Tag Archives: industrials

Azerbaijan cancels $16.5b petrochemical project

FEB. 19 2016 (The Conway Bulletin) — Azerbaijan’s state-owned energy company SOCAR said it had halted a multi-billion dollar project to develop the OGPC petrochemical complex at Sangachal, 40km south of Baku, because of sustained low oil prices, dealing a major blow to the country’s economic outlook.

SOCAR’s vice president Tofig Gahramanov said the company had stopped construction on the complex that was once valued at $16.5b and feted as the project that would transform Azerbaijan into the region’s biggest producer of refined products.

“We can say that active work on the OGPC project has been temporarily frozen,” Mr Gahramanov told Reuters in an interview.

Last month, in Kazakhstan, South Korea’s LG Chem cancelled a $4.2b project to build a petrochemical plant on the Caspian Sea coast.

Initially, the OGPC project near Baku, included an oil refinery which was later dropped, bringing the cost of construction down to $7b.

Japan’s Mitsui signed a preliminary memorandum to take part in the project last year. Last year, the Britain-based unit of US’ Fluor Group was selected as the lead contractor on the project. Fluor UK declined to comment when contacted by The Conway Bulletin.

The economic downturn has hit Azerbaijan hard. The manat currency has lost around 50% of its value and, with oil prices still low, the project was simply too costly for the state budget.

And the impact of SOCAR’s decision to freeze, or scrap, plans to build the petrochemical complex will be felt far and wide.

This was one of the biggest projects in the region and dozens of Western companies will have been lined up to work on it.

ENDS

(News report from Issue No. 269, published on Feb. 26 2016)

LG pulls out of $4.2b project in Kazakhstan as crisis deepens

ALMATY, JAN. 26 2016 (The Conway Bulletin) — South Korean industrial group LG Chem dropped its plan to build a $4.2b petrochemical complex in Kazakhstan, a major dent to the county’s economic outlook and perhaps the biggest project cancellation during this sustained period of low oil prices.

Under the project plans, drawn up in 2011, LG would have built two plants, to produce ethylene and polyethylene, near the town of Atyrau on the Caspian Sea shore.

“The Kazakhstan project lost its lustre because of a steep increase in facility investment amid growing uncertainty. On a business front, LG’s top management reached a consensus that it wasn’t promising,” the company said in a statement.

LG didn’t directly reference low oil prices, now at around a third of their level of 18 months ago, but the collapse would have made the plant far less profitable.

LG’s partners in Kazakhstan were state-owned United Chemical Company and privately-run SAT & Co, each holding a 25% stake in the Atyrau petrochemical project. Kenes Rakishev, son-in-law of defence minister Imangali Tasmagambetov, owns 75.6% of SAT.

LG Group controls various projects across Kazakhstan, Uzbekistan and Turkmenistan.

Low oil prices and recession in Russia have hit Central Asia hard, triggering project cancellations.

This also included an exploration project run by Petrovietnam, Vietnam’s state-owned energy company, which had been looking for hydrocarbon reserves in the Ustyurt region of Uzbekistan.

ENDS

(News report from Issue No. 265, published on Jan. 29 2016)

Henkel constructs first factory in Georgia

NOV. 10 2015 (The Conway Bulletin) — German industrial company Henkel started construction work at its first factory in Georgia. The new €6m ($6.5m) plant will open in 2016 and produce adhesive materials, one of Henkel’s core businesses. In the medium-term, Henkel plans to export its production to Armenia and Azerbaijan.

ENDS

(News report from Issue No. 256, published on Nov. 13 2015)

Tajik aluminium exports rise

JULY 14 2015 (The Conway Bulletin) – TALCO, the aluminium smelter in Tajikistan, exported 3.6% more aluminium in the first half of 2015 compared to the same period in 2014, the statistics agency said. TALCO is one of the biggest aluminium smelters in the world and generates around 70% of Tajikistan’s foreign currency earnings.

ENDS

(News report from Issue No. 240, published on July 16 2015)

FDI in Georgia halves in first 3 months of 2015

JUNE 9 2015 (The Conway Bulletin) – Foreign direct investment (FDI), so important to Georgia’s economy, halved in the first three months of this year compared to the last quarter of 2014, GeoStat, the Georgian statistics agency, said.

GeoStat measured total FDI in Georgia at $175m, down from $349m in Q4 2014. Georgia’s attractiveness as a foreign investment destination was rebounding after the global economic crisis of 2008/9 and a war against Russia in 2008, so the data will disappoint.

Apart from the second quarter of 2014, this was the weakest FDI data for Georgia since 2009. The biggest drop was in construction and manufacturing, reflecting the recession which has hit the region, triggered by a struggling Russian economy.

ENDS

(News report from Issue No. 235, published on June 11 2015)

Kazagy issues profit warning

MARCH 17 2015 (The Bulletin) – London-listed Kazakh packaging company Kazgazy issued a profit warning and said sales in Q1 were down 18% on Q1 2014. Kazagy blamed the fall in the value of the Russian rouble and said it will be forced to cut jobs and implement other cost savings.
ENDS

(News report from Issue No. 223, published on March 18 2015)

Mitsubishi wins large tender in Uzbekistan

MARCH 7 2015 (The Bulletin) – Mitsubishi Heavy Industries, a Japanese company, has won a tender to build a chemical complex in central Uzbekistan, media reported quoting the Uzbek government press service. Reports said that the complex, which will produce ammonia, will cost around $1b to build. Ammonia is used in fertiliser.
ENDS

(News report from Issue No. 222, published on March 11 2015)

Tajik aluminium production falls

MAY 13 2014 (The Conway Bulletin) – TALCO, the aluminium plant that is at the centre of Tajikistan’s economy, cut production by 39.5% between January and March, media reported quoting the economy and trade ministry. TALCO had predicted a fall in aluminium production in February. It blamed the fall on a global crash in aluminium prices.

ENDS

(News report from Issue No. 184, published on May 14 2014)

Armenia builds new tyre plant

FEB. 11 2014 (The Conway Bulletin) — Russian energy company Rosneft and Italian tyre manufacturer Pirelli are considering building a rubber plant in Armenia, media reported. The plant would be a boost for Armenian industry and would also underscore the close relationship between Russia and Armenia. Armenia is joining the Russia-led Customs Union this year.

(News report from Issue No. 171, published on Feb. 12 2014)

Uzbek company infringes copyright

JAN. 29 2014 (The Conway Bulletin) — A court in Tashkent ruled that an Uzbek company had broken copyright rules by using branding registered to the Nivea skin-care products, local media reported. German company Beiersdorf owns the Nivea brand. Protecting intellectual property is a challenge for Western companies working in Central Asia.

(News report from Issue No. 170, published on Feb. 5 2014)