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Fast LLDPE growth in Russia

By NEWS SYSTEM
Published: March 7th, 2007
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Many Western experts predict forthcoming replacement of obsolete LDPE with new, more efficient LLDPE. The world LLDPE consumption during 2006-2010 will be increasing in average by 7.9%, whereas the LDPE consumption will be growing by only 1.9%. Today, the replacement process is going on in the USA and Western Europe. This scenario is expected in the market of Eastern Europe and Russia.
According to the assessments of the analysts of MRC, the Russian LLDPE market grew up by 75% in 2006 and constituted more than 59 KT. At the same time, the key supply volumes (more than 80%) belong to brands used in the production of stretch films. Today, the most popular brands in the Russian market are: Dowlex SC2106 of Dow, Exceed 2718CB of Exxon Mobil, UR644 / Hyundai Petrochemical, as well as F-0220-S /Shurtansk Gas-Chemical Plant, which is used in the composition of film blends. There are more than ten companies dealing with the production of stretch films: Regent-Stretch, Lava, Uralplastic, Polymer (Desnogorsk), Vario Pak, Kristi-98, Packaging Materials Plant (Tumen), Novoroll, Plastbalt, etc.

For the time being, in terms of LLDPE consumption per capita, Russia is yielding to many Asian countries, moreover, comparing with China, our level is 13 times lower than that in China! By 2010, the Russian LLDPE market will be one of the most dynamic markets in the world: the annual growth will constitute more than 21%. We can say that this is a quite underestimated figure. If we assume that by 2012 Russia is going to consume the same volumes of LLDPE that are consumed in Brazil, which can be compared with Russia in terms of the population, then the Russian LLDPE market may increase by more than 15 times by that time.

The analysis of investment activities of Russian film manufacturers indicated that within the recent seven years more than 90% of purchased equipment could not process linear polyethylene without significant design debugging. Many processors may still not afford new equipment. According to the assessments of MRC, the replacement of the old equipment with new one will be taking place within the nearest five-ten years.

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