According to the Russian Union of Plastic Processors — a public association for producers of finished plastic products — 95 percent of the industry's equipment is imported, much from Western countries. Analysts believe the suspension of imports may lead to catastrophic effects in the industry.
One way to deal with the shortage of both equipment and finished products could be to increase supplies from so-called "friendly" states, such as China. However, due to complex logistics and longer distances, this is expensive.
Pyotr Bazunov, general director of RUPP, in an interview with the Russian Plastinfo paper, called on the state "to simplify logistics with China." That could be in the form subsidies or other support. But with the current situation in the Russian economy deteriorating, the ability of the state to allocate funds for these needs is under a serious question.
Other potential suppliers for the Russian plastics could be India and some Middle East and Asian states. But local analysts have serious doubts about the ability of these suppliers to completely replace European and North American companies.
Most Russian plastic processors put big hopes on the expansion of state support in the coming months. According to a survey conducted by Plastinfo, at least 20 percent of companies reported a significant reduction in their annual sales as well as difficulties in replacing imported raw materials that were previously supplied from Western countries.
At the same time, the recent strengthening of the ruble has also put an additional pressure on the industry.
To stabilize the market, representatives of processors have called on the government to introduce state regulation of prices for petrochemical raw materials such as naphtha and ethylene so that they are set in rubles instead of dollars and to allow trading in polymers on the stock exchange.
As the current situation in the industry remains complex, many Russian plastic processors and producers are considering further cost reductions. They are also switching to producing simpler, cheaper solutions and products.
Taking into account that the purchasing power of Russians has significantly declined after the start of the war, that had a negative effect on the level of demand for plastics in the local market. According to data of the Russian analyst agency Romir, the demand for plastic products in Russia has declined by 10-40 percent, depending on the product, compared with 2021.
Russia's largest materials supplier, Sibur, agrees.
"There is currently a decline in demand that varies across the industry," a Sibur executive said in an exclusive interview. "Thus, in the packaging segment, the decline in demand is about 5-10 percent. ... At the same time, in the transport sector, the decline in demand reached 50 percent."
Inflation has also significantly increased the price of plastic products in Russia. RUPP said prices are rising for both raw materials and plastic products sold to consumers.
The government hopes more active development of domestic production will reduce dependence on imports. For example, Russian medical device maker Samara recently launched the production of disposable gloves, made from Russian latex.
In the meantime, Russia polymer producers are trying to meet demand for products that were previously imported. The need became more urgent after the adoption of an eighth package of sanctions by the European Union on Russia, which imposed a ban on imports of most polymers and finished products from the European Union.
Despite the tough economic environment, Sibur has been able to launch a number of new investment projects in the Russia.
"Among the most important projects this year became the launch of production of PET pellets with the use of secondary raw materials," the Sibur spokesman said. "That became a key project for the company, which allowed to rationally use resources and introduce the principles of a circular economy."
Sibur's new Vivilen PET is produced at its Polief plant in Bashkortostan and contains up to 30 percent recycled content.
At full capacity, the plant will be capable of suppling 144,000 metric tons of Vivilen PET annually, which would include the equivalent of 1.7 billion used plastic bottles.
Sibur and other leading Russian analysts project that the current level of demand for Russian polymers is generally high: 700,000-800,000 tonnes per year, about 300,000 tonnes of which are polyethylene and polypropylene — polymers currently produced domestically.
Sibur is also opening new production with the aim of replacing imported materials. The company's data shows that for polyolefins alone, it is estimated at more than 400,000 tonnes per year. This year the company launched nine new polymer grades, mostly for packaging, including caps and closures, containers, hot lamination solutions and industrial packaging. The total potential for these products, according to initial estimates, is about 50,000 tonnes per year.
At present, the overall capacities for the production of base polymers in Russia are estimated at 8.3 million tonnes, while the volume of processing is 5 million tonnes, of which about 25 percent account for imported products.
Solvay, which has one commercial office in Russia, told Plastics News that it suspended direct operations there and had suspended dividend payments from Rusvinyl, a 50-50 joint venture.
A spokesman said the company was "horrified by the invasion and the ongoing war. Our first thoughts were with our people. The Solvay Solidarity Fund has given 1 million euros to support the victims of this horrific war, and we have supported our employees and given them the necessary support."
Solvay's sales in Russia are well below 1 percent of total sales.
Eugene Gerden is a freelance journalist who has covered Russia's chemicals, plastics and industrial sectors.