RusVinyl (Equity)

Location:

Russia

Project number:

37630

Business sector:

Manufacturing and Services

Notice type:

Private

Environmental category:

A

Target board date:

20 Jul 2010

Status:

Disbursing

PSD disclosed:

18 Jun 2010

Translated version of this PSD: Russian

Project Description

The proposed investment is for the construction and operation of a modern 330,000 tpa PVC (Polyvinyl Chloride) plant to be located in Kstovo, in the Nizhniy Novgorod region of the Russian Federation.

The plant will be operated by RusVinyl, a parity JV set up by SolVin GmbH & Co KG. (“SolVin”) and OAO Sibur Holding Company (“Sibur”). With this investment, RusVinyl will have a strong commercial base in Russia and will benefit from the contribution and involvement of its both founders in particular with the supply of the main raw material by Sibur, and the granting of know-how and modern technologies from SolVin .

Transition Impact

The transition impact potential of the Project is derived primarily from setting standards for the Russian chemical industry. The project will channel Western technologies and know-how as well as crucial industry expertise into the Russian petrochemical sector where margins of improvements are existing. The Project’s success has the potential to enhance the modernization of the Russian petrochemical industry by giving motivation to the other producers to improve their efficiency and products’ quality.

Fostering environmental awareness and greater energy efficiency is another potential merit of the project. SolVin is a global leader in using environmentally friendly technology in several steps of the production process of PVC. In particular electrolysis membrane technology allows to avoid the use of mercury in the manufacturing process and is more energy effective. Moreover, creation of a new petrochemical facility consuming additional volumes of hydrocarbon feedstock will further intensify Russia’s utilisation of often flared associated petroleum gas that is the main raw material source for Sibur and the Project.

PVC, the target product of the Project, is an essential polymer material for the construction industry that due to the existing substantial deficit of PVC in the Russian market has been deprived in its ability to support the rebuilding and reconstruction of civil infrastructure in Russia.

The Project will be supporting an FDI in partnership with a local company that could encourage other potential FDI partners to be engaged in Russian manufacturing industry.

The Client

OOO RusVinyl, a company set up in Russia by SolVin and Sibur to construct and operate the PVC plant in Kstovo.

OAO Sibur Holding is the leading associated petroleum gas processor and petrochemical producer in Russia.

SolVIn is an established leader in the PVC market with extensive industry experience and in-depth product knowledge. SolVin is 75% owned by Solvay S.A. and 25% owned by BASF.

EBRD Finance

The EBRD will provide up to EUR 52 million to the Project in the form of an equity investment.

A potential participation of the EBRD in the debt financing is also being considered.

Environmental Impact

The project was categorised A/0 (2003 Environmental Policy), requiring an Environmental Impact Assessment (EIA). The EIA, social summary, Environmental and Social Action Plan and Public Consultation and Disclosure Plan were completed and were published on the Bank’s website in English and Russian in February 2008.

The key issues on this project that were studied included site selection, reviewing potential environmental impacts of the new plant, raw material supply, process control (emissions, heat and noise exposure, cooling water, energy supply, waste disposal, etc.), worker health and safety and PVC product issues. The Russian EIA study included a complex evaluation of two alternative sites and concluded after assessing ecological and economic parameters that plot #1 in the industrial area of Kstovo was the preferred location. The main social issue was the proximity of approximately 500 dacha owners located nearby, and to ensure construction impacts, such as dust and traffic are managed properly.

The project will meet Russian environmental, health and safety laws and regulations and EU environmental standards (including IPPC, BAT) and relevant national employment laws. The project includes measures for prevention of accidents, development and implementation of action plans for emergency situations; ecological monitoring and environmental industrial control for all phases of the Project. It also comprises introduction of a management system at the plant in line with the ISO 14000 series and OHSAS 18000 series and provision for public participation. Measures to reduce potential impacts to the local community include a Transport Management Plan (for materials and workers), an accommodation plan and a code of conduct for construction workers and a grievance procedure. The project has also committed to local recruitment where possible and to support social investment projects.

Annual environmental, health and safety and social reports will be provided to EBRD, and annual reporting to the public has also been agreed. The company will communicate regularly with nearby dacha owners, and will maintain a grievance procedure for handling concerns. Bank environmental/social staff will make periodic trips to review progress on the commitments.

There is an Environmental and Social Impact Assessment available for this project.

Technical Cooperation

None.

Company Contact

General enquiries:

Mr. Nikolay Olenichenko
Administrative Director
RusVinyl LLC
63, Osharskaya Street,
603105 Nizhny Novgorod
Russia
Phone: +7 831 278 36 10
e-mail: nikolay.olenichenko@solvay.com

Ms. Svetlana Petrun
PR Manager
RusVinyl LLC
63, Osharskaya Street,
603105 Nizhny Novgorod
Russia
Phone: +7 831 278 36 10
e-mail: PetrunSS@sibur-nn.ru

Business opportunities

For business opportunities or procurement, contact the client company.

For state-sector projects, visit EBRD Procurement: Tel: +44 20 7338 6794
Email: procurement@ebrd.com

General enquiries

EBRD project enquiries not related to procurement:
Tel: +44 20 7338 7168
Email: projectenquiries@ebrd.com

Public Information Policy (PIP)

The PIP sets out how the EBRD discloses information and consults with its stakeholders so as to promote better awareness and understanding of its strategies, policies and operations. Please visit the Public Information Policy page below to find out how to request a Public Sector Board Report.
Text of the PIP

Project Complaint Mechanism (PCM)

The Project Complaint Mechanism (PCM) is the EBRD's accountability mechanism. It provides an opportunity for an independent review of complaints from individuals and organisations concerning EBRD-financed projects which are alleged to have caused, or are likely to cause, environmental and/or social harm.

Please visit the Project Complaint Mechanism page to find information about how to submit a complaint. The PCM Officer (pcm@ebrd.com) is available to answer any questions you may have regarding the submission of a complaint and criteria for registration and eligibility, in accordance with the PCM Rules of Procedure.