals are accepted and used as business support measures”.

Mikhail Ivanov informed of the industry situation, the implementation of import phase-out projects, and the government support of low-tonnage chemistry. “In the last five years the low-tonnage chemistry industry has been receiving more than 3 billion rubles relative to our financial various instruments. He pointed out that first of all, these are loans, the Industrial Development Fund programs and subsidization of the costs for conducting the Research and Development activity”.

Deputy Head of the Industry and Trade Ministry also mentioned that new Special Investment Contract (SPIC 2.0), aimed on the development of advanced technologies in Russian territory. The selection of technological directions for signing of SPIC 2.0 is open on the state industrial information system platform until June 5. A the end of his speech Mikhail Ivanov has emphasized that the development of law-tonnage chemistry “has the strategic character” and the scope, which is already placed in many areas holds out a hope of achieving the forecasted growth rate of production by 5% this year.  

Victor Ivanov noted that the further development of chemical industry and associated sectors is not possible without the creation of high-tech low-tonnage chemistry. He also pointed out that Russia needs a development of supporting measures for the enterprises which will motivate them on creation of special law-tonnage chemistry production facilities.

Alexander Mazhuga presented statistics confirming that the recession of production volumes in the industry affected above all the law-tonnage chemistry. He specifically commented on the affect of pandemic to the demand of chemical products and outlined the perspective areas in low-tonnage chemistry. According to the presented data, during the pandemic the demand for the chemical products of nutrients, pharmaceuticals and hygiene markets has increased. However there has been recession in the energy, construction, automobile industry and mass marketing sectors.

Evgenia Shilyaeva told about fund of development of production (FDP) activities. Chemical industry takes the third place in the list of projects financed by FDP. Most of them are financed under the program of fund for development of production, which is targeted on the initiatives of imports phase-out and the implementation of the best available technologies and export.

Natalya Ermakova emphasized that the enterprises should be more flexible in order to switch from one product to another. The average law-tonnage chemistry project submitted for funding to Sberbank is estimated from 300 to 500 million rubles, and usually the companies applying for financing facilities are those with fragile financial condition. On top of that it is very difficult to forecast the project’s efficiency because of market volatility and high dependency on the imported feedstock. When operating companies create subsidiary enterprises and fund them it offers a means to receive the additional guaranties related to the possibility of the debt management. Natalya also stressed that the law-tonnage chemistry is characterized by the significant amount of research and development works (R&D). But according to the bank research the R&D scope is among the industries with the highest multiplicative effect on GDP growth in the course of government support and subsidization to this sector.

The state government representatives, committee partners from the Roskhimreaktiv association also attended the event, and its general director Irina Vendilo pointed  out the dependency of law-tonnage chemistry manufactures in a range of positions from the imported feedstock which became apparent during the pandemic. She emphasized once again the relevance and significance of the import phase-out program.

The representatives of sector-specific business shared their vision of the situation in the industry and talked about the challenges they have recently faced.

At the end of the meeting Mikhail Sutyaginsky congratulated his colleagues with the upcoming Chemist's Day, which is celebrated on May 31. He emphasized that “the development of law-tonnage chemistry today is taking on a completely different meaning and is generating considerable interest from all sides”. The head of the committee also assured the meeting participants that the issues raised during the meeting will be classified and formulated where practical in the form of initiatives and proposals which will help the low-tonnage chemistry development in Russia.

Source:  “Business Russia” LLC, 29.05.202

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