Interview: Orgkhim in expansion mode

London - Russian company Orgkhim Biochemical Holdings is moving to expand its global market position. This, it said, is in-line with increasing demand for rubber chemicals that meet tightening health & safety and environmental regulations around the world.

The Nizhny Novgorod, Russia-based supplier of rubber processing oil and other chemicals to the synthetic rubber industry currently operates three production facility in Russia.

A first overseas production facility is currently under construction in Malaysia – a 50-kilotonnes per annum (ktpa) unit for the production of the company’s TDAE (treated distillate aromatic extract), MES (aminophenolic stabiliser), TRAE (treated residual aromatic extract) and NLP (non-labeling plasticises) products.

The Malaysian facility is due on-stream in mid-2017, said Ilya Zakharov, Orgkhim’s head of marketing. It will supply markets in the Asia Pacific region with a particular focus on China as well as other established markets including Malaysia and Singapore.

The company is expecting rapid take-up of products from the new facility, Zakharov saying: “We hope that our plant will work at 100-percent capacity from start-up. No doubt we will have enough demand for the unit to work at full capacity.”

“We see that the Asian market is growing. It shows, not huge, but stable growth and that is why we are going to focus on it,” he added. “Currently we supply to the Asia region from Russia. We will switch [supply] from one production unit to another. So those customers who now receive product from Russia will receive it from Malaysia.”

Asked about impact of US tariffs on tire markets in China, the Orgkhim official said, “frankly we don’t think this will be a problem for us. Demand is huge and we will find our share [of the market] there.”

Zakharov believes that Orgkhim can gain competitive advantage from its own-developed production technology, which “is at least 30 percent more effective than our competitors’.

The company’s main feedstock is aromatic extracts from Russian oil companies, but has entered agreements to source feedstock for the Malaysian plant from suppliers in Asia.

Zakharov went on to reveal that Orgkhim is considering construction of a production unit in North America, though the plans were still at the discussion stage. The company, he said, had received offers with “attractive conditions” for three locations.

“We will, anyway, increase our market share in North America and Latin America. But a decision on the way we do that – by delivery or making our own product – in that region will be made, I suppose, next year,” he said.

If the project does go ahead, it will produce Orgkhim’s “safe petroleum-based extender oils for rubbers and rubber compounds – TDAE, MES, TRAE and NLP – for the Americas region,” said Zakharov.

Orgkhim, he continued, sees particular potential demand for its Norman brand rubber processing oil from tire manufacturers in North America amid trends to supply more standardised products for the global tire market.

“North America is traditionally a naphthenics market,” said Zakharov. “The products we produce give excellent tire performance that can be a foundation for us to supply tire companies in America, making global specifications for their products. Using one oil can make the tire specification the same globally.”

Orgkhim currently operates three production facilities in Russia: at its Uren plant in Nizhny Novgorod oblast, it makes three types of Norman-branded process oils used in the production of tires, rubber and rubber compounds. In Voronezh oblast it has antioxidants and emulsifiers plant with a capacity of around 4,000 tonnes/year (t/y). In Lesosibirsk, Krasnoyarsk oblast, it operates a 10,000 t/y plant for the production of pine oil, terpineol, terpene hydrocarbons, rosin esters, as well as pelletised rosin and pre-emulsifier products.

Orgkhim’s flagship products include its Norman brand non-carcinogenic extender oil for the tire and rubber goods manufacturing industries that meet EU regulations on polycyclic aromatic hydrocarbons (PAHs). The portfolio includes TDAE for SSBR tread rubber used in OE car tires and TRAE for ESBR thread rubber for replacement car ties and truck tires and NLP plasticisers for low-end tires.