About NIKOCHEM Group

NIKOCHEM Group is one of the leaders of the Russian chemical industry which holds the first place in Russia for manufacture of liquid and solid caustic soda, chlorinated paraffins, synthetic hydrochloric acid and commercial grade chlorine, and the third place for manufacture of PVC and sodium hypochlorite. Main production assets of the Company are located in the industrial site of Volgograd at the premises of JSC KAUSTIK, the largest plant of the Group. Other manufacturing facilities or companies owned by the Group include JSC NIKOMAG (magnesium-based products), ZIRAX LLC (high purity reagents for various industries), Nikopharm LLC (highly effective pharmaceutical dosage forms, substances, biologically active additives and halobacterium-based cosmetics), and CJSC SOLIGRAN (flexible and rigid PVC compounds).

NIKOCHEM sets its focus on the improvement of Volgograd industrial site where the main production facilities of the Group are currently located. The key development line is to create a multi-purpose chemical science park on its territory. The core idea is that various new production facilities (including those based on innovative technologies) are to be located in close physical proximity, and they can use products made by each of these facilities as a raw material for their processes and keep the maintenance costs down for the existing infrastructure due to shared operation. A unique raw material base is at the Company’s disposal. This includes raw material resources (deposits of bischofite and mineral salt) and a wide range of products such as caustic soda, chlorine, chlororganic products, vinyl-based polymers, etc. The Company is well secured with the guaranteed power and water supply, and the resources are cheaper than in Europe.

The Volgograd industrial site of NIKOCHEM Group has a well-developed infrastructure: multiple production buildings that are currently idle, two independent sources of power supply, water treatment plant, high pressure and low pressure steam from the Heat Power Station-3, which is currently leased by the Group, refrigeration source of various parameters coming from five refrigerators and state-of-the art biological treatment plants. There are also powerful environment protection facilities: treatment plants, waste gas cleaning plant.

To implement the chemical science park concept, the Company has been negotiating with the world leading manufacturers of chemical products wishing to territorially expand their interests in the Russian market. Furthermore, the Company has conducted talks with the shareholders of JSC UGTK-8 in order to form its own source of power supply for the chemical science park, and for the first time ever the decision was made to give the Heat Power Station under lease of the chemical plant: on August 1, 2007 the Board of Directors of JSC UGTK-8 approved signing of the lease agreement with JSC KAUSTIK. By doing so, chlorine manufacturing facility will be supplied with power and heat at a prime cost and besides termination of the simple partnership agreement will increase the transparency of JSC KAUSTIK financial reports.

In 2007 NIKOCHEM Group started to implement the financial reporting system in accordance with the international standards. Such transition process takes place in all the facilities of NIKOCHEM Group. To achieve the above set target the Group invites the external consultants from Ernst & Young who have large experience in this sphere. The employees are trained on how to work with the international financial reporting standards so that the facilities can prepare the future financial reports on their own as required by the international accounting standards.

The Company explores the most important perspectives regarding production and investment activities.
The following trends of the innovation policy are in the Group’s priority list:

  • Deep processing of bischofite into new marketable and high purity products;
  • Complex processing of chlorine and increase of PVC production capacities;
  • Upgrade of mercury- and diaphragm-cell electrolysis equipment to reduce power and operating costs;
  • Solving environmental issues at the industrial site: study of different options regarding disposal and processing of production wastes.