Mikhail Sutyaginsky about AO GC Titan plans in Pskov region and the world without polymers

Please find hereby the text version of the “Hyde-park” program with the Chairman of the Board of Directors of AO GC Titan Mikhail Sutyaginsky aired on the Echo Moskvy radio in Pskov (102.6 FM).

Konstantin Kalinichenko: Good day dear audience. This is “Hyde-park”, the place where we openly talk about relevant topics and we are on air. Today our guest is the Chairman of the Board of Directors of AO GC Titan Mikhail Sutyaginsky. Mikhail Alexandrovich, good day!

Mikhail Sutyaginsky: Good day.

Konstantin Kalinichenko: Recently the Pskov corporation court confirmed the right of Titan-Polymer to construct its plant on the SEZ Moglino territory. In the next 30 minutes we will talk about what was the 2020 for the AO GC Titan enterprises and how the Corona-Crisis and restrictive measures affected the group of companies’ strategic projects implementation, as well as what the chemical industry and polymer chemistry are today, its production safety. People have a lot of fears. And they should be dispelled. Another important question is possibility of modern human life without these polymers. Mikhail Alexandrovich, we are happy to see you here today. Tell us please, what strategic projects are the AO GC Titan enterprises implementing today?

Mikhail Sutyaginsky: I want to greet our audience. I am glad, that the possibility to visit Pskov appeared again. Pskov is changing, becoming more attractive. Thank God, the greens are in full bloom, the city became more beautiful, so I have a good mood despite the news about Coronavirus bringing much trouble. Really, no one was ready for this reversal that brought this leap year. There were three large-scale projects in AO GC Titan plans - two of them were in Omsk and the largest one - in Pskov. It is Titan-Polymer.

I can say that, we started-up the phenol and acetone production plant in Omsk at the beginning of the year. It gives us the possibility to further implement our project. It is in final stage. This is an isopropyl production plant. We determined the following for ourselves: the isopropyl alcohol will become the main raw material for the washer fluid conversion from methanol to isopropyl, which will improve environmental-friendly qualities and save health of hundreds and millions of our citizens. But it happened that way the isopropyl alcohol became the main raw material for the antiseptics production in the Coronavirus conditions. It is isopropyl alcohol that helps us to stop the disease spread, to protect ourselves.

We were watching the situation and decided to construct five complexes in Federal Districts of the Russian Federation, where it will be possible not only to produce “glass cleaner” but also antiseptics, that allows us to solve problems got by the country at the time of the Coronavirus spread. It should be noted, that these challenges for all the Russian business became enough serious task. Markets and demand reduced due to self- isolation, and it affected the AO GC Titan development despite the group of companies was and remains in the status of systemic enterprise and in accordance with the declarations, signed by the Russian Federation government, we hope we will hold our positions.

First of all, we are talking about the markets where we were. We ship products to more than 40 countries of the world, and this imposes on us obligations, responsibility. But it did not affected, but on the contrary, made it possible to strengthen in the mind the idea of the need for an investment project, which we are implementing in Pskov region. About the BOPET-film question. If it was implemented, it would not give an opportunity to increase imports of products to Russia. We would fully cover demand of this products type. Moreover, today like never before we have a demand to increase the shelf life of all food products, vegetable raw materials that are processed. And BOPET-film is the main raw material for this.

Konstantin Kalinichenko: AO GC Titan is a large-scale business. A lot of people think that in the situation of Coronavirus crisis, the large-scale business can be patient. As I understand, it is completely wrong judgment, and the large business is hardly easier than others. What measures and programs of state support did you use and will use in new economic conditions?

Mikhail Sutyaginsky: You are absolutely right. Than more an enterprise larger, than more it loses. We had to stop all our production lines for the overhaul in May (as a rule, we stop them one-by-one during a year). We got so much products that there were 40 thousand tons of various commercial output only in our oil tank cars. We blocked all the access communications. We did not have place to accept raw materials and we did not have place to bring it because we did not have demand. For sure, it is the enterprise liquidity and several things, connected with the payment for raw materials. It is salaries. At the same time, we did not lay off a single employee.

Moreover, we hired 114 people more because of the opened new antiseptics production line. Our president gave us a mission to increase the personal protective equipment production and we took an active participation in it. We prepared ourselves for the isopropyl alcohol processing and did a lot in this area. We opened the line at three sites. Now we have received approval for financing against working capital, because we ran out of them back in April. Production accumulated, we had to use all this in this situation.

Today, as a systemic company, we have received approval from the Industrial Development Fund for another tranche against the bank guarantee. If this month the liquidity of our enterprise does not recover and there are no shipments, we will have to take a loan to pay salaries to employees. The terms provided are good enough. We can say it is a record interest rate. But it is still a loan, an obligation that we will have to fulfil.

Of course, we have a lot of experience in the previous crisis of 2008-2009, and 2016 had serious impact as well. We produce products of the 3^rd – 4^th conversion - waste products remaining after the “oil industry”. And it is directly linked to gasoline. Imagine, we were unloading up to 15 thousand tons of this product per month, and suddenly this all collapsed in a single day. It is impossible to stop in one day, it is the enterprise of uninterrupted cycle, but the staff coped with everything. Further on we had to reduce the volume of production smoothly and are engaged in a dialogue to get deferred payment for a number of products from vertically integrated companies. But in general, we still keep tensions in check.

Konstantin Kalinichenko: Now let’s talk about your project in Pskov region.

There have been recent publications that Titan-Polymer is considering the possibility of revising the construction of the second project stage. It was referred to PET pellets production. Please comment on, insofar as all this is true to fact.

Mikhail Sutyaginsky: Today amid pandemic, individual protective means turned out to be vitally important. If we had had that level and those raw materials, for example non-woven ones in sufficient quantities instead of begging with an outstretched hand before the West and East, I think we would have saved the lives of more than one thousand people who died. It is misfortune, disaster for families who have lost their loved ones and breadwinners. Moreover, the coronavirus is affecting not only the elderly population, but also young people.

In this situation, certainly we considered the possibilities and once again made sure of correctness of our proposal to the administration of Pskov region to build such a complex here. A PETF pellet plant is simply and solely needed. PETF non-woven materials have more advantages over polypropylene nonwovens. Both military and chemists have already confirmed by tests that PETF products do not lose their functionality even during thermal treatment and retain their protective properties even in the period of the hardest coronavirus. We believe that this plant is necessary not only for Pskov region. The whole country needs it. We import 100% of all non-woven material into the Russian Federation.

I would also add that the production Hazard Class when it is built, will be another – the III Hazard Class. And I can say that we are finishing testing materials in terms of their chemical properties and the presence of emissions. Tests are being conducted with all interested authorities - the Ministry of Health, Federal Service for Supervision of Natural Resource Usage, Federal State Agency for Health and Consumer Rights and institutes that conduct tests, including on mice. Today we are going through the fifth stage, which shows that the impact on the human body is minimal. This production could be attributed to the IV Hazard Class, but with the exception of a number of minor points, it basically responds to the III Hazard Class. It means that the sanitary protection zone of this complex will be no more than 300 meters.

Konstantin Kalinichenko: Is it necessary to explain to our audience, that these numbers – III and IV Hazard Class and other are Safety Classes? These production plants are maximum safe and have the lowest security, protective sanitary zones precisely because these enterprises, as it happens, are much safer than many food industries.

Mikhail Sutyaginsky: Absolutely right. I can say that paint and varnish, food enterprises, especially for the disposal of ingredients for food products, are much more dangerous than the products that we are going to produce. The advantage of this product is that it does not react with absolutely anything. It is the only polymer product that is the most inert. It is used today to make systems for blood transfusion and storage, for storing medicines. All this is made of polyethylene terephthalate. And what is the most important, we have the opportunity to expand cooperation among medium and small businesses, enterprises that are already making masks. Only the protection class will be higher.

Konstantin Kalinichenko: It is actually great, because one fine moment we faced a challenge, and our state is somehow straightening out, but it is clear that we were not ready for this. Is it possible today to say that polymers, polymer chemistry are more and more included in our daily life? Can we say that modern chemistry is a good, safe and inevitable business?

Mikhail Sutyaginsky: The first is inevitable. Safe or unsafe - there are several interpretations. Today, even what we constantly consume may not be safe. For example, if we eat twice as much at dinner, it will also not be good. If we eat something stale, this will also have not very good consequences for health. Chemistry has permeated into all spheres of society today, and we cannot exist today without it. I can say this with full responsibility. Everything that we have in our everyday life today is non-woven material or the fiber that is used to make clothes. The favorite material of women is polyester. It does not have any allergic effect on the skin and you feel comfortable in it. All this can be produced on the SEZ “Moglino” sites.

Konstantin Kalinichenko: It would be great. I should note that we are not campaigning here, but trying to explain, that modern chemistry is not a flue gas ductwork and not the rubber production, which causes completely outdated associations in people.

Mikhail Alexandrovich, let’s try to demystify one more thing. People in Internet actively discuss the «plastic rejection in Europe». In particular, they discuss such things as the plastic disposable tableware rejection. Many people concluded that plastics and polymers are a thing of the past. So, is there future for polymers?

Mikhail Sutyaginsky: I can say: there is even more of this future than we can imagine. Everyone is talking about disposable or biodegradable products. Yes, it is appropriate in some minimal ratio. But this is still a decay process. The biodegradable part releases some substances, and decomposition occurs. I believe that today recycling is more reasonable, which will allow the use of products in the future, in new directions.

I will stop at PETF. The AO GC Titan specialists are chemists with well-deserved titles. In the strategy, they identified PETF as the most promising plastic, which will gradually displace other plastics. We see that it can be recycled an infinite number of times. Let its use be one-time, but it can be immediately recycled, and the conversion of this product can be 100%. At the same time, cheaper products will be produced, more accessible for use. Even in the automotive industry, we can pretend to reduce the cost of finished products. PET is also used in aircraft and shipbuilding ... Therefore, I believe that in the Russian Federation the percentage will be multiplied in the direction of polymers. If we take disposable paper cups, their production process is ten times more harmful than PET production.

Konstantin Kalinichenko: That is, the pulp and paper process is more harmful than PETF.

Mikhail Sutyaginsky: Absolutely so. We are talking about Pskov, about the Titan-Polymer complex, and this can be stated directly and boldly.

Konstantin Kalinichenko: Mikhail Alexandrovich, there is a widespread opinion that plastic is completely non-degradable, non-recyclable material, and a bag from a supermarket is a terrible enemy of the environment. Is it possible to do something with polymers in terms of processing, disposal?

Mikhail Sutyaginsky: Today, many companies around the world thinking about the future are developing materials that are just biodegradable. Many even write on the bags - "biodegradable". You can even see that its structure is beginning to change. But it is a long process. I think that from the point of view of material, mastery for all of us, cultural utilization with separate collection of garbage, with separate analysis of polymers, which, in principle, can be recycled and disposed of, is more acceptable for all of us. And polypropylene is well processed in certain proportions, and polyethylene and polyamide. There are already technologies for this, they should be developed.

I think recycling is just right for small and medium businesses. At our site, we will soon prepare a whole case specifically for the recycling of products that can be disposed of in the Pskov region at the site in SEZ Moglino without any harm. The greatest harm in this situation is if the package is just lying around on the street. As the saying goes, waste must be turned into income. This will enable the business to feel independent and create new workplaces. But this is highly intellectual work. It is complicated work that requires good knowledge of the chemistry process. But with the emergence of such processes, both demand and supply will appear, which will make it possible to move on in science.

A scientific and technical center will be created on the basis of Titan-Polymer. Today we discuss a lot of proposals with Pskov State University, and recently, as a systemic company, we applied for state support, which will allow us to develop new technologies and new materials. We plan that Kabardino-Balkarian leading institute in the field of polymers will work here, at Pskov site, they have a lot of groundwork. This will provide an opportunity to create a department here, and student youth will be able to improve their knowledge in the field of recycling. A real cluster can be created here, despite the fact that the Hazard Class will not affect our health (this topic has already set the teeth on edge, but we have to talk about it).

Moreover, chemistry has endless possibilities in terms of improving technological processes. Enterprises should be helped so that they can work together to improve technological processes. Scientific developments that PskovSU can do, creating a scientific base at the laboratory level, will give a serious impetus for the relationship between existing enterprises and for the new technologies development because there will be a base from which to start.

Konstantin Kalinichenko: Mikhail Alexandrovich, at the end of the broadcast, my question is completely, perhaps, philistine. How, in your opinion, as an expert, the one of leaders in the chemical industry, would our world look like if there were no polymer chemistry? What would we be deprived of?

Mikhail Sutyaginsky: I would say so: all our walls would be made of adobe. This is clay and straw. The dishes would also be earthenware. Porcelain, thinner than clay, is also chemistry. And the glassware from which we drink and eat, too. We would have been stripped - undressed, we would have walked around in linen clothes. But not everyone wore such clothes - quite wealthy people could afford it. In our time, you cannot tell whether a person is rich or poor. Someone with less income may look better than someone with more opportunities. We certainly could not use cars or airplanes. So today the life and development of our civilization is not possible without chemistry.

Konstantin Kalinichenko: And there is the last question. Should a business, especially a large one, in modern conditions be socially responsible, voluntarily finance social programs, engage in charity work?

Mikhail Sutyaginsky: Definitely yes. Social and corporate responsibility should be a prerequisite for the activities of every enterprise. If the enterprise employs a team of many thousands, it cannot but take into account its interests and not be interested in how the employees live. It should be interested in training new personnel, in bringing them to a qualitatively new level.

The AO GC Titan works with an understanding of its social responsibility. In the Omsk region alone, 50 million rubles have been allocated for these purposes. In every region where we are present, including the Pskov region, we took part in a number of events where we provided support. Although our enterprise in the Pskov region is not yet functioning, we are talking about the fact that we are already here and are ready to share all the joys and hardships with the people of Pskov.

Konstantin Kalinichenko: On this optimistic note, our broadcast ends, although there are still many questions. Mikhail Alexandrovich, thank you for being with us today, goodbye.

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