Mikhail Katsevman: Russia annually exports polymer items worth $1 billion while purchasing 3 times more

At a joint meeting of RUIE (Russian Union of Industrialists and Entrepreneurs) Chemical Industry Committee and the Russian Chemical Union, Chairman of the Russian Association of Plastics Processors and Head of R&D of R&P POLYPLASTIC Mikhail Katsevman once again placed the emphasis on “polymer discrimination” and hardships of polymer compounders and plastic processors. 

“In a nutshell, situation today is as follows: there is steady growth of production of main raw materials leading to a domestic surplus of polymers. Against this background we are witnessing difficulties of Russian processors: they are facing deficit of raw materials and problems with production profitability”, says Mikhail Katsevman.

According to the expert, this is leading to increase of “polymer discrimination”. As a result, even with surplus of main raw materials Russia is forced to annually import almost 20% of finished polymer goods at the amount of $4 billion. Within the period of five years, finished goods worth $25 billion were imported to Russia. And, most often these were mass products such as films (30%), sheets (15 %), stationery and accessories (10 %).

“When exporting main polymers Russia is providing cheap raw materials to foreign countries. Later Russian plastics return to our country in the form of expensive products. I believe that we should follow the example of Turkey, which exports up to 2 million tons of finished goods per year becoming one of the largest hubs for plastics and polymers procession. Poland and China are abiding by the same policy”, notes Mikhail Katsevman.

However, the peculiarity of Russian plastics procession industry is that it is very sensitive to even minor market fluctuations and raw materials price hikes. The matter is that currently within the subindustry functional model around 1 million (23, 5%) tons of raw materials per year are used by small and extra small enterprises. And of course, they are mostly affected by any crises sustaining heavy losses. Eventually, small polymer business is dying off posing a threat to regional industrial development and the prospectives of overcoming “polymer discrimination”.   

According to Mr. Katsevman increase of the plastics procession industry effectiveness is possible only with the help of a diversified regulatory base. Lack of such regulatory base and heavy import reliance (up to 80%) is the main reason for the industry’s dependency on international economy fluctuations and its lack of protection by domestic laws.

Proposed measures include demand generation for polymer materials at a national level, support for export of manufactured goods, improvement of technical regulation and standardization, capacity building and development of management skills. Experts say that these measures can be effective not only for small polymer business but also for industrial leaders and will contribute to acceleration of localization processes. We already have some successful cases: one of the leading Russian compounders R&P POLYPLASTIC is substituting imports in many key branches of the Russian industry from 25% to 75% depending on the industry.   

According to analysts, total polymer capacities in Russia by the end of 2025 will amount to 14 million tons while plastic procession at the best will only reach 8 million tons. That is why we should start dealing with this disproportion and taking meaningful steps today.