The Russian chemical industry looks set for a serious crisis, as the country’s flagship chemical producer, Khimprom, faces liquidation. The closure could have a knock-on effect on other Russian producers.
Rostec, a Russian state corporation (established to promote, develop, produce and export hi-tech industrial products for the civil and defense sectors) and the majority shareholder of Khimprom, says that the enterprise will completely cease its operations by March 2015 and will be liquidated by May 2016. Of the 5000 workers Khimprom currently employs, about 4000 will be laid off.
According to an official Rostec representative, the company was hampered by high energy prices; outdated technology; depreciation of equipment, which reached 95%; as well as unsuccessful competition with foreign rivals.
Rostec is working with the Russian government to solve the most pressing issues, in particular the fate of Khimprom’s workers. There are several options, including transferring some employees to other Rostec enterprises, but no final decision has yet been taken.
Analysts from the Russian Ministry of Industry and Trade believe that liquidating Khimprom, which currently produces a wide range of chemical products, may result in a serious crisis in the Russian chemical industry. The company remains the only Russian producer of calcium carbide, emulsion PVC, perchloroethylene and some other products, and its closure may lead to market shortages of some of these products.
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