Russia's ORGKHIM Biochemical Holding, a Nizhny Novgorod-based holding, announced it plans to build a USD 50 million facility in Singapore to manufacture petroleum-based extender oils used in tires, synthetic rubbers and rubber compounds.

The High-Level Russia-Singapore Inter-Governmental Commission held its fifth session in Singapore. Mr. Igor Shuvalov, the RF First Deputy Prime Minister, co-chaired the session with Mr. Tharman Shanmugaratnam, Minister for Finance of Singapore.

The parties discussed opportunities for cooperation between two countries in areas like trade and economy, industry, business, education and science. Mr. Shuvalov specifically underlined the importance of furthering Russian regional initiatives of cooperation with the Republic of Singapore.

A major international business and trade platform, Singapore is one of Russia’s strategic partners in Asia Pacific. Today Singapore holds a leading position in the international trade of petroleum products.

During the session, the RF Government officials made a request to the Singapore counterparts to endorse the investment project of ORGKHIM Biochemical Holding aimed at establishing a production facility in Singapore to manufacture safe petroleum-based extender oils used in tires, synthetic rubbers and rubber compounds. The corresponding entry was made in the Joint Statement of the Fifth Session.

ORGKHIM Biochemical Holding is a unique Russian and second worldwide producer of safe petroleum-based extender oils for “green” tires production around the world. Continental, Goodyear, Pirelli, Hankook and other big global tire makers have chosen ORGKHIM’s NORMAN low-PCA processing oil made in Russian town of Uren near Nizhny Novgorod area, Russia, and supplied to their production units in Europe, Africa and Asia.

The NORMAN oil is well-known around the world and is already supplied to a number of Asian tire producers. However, the launch of ORGKHIM’s production facility will help remarkably increase Russia’s presence in the Asian market.

ORGKHIM plans to locate its plant on Jurong Island, nearby an important petrochemical cluster with ready-made infrastructure available and a large shipping terminal, designed for import of raw materials and export of finished products. NORMAN oil “made in Singapore” will go straight to all countries within Asia-Pacific.

The start of production in Singapore is a national-scale investment project. According to Mr. Nikolay Khodov, Orgkhim CEO, the company from Nizhny Novgorod plans to spend around USD 50 million in the coming two years to set up a unit of 50,000 tons annual capacity (phase one).

"We claimed a land plot for construction in Singapore back in 2013. By the end of December 2014 we expect closing of negotiations, issue of all the necessary authorizations and permits, and we count on regional tax benefits as well. As a backup alternative, we consider Port of Tanjung Pelepas, a new Malaysian industrial cluster located only 40km away from the company’s office in Singapore. “We consider Asia-Pacific as a region of strategic importance; therefore we are determined to start construction in the shortest time”, commented Mr. Khodov.

The new production facility will use a proprietary technology, developed by the company’s R&D Center. A local affiliated R&D office will be opened at the new plant as well.

"We will create our local R&D cell together with the National University of Singapore. Its tasks will include development of new product solutions and research in the field of carcinogenic safety. Another task is feedstock and product quality control at all production stages”, explains Prof. Arkady Radbil, R&D Director at Orgkhim.

Noteworthy is the remark made by Mr. Yury Sentyurin, the RF Deputy Minister of Energy, saying that ORGKHIM project was one of the leading means to help expand Russian presence at the Asian energy market.

"We are talking about direct Russian investments in the Singapore economy. ORGKHIM is an innovative company, with proprietary know-how, holding around 20% of the global market share. The company’s future facility in Singapore is a remarkable investment and engineering project. Russia will then be present not only as a traditional energy supplier, but as investor and technology provider at the Asian market”, declared Mr. Sentyurin.

Besides the Asian project, the company intends to expand its operations into Europe and the USA. The production unit in Poland is scheduled to come on line in 2016 and that in the USA in 2017.

In 2013 ORGKHIM took the “Exporter of the Year” Nizhny Novgorod regional award. Over 70% of the company turnover is export sales, with a year-to-year volume increase. The customer base of ORGKHIM spans all over the world, from the USA to China.