ChemChina and EuroChem Will Jointly Produce Propylene Oxides and Isocyanates at Russian Facility

Jun 28th, 2017

EuroChem Group AG, a leading producer of mineral fertilisers in the globe has signed a memorandum with ChemChina, the major chemical company in China. The memorandum declares the idea of partnership and the creation of joint production of industrial products in Russia. The initiative got the name PROJECT. The parties agreed to form a technical advisory group to estimate the technical feasibility of the PROJECT and perform a finance and law expert examination.

Both companies are studying the possibility to produce such industrial materials as isocyanates (MDI and TDI) and propylene oxides (polyols and propylene glycol). Propylene oxides are widely applied in various industrial sectors including the production of surface-active reagents, different types of polyurethane and synthetic lubricants. Isocyanates find their application in the construction industry, i.e. in the manufacture of thermal insulation materials.

The Russian Federation and CIS import these products from Benelux countries, the U.S., Germany and Japan. This joint production will be the first facility built on the territory of the RF and CIS. As a result, these countries will receive a full range of products the demand for which is constantly rising especially in Russia. Therefore, it will become a major market outlet for isocyanates and propylene oxides.

Dmitri Strezhnev, a EuroChem CEO, expresses his best expectations towards the partnership with ChemChina. It will enable to expand the local industrial capacity, produce new products and eliminate the import dependency on isocyanates and propylene oxides. PROJECT will be implemented at EuroChem facility NOVOMOSKOVSKIJ AZOT in Tula administrative region the infrastructure of which will be optimised and integrated with the help of ChemChina’s advanced technologies. Moreover, it has necessary sites for the utilisation of after-products.

PROJECT will contribute to favourable investment climate development in the region. The memorandum was signed during St. Petersburg International Economic Forum (SPIEF). PROJECT is initially estimated at $ 500 million and can draw the investments from other regions of Russia and China.