Oil & gas
Development of Chemical Production
Samruk-Kazyna Ondeu LLP (hereinafter – SK Ondeu) was established in 2009 to organize and conduct research, expertise and other work required for the implementation of investment projects in the chemical industry in four areas of operation.
Key performance results
|
Indicator |
2021 |
2022 |
|
production indicators: |
||
|
liquid glyphosate production volume, thousand liters |
196 |
603 |
|
biaxial – oriented polypropylene film production volume, tonnes |
9 357 |
5 299 |
|
polypropylene bags production volume, million pcs |
15.5 |
15.5 |
|
sulfuric acid production volume, thousand tonnes |
194.5 |
175.4 |
|
electricity production volume, million kWh |
1.8 |
2 |
|
financial indicators, KZT billion: |
||
|
revenue |
36.1 |
37.5 |
|
net profit |
- 38.5 |
–144 |
|
operating income |
1.7 |
3.6 |
|
net debt |
72.6 |
67.3 |
|
taxes paid |
2.8 |
3.5 |
In 2009 the Fund established United Chemical Company LLP. The main purpose of the company’s activity is to promote the development of new chemical industries in Kazakhstan through equity participation.
In 2022, the company rebranded and since February 3 is called Samruk-Kazyna Ondeu LLP, the Company’s logo and corporate colors have been changed. It is planned to focus on the development of chemical industry production, including the processing of secondary materials (“ondeu”, translated from the Kazakh language “processing”). In 2022, changes in the geopolitical situation mainly caused not achieving production and financial indicators. The main product is Biaxiall oriented polypropylene film, exported (more than 80%) mainly to Russia. However, due to the sanctions restrictions in 2022, the market of the Russian Federation was oversaturated with its own similar products. This led to a significant drop in sales of SK Ondeu products in 2022.
In addition, the company faced a shortage of tank wagons for the transportation of sulfuric acid, which was caused by the recall of Russian wagons. This led to a shortage of the wagon fleet in the domestic market. But despite the changes in the market, the company has reached its planned income indicators.
The subsidiary producing agrochemical products in 2021-2022 faced a sharp rise in the price of the main raw material - glyphosate from China for the production of herbicides, which accordingly affected decrease in production volumes as compared to 2019-2020.
In order to minimize the negative impact of sanctions restrictions, the following measures were taken. The company increased its own wagon fleet, reoriented from exports to the domestic market, and concluded contracts for the supply of raw materials with local producers.
For the first time in the entire history of SK Ondeu operations, dividends were received from two Subsidiaries in the amount of KZT6.8 billion by the end of 2022. This had a significant impact on improving the financial stability of the companies group.
In 2022, a foreign currency loan from Sberbank of Russia JSC, raised in 2013 for the implementation of polymer products manufacturing project, was fully repaid.
The new Development Strategy of SK Ondeu for 2022-2032 was developed and approved, revealing the main trends in the development of the chemical industry of the Republic of Kazakhstan and promising areas.
With in the framwork of the Fund management assignment to reform Portfolio Companies and withdraw non-core assets in 2022, successful work was carried out to bring KPI LLP, KLPE LLP, Silleno LLP into KMG. The work on portfolio optimization will continue in 2023. Along with the withdrawal of non-core assets, the company is actively forming a pool of promising projects for subsequent implementation in accordance with the approved strategy.
Modernization
During 2022 the project was developed to expand a sulfuric acid plant on the basis of an operating enterprise in Stepnogorsk due to the annually growing demand for sulfuric acid. The expansion will allow to produce additional 193 thousand tonnes of sulfuric acid of the highest quality annually.
As a result of pilot tests of Polymer Production LLP, a technological line for the production of polyethylene sleeves launched at the production site. The line capacity is up to 4125 tonnes. The finished products will be oriented on the domestic market of Kazakhstan.
In 2022, the company submitted four R&D projects to the Scientific and Technical Council of Samruk-Kazyna JSC, which were approved for implementation. The first stage of the R&D project for the production of a bactericidal-fungicidal drug based on lump sulfur was successfully implemented.
In 2023, the company intends to implement the measures of the 2022-2032 Strategy aimed at improving operational efficiency, sustainable development and diversification of production. Work will continue on optimizing the portfolio of Subsidiaries by transferring non-core assets to the competitive environment.
It is planned to attract investor partners for the implementation of promising projects.