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Ukraine: Lukor JSC to streamline its manufacturing

Lukor JSC, one of key players at the Ukrainian market of oil products, plans to streamline its manufacturing in three basic areas:  C4/C5 fractions hydrogenation, chlorine and PVC  production, said Sergey Chmykhalov,  Director of the Executive Board recently at the interview to Anatoliy Getmanchuk.
Lukor JSC  produces PE, vinylchloride,   benzene, propylene, pyrolysis resins, but as Sergey  Chmykhalov  noticed, the business is not  efficient at all because of  comparatively low prices  on the manufactured chemicals, while energy costs keep on rising and out-of-date technology&machinery are energy consuming.


The company sees a solution in technology investments, reducing  production costs  as well as  making expensive specialty chemicals. Thus, Lukor JSC plans to substitute vinylchloride production by  that of PVC which would bring USD100 more for each tonne. By settling chlorine production, the company will reduce its cost value by 50%, (compare,  chlorine cost value  makes USD200 a tonne  for the company, while  in Romania, for example,  its price is twice cheaper.)
The unit on C4/C5 fractions hydrogenation has already been commissioned. The project cost of chloride and PVC production  is about USD300m, an approximate period  of its its implementation is 2006-2008, added  Mr Chmykhalov.


Besides, the company is going to increase polyethylene production , as the functioning  line with capacity of 100,000 tonnes a year is the smallest one in Europe. As a result, Lukor JSC has started co-operating with a project designing institute and a production line manufacturer. As for polypropylene production, it is another point of  the streamline project, for it is more beneficial  to process  propylene than to sell up to 10,000 tonnes of it to Poland and Germany each year.


To sum it up, the ultimate purpose of Lukor JSC is to process chemicals to the maximum instead of exporting them. The company wants to change the situation  when all its products are exported abroad, and only 25% of polyethylene is processed within Ukraine, as for benzene, there is but one Ukrainian company that buys it. On the other hand,  Lukor JSC  following the growing demand for PVC at the Ukrainian market ( the forecast  PVC consumption here will make 120,000 tonnes a year  by 2009 contrasted to imported 60,000 tonnes of PVC this year ) intends to process vinylchloride into PVC with an output of 300,000 tonnes a year in  the nearest future.


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