Russia: Industrial Products Eurochem and Chemchina Consider Joint Production in Russia

Fertilizer company Eurochem and Chemchina signed a Memorandum of Intent for a potential partnership to jointly produce industrial products in Russia.

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St. Petersburg/Russia — Both companies agreed to form a working group to further evaluate the technical feasibility of the project and will carry out due diligence.

Under the Memorandum, the companies consider jointly starting production of industrial products, specifically propylene oxide (propylene glycol and polyols) and isocyanate (MDI/TDI). The former has vast application across many industries, including for the development of synthetic lubricants, surfactants, and polyurethane products, with the latter mainly used for thermal insulation in construction. This will be the first production of its kind for Russia and the CIS which currently rely on imports from Germany, the Benelux countries, the US and Japan. Future output is expected to be sold predominantly in Russia to meet growing internal demand.

If it goes ahead, the project will be implemented at Eurochem’s Novomoskovskiy Azot plant in the Tula region, Russia. Subject to preliminary estimates, the Project may cost approx. $ 500 million. The project might also attract other potential investors, with the prospect of additional financing from Russia and China, Eurochem says..

Dmitry Strezhnev, Eurochem CEO, commented: “We are looking forward to working with Chemchina. This mutually beneficial partnership would complement our existing production, whilst also ending Russia’s reliance on imports through this first production facility of propylene oxide and MDI/TDI in the country.”

Separately, Eurochem signed a Memorandum of Understanding with the Russian federal and Tula regional authorities to conclude a trilateral special investment contract in support of this potential Project in the Tula region.

Both of the memorandums were signed at the St. Petersburg International Economic Forum.

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