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Chem-Courier Agency held the conference CIS Acrylates in Moscow on 2 March 2020.

Chem-Courier Agency held the conference CIS Acrylates in Moscow on 2 March 2020. All the participants in the event were actively engaged in the discussion of the current situation, issues and the outlook for the Russian acrylic acid and derivatives market as well as the consuming industries.

 

Acrylate market yet to boom

0 IMG 20200302 101358-minThe Russian market for acrylic acid and its derivatives is just forming. The global one is considered rather developed though. Therefore, the conference began with the speech of Anna Valuyeva, the head of market research at Smartconsult, that covered the structure and the current situation in the acrylate market in Russia and worldwide and their raw material supply. The global acrylic acid and acrylates market has been growing steadily for three years now to gain 5% and 3.1%, respectively, by volume in 2019. Experts forecast it to expand at about this rate in the next five years as well. Asia Pacific, China in particular, is the main consuming region. Acrylates and superabsorbent polymers (SAP) account for almost 85% of the worlds acrylic acid consumption. BASF and Dow are the world's leading acrylic acid producers.

In Russia, the companies Sibur-Neftekhim and Gazprom neftekhim Salavat almost entirely meet domestic demand. They sell the commodity directly to dispersion and adhesive producers that are the only acrylic acid consumers in the country. SAP production, which is absent from the country now, and the continuing expansion of the butyl acrylate market are central to short-term development of the Russian acrylic acid one. Gazprom neftekhim Salavat is going to implement a SAP project.

Delegates also discussed the situation in the 2-ethylhexyl acrylate (2-EHA), methyl methacrylate (MMA), hydroxyethyl methacrylate (HEMA) and butyl methacrylate segments in Russia and all over the world. In Russia, 2-EHA is in production only at SIBUR and MMA at Korund. Acrylate ester manufacturing is undeveloped in the country. The conference participants said that the launch of these goods is essential to the progress of the markets for acrylates and the materials based on them, but the economic feasibility of such projects in terms of consumption as well as time and resource allocation still requires thorough evaluation.

 

Lack of major raw material resources inhibits development

0 IMG 20200302 132917-min The events Chem-Courier holds always feature a round table meeting, and so did the CIS Acrylates conference. Producers of acrylic dispersions and resins, acrylic acid and butyl acrylate, paints and coatings took part in the discussion. Matvey Rammo, the development director at Attika, shared the experience of developing acrylic resin manufacturing and the problems a company encounters when making a binder. Mr Rammo, in particular, emphasized that formulations contain vast amounts of raw material imports that are priced depending on exchange rates and subject to customs duties, some monomers have no domestic alternatives, many construction and production projects are fraught with excessive bureaucratic red tape, the cost of funds is high and professionals are rare.

Representatives of Russia’s largest acrylic and styrene acrylic dispersions producers – Pigment (Krata holding company), Acrylan, Homa and Orgkhimprom – told about production issues they faced in their work. All of them noted lack of domestic specialty monomers in Russia. Besides, prices for those produced in the country are at or above the level of quotes for imported material. As a result, even despite existing demand and facilities capable of producing high-quality high-technology materials, a manufacturer is not interested to develop such production because of uncompetitive prices. Today, companies show strong performance in the classic dispersions sector while the segment for specialty dispersions is still “promising”. Most current innovations are import-substituting materials. It is very difficult to introduce one’s own high-technology products because of the poor domestic raw material sources, personnel shortage and high cost of development compared to the base segment. Even when developing classic dispersions exports, producers face headwinds as high prices for domestic monomers used as a raw material affect competitiveness. Despite existing challenges, dispersions producers have room for growth. Discussion participants noted that the segment of “pure” acrylates and water dispersions for industrial coatings was yet to gain momentum.  

As many dispersions producers and other conference participants think one of the key problems in the Russian market is lack of domestic functional monomers and high prices for imported materials, Sergey Mushkeyev, the managing director of Jamorin International, told about solutions his company offered. Jamorin International is a distributor of a wide range of monomers (acrylates, methacrylates, hydroxyacrylates, polyester methacrylates) and other chemicals in Europe, Asia and other regions. The company sees good development prospects for specialty dispersions in Russia. However, the issue is that even the slightest increase in the formulation cost dampens the customer interest in the product. To promote its products in Russia, Jamorin International offers a wide range of products, technological support and various samples of formulations. Besides, Mr. Mushkeev said that the company worked not only with monomer consumers but with trading operators as well, for instance, with Petrovich building trading house. This cooperation is aimed at understanding what materials and with what properties a modern consumer requires. And based on those requirements, construction hypermarkets can build up a dialogue with paints and coatings producers, those with dispersions manufacturers and the latter with monomer suppliers.

 

Import substitution in consuming sectors yet to finish

0 IMG 20200302 155840-min The closing conference session was dedicated to consuming sectors, up-to-date opportunities for Russian producers and the future of the acrylates market. According to the research by Chem-Courier, Russian production of acrylic and styrene acrylic dispersions has surged by nearly 400% over the last 10 years. Many producers have ramped up their capacities significantly in this period, and today domestic players cover 74% of total dispersions demand in the country. Although styrene acrylic binders account for almost three quarters of production, the share of “pure” acrylates is expanding gradually. Viktoriya Chernova, the development director of Chem-Courier, said that Russian acrylic resins production was currently at this stage and was facing the same issues that dispersion makers saw ten years ago. Over this period, the acrylic resins market capacity has shown a roughly tenfold increase but foreign materials still account for almost 90% of consumption. Resins are mostly used in paints and coatings production, of anticorrosion and marine coatings in particular, coil-coatings and road marking paint.

Irina Kuleshova, the head of the research and development centre, the lead specialist for acrylic monomers and acrylic copolymers at Prime Top Industry, told that acrylic resins development had been at the high level in the Soviet period. In view of tight restrictions on foreign material use, innovations by domestic scientists had a wide range of applications (automotive industry, military-industrial complex, coil-coatings) and the country produced great volumes of acrylic resins and derivatives. According to Ms. Kuleshova, now Russian acrylic resins production can be driven by domestic innovations and developments rather than imitation of foreign goods. And advanced laboratories, domestic raw materials sources, functional monomers in particular, and the government support are vital for the sector.

In summary of the CIS Acrylates conference, it is evident that the subject of development prospects for the Russian acrylates market is essential and it would be difficult for the sector to evolve unless those issues are solved. In 2021, at the second conference CIS Acrylates, we will see how successful industry players have been on their way to the market development.

SNHK selects delegates
Tuesday, 18 February 2020
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SNHK (Salavat Petrochemical Complex) will take part in the Acrylates in CIS conference. The company is selecting delegates to the event.

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Svetlana Pavlikova, the head of styrene acrylic dispersions department at Homa Group, will speak at the conference on Using Specialty Acrylates as Part of Aqueous Copolymer Dispersions Composition.

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Dovid Aronovich, the deputy head of department at the Polymer Research Institute (Dzerzhinsk), will give a talk on the Polymer Research Institute’s Capabilities in Specialty (Meth)acrylic Monomer and Oligomer Synthesis and Production.

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SmartConsult marketing research manager Anna Valueva will deliver the speech Global and Russian acrylic acid and derivative markets: raw material market impact and capacity balance.

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The regional sales manager at Opes International (Bedfordshire, UK) has confirmed his participation in Acrylates in CIS conference.