RUSNANO is taking an equity interest in the company to be established for an investment project that will produce nanostructured magnesium hydroxide with modified surface. The corporation will also provide credit financing to the project company. This decision was made recently by the Supervisory Council of RUSNANO.
The project’s goal is to organize production of a flame retardant (fireproofing additive)—nanostructured magnesium hydroxide with modified surface—and value added products of bromide and magnesium chloride. The budget for the project is about $104 million (3.1 billion rubles). RUSNANO will contribute $5.5 million (167 million rubles) to owners’ equity of the project company and provide up to $27 million (1.11 billion rubles) in credit.
The project will design and construct an environmentally safe, economically effective plant for production of nanostructured magnesium hydroxide. The plant will have capacity to produce 25,000 tons of the chemical per year. The plant will work in production facilities belonging to Kaustik, a NIKOCHEM Group company, in the city of Volgograd. The scientific-production center of Kaustik developed the technology that the new plant will use. As part of the project, an EPC contract will be concluded with Andritz AG (Austria), one of the world’s largest engineering companies. Project realization will begin in the first quarter of 2010. Pilot production of magnesium hydroxide is scheduled to start in the third quarter of 2011. Full-scale production will begin in 2013. Customers for the plant’s output will be both Russian and foreign companies.
“According to official statistics from the Ministry of the Russian Federation for Civil Defense, Emergencies and Elimination of Consequences of Natural Disasters, during 2008 there were approximately 200,000 fire in which more than 15,000 people lost their lives. Fires cause $405 million (12 billion rubles) in damages and losses annually.
Therefore, it is a priority to reduce the flammability of articles and lower the smoke and poisonous gases of burning polymers that are used in construction, electronics, and many other sectors. Flame retardants will lower the death toll: during a fire, as most deaths are caused by poisoning from toxic combustion. At present Russia lacks it own production of flame retardants. The entire amount of aluminum trihydrate and magnesium hydroxide consumed each year, 5,000–6,000 tons, is imported.
The volume of flame retardants consumed in the country is growing at a rate of 10 percent to 20 percent per year,” said Managing Director and Member of the Executive Board of RUSNANO Dionis Gordin. “Realization of the project will ensure that Russian producers of polymer compounds can obtain high-quality raw materials—nanostructured magnesium hydroxide. Part of the output will be sold as exports. Stricter norms from the European Commission on discharge of hydrogen chloride from wires and cables are going to promote the use of flame retardants based on magnesium hydroxide.”
In 2008 the Russian market in flame retardants was 9.900 tons. Over the last three years the domestic flame-retardants market has displayed steady growth of 11 percent to 13 percent annually. Federal Law №FЗ-123, dated July 22, 2008, on ensuring fire safety and new GOST certification for construction work and the manufacturing of cable stiffen requirements for fireproof and nontoxic products. The law and regulations will stimulate growth in this market. Russia’s flame-retardants market is currently almost 75 percent dependent on imported goods. Many forms of flame-retardants are not produced in the country: bromine-based flame retardants, high-quality aluminum trihydrate, magnesium hydroxide, and several phosphorated flame retardants.
The global market for flame retardants is expanding. In 2008 there were 1.15 million tons sold, and analysts expect sales in 2009, despite the economic turndown, to be at a similar level. They forecast that growth will begin in 2010 and that by 2015 the world’s market for flame retardants will reach 1.55 million tons. The European Union and the United States are the primary producers and consumers of flame-retardants. They make up 50 percent of the market.
Kaustik is one of the largest industrial enterprises in Russia. The company holds the leading position in the chemicals sector in output of synthetic hydrochloric acid, marketable chlorine, and liquid and solid caustic soda. Kaustik possesses a number of advantages that have enabled the company to carry out a time-phase diversification of its product line—proximity to mine salt and bischofite fields, a broad range of processed raw material with which to make more highly refined products, a location with excellent access to basic transportation hubs and sales markets, significant potential for innovation, a proprietary scientific-production center, and long-standing relationships with the country’s research and development institutes. For more information about Kaustik, please see the company website:www.kaustik.ru.
