Rupec: Resins live in hope

Import substitution of composite materials in Russia has been discussed for quite a long time. The first state programmes aimed at this purpose will soon celebrate their ten-year anniversary. In the chemical industry the authorities are now putting emphasis on import substitution of binders for composites - various resins. As for the segment of polyester resins, there are already implemented projects both for production of raw materials and final products. The epoxy resins segment was marked in 2023 only by the announcement of new future projects.

Russian market of composite materials

The market of composites in Russia is relatively small. It is estimated approximately in $1 billion. It is about 1% of the world volume. As a comparison, the share of the leaders, for example, China accounts for about 32%, the USA - about 26%. The market is considered to be growing. Moreover, it was growing even under the coronovirus pandemic conditions.

Spheres of composite materials consumption in Russia are slightly different from the world ones, but the leading, as well as in the whole world, is the construction industry, followed by shipbuilding, machine industry, aircraft engineering, electronics, radio engineering etc.

The potential of the Russian market is rated high enough due to the fact that the consumption of composites per capita in Russia is significantly behind the world indicators. In the EU countries there are from 3 to 11 kg per inhabitant annually (depending on the country), in the USA - about 7 kg, in Japan - about 6 kg, in Turkey - 3,5 kg, in Russia - about 0,5 kg. This value is growing, but still very slowly.

Authorities see polyester and epoxy resins as the problem

One of the constraining factors of the composite materials market development in Russia is import dependence. At the state level the attempts to stimulate the import substitution of composites started to be made even during the first sanctions wave, in 2014. Then the Import Substitution Programme was established. Within this programme in 2016 the Government of the Russian Federation approved the Action Plan on import substitution in the chemical industry, which included the projects on the production of chemical components for composites. In 2021 the Ministry of Industry and Trade developed a separate Action Plan on import substitution in the industry of composite materials (composites) and products made of them in the Russian Federation till 2024. And in 2022 it was corrected. Finally, the technological sovereignty project "Import substitution of critical chemical products" is now under development at the Ministry of Industry and Trade, which also includes the projects related to composites.

The main problem of composite production from the point of view of chemical industry the Russian authorities consider the lack of binders for composites - different resins. In the Action Plan on import substitution in the industry of composite materials, updated in 2022, there are two groups of chemical components for composites, where the main import dependence is observed: epoxy resins (57 thousand tonnes per year, according to estimates of the Ministry of Industry and Trade), as well as acrylic, polyester and alkyd resins (85 thousand tonnes per year, according to estimates of the Ministry of Industry and Trade). In the second group, polyester resins account for the base quantity demanded.

Polyester resins: capacity growth and domestic raw materials

Russia has vast experience in the production of polyester resins. As of the beginning of 2022, the volume of domestic production ranged from 30 to 50 thousand tonnes. There is no official and more precise data, as Rosstat does not separately record data on this production. There were a little over 10 manufacturing companies in the country. Among them: Dugalak, Attica, Raduga-Synthesis, Kamtex-Polyesters, Polimerprom, Electroizolit, Perm Polyesters.

But their capacities did not cover the needs of the Russian Federation. Consumption of polyester resins in Russia was about 70 thousand tonnes. In addition to insufficient capacity, there was also the problem of imported raw materials for polyester resins.

However, since 2022, there have been serious upheavals in import substitution of polyester resins. In September 2022, Dugalak (the Russian market leader) opened a new polyester resin production facility with a capacity of 30 KTA at its industrial site in Yaroslavl. At the end of 2022, the group of companies "Attica" opened its second polyester resins production facility. It is located in Neftekamsk and has a capacity of 7,000 tonnes per year.

There is also progress in the production of raw materials for polyester resins. In 2018, Sibur started implementing a project in Tobolsk to construct the production of maleic anhydride, the main feedstock for polyester resins. The project was launched in 2022. As of 2022 year-end, Sibur's maleic anhydride in Russia covered 30% of the market demand. In 2023, its share has already reached 80%, and the total consumption of maleic anhydride in Russia amounted to 11 thousand tonnes. At the same time, the real production potential in Tobolsk is much higher - its capacity is 45 thousand tonnes per year.

In 2023, another Sibur plant in Nizhnekamsk started domestic production of propylene glycol, which is also used in the process of polyester resin production. However, its capacity is lower - 8 thousand tonnes, and it covers only 20% of the total demand of the domestic market.

Thus, in terms of the volume of polyester resins required by the market, we can say that domestic producers already have the capacity to meet these needs.

Epoxy resins in Russia: hope for the future

Epoxy resin production is not new for Russia either. The USSR had its own significant production base, which accounted for about 10% of the world volume. However, in the 2000s most of the production facilities were closed down. The last Russian production of epichlorohydrin, the basic raw material for epoxy resin, was also closed down.

The volume of domestic production, according to Rosstat data, was about 4.3 thousand tonnes by the end of 2022. According to Rupec estimates, it does not exceed 2 thousand tonnes. The core product was manufactured, as of 2022, only at the Plant named after Sverdlov in Dzerzhinsk. However, imported epichlorohydrin was used for it. There are about a dozen final product producers, but they processed either products from Dzerzhinsk plant or imported products.

As of the beginning of 2022, the demand for epoxy resins in Russia, according to the Ministry of Industry and Trade, was 57 thousand tonnes per year. Rupec estimates that consumption in 2022 reached 41 thousand tonnes. That is, as of 2022, domestic epoxy resin covered from 5 to 8% of domestic needs, while using imported raw materials. The main import until 2022 came from South Korea, Germany and China. In 2022, China started to increase its positions.

As it is a more complicated production, the situation with epoxy resin projects is now much worse than in the polyester segment. In September 2023, group of companies "Attica" announced a project to construct "Russia's first full-cycle epoxy resin production facility". The projected capacity is 18,000 tonnes. Its launch in stages is scheduled for 2024 - 2025. At the same time, the company promises a new modern technology "for epoxy resin synthesis, making it possible to completely eliminate negative environmental impact".

Moreover, at the end of 2023, it came to light that Roskhim included epichlorohydrin production in the project of the Federal Centre of Chemistry in Usolye-Sibirskoye at the second stage of its implementation, and then epoxy resin production. However, the project has not been approved yet and implementation timeline is not known. Most likely, the approval of the project should be expected in Q1 2024, together with the approval of the technological sovereignty project "Import substitution of critical chemical products", the Federal Centre is a part thereof.

Titan Group has not officially abandoned its plans to set up epoxy resin production. It announced them long ago, but the project was postponed. Nevertheless, in summer 2023, the head of the group of companies Mikhail Sutyaginsky reported that in 2024 Titan would have its own epoxy resin production technology. The investment cost of the entire industrial chain, including necessary bisphenol and polycarbonate production, is estimated at 60 billion rubles.

Remaining problems

Thus, despite the existing projects, we are unlikely to see full-fledged domestic production of epoxy resins before the end of 2024. And regarding import substitution of polyester resins, despite the fact that Russia has enough capacities for their production in terms of output, the current problems include partial dependence on imported raw materials and limited product range of domestic producers.

Author: Dmitry Semyagin
The material was prepared based on the report presented at Amtexpo forum-exhibition.

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