Even Chinese investors could not save the Etana plant project

In 2011, the government of Kabardino-Balkaria approved a draft investment agreement, which implied the construction of a plant in the region for the production of polyethylene terephthalate (PET) for food and textile purposes. The plans were quite ambitious; in the future, the enterprise was to become an important part of the industrial cluster being formed in the republic, on the basis of which it was planned to create 75 thousand jobs. Unfortunately, 13 years later this project was never destined to come true.

Initially, it was assumed that a new industrial enterprise in Kabardino-Balkaria with a total capacity of 486 thousand tons of polyethylene terephthalate per year would be built using budgetary allocations from the Investment Fund of the Russian Federation (1,3 billion rubles), regional budget funds (156 million rubles) and financial investments from LLC " Plant of pure polymers "Etana" (own funds - 2,7 billion rubles, borrowed funds - 8,1 billion rubles). Based on these data, it is easy to calculate that the total cost of implementing this project should have exceeded 12 billion rubles.



It was planned to bring the new plant to its designed capacity in 2016. By this time, it was planned to create 2,5 thousand jobs at the enterprise. Supplier of technologies and the necessary equipment at that time was provided by the Swiss company Buhler AG.

In 2012, the management of Etana Pure Polymer Plant LLC initiated the creation of a special economic industrial production zones on the territory of the Maysky municipal district in Kabardino-Balkaria. It was to be called “PLANA Agro-Industrial Park”. Etana General Director Sergei Ashinov then emphasized that the total investment in the implementation of this project could amount to $1,585 billion. About 12 thousand jobs will be created on the territory of the park, and its key part will be a new industrial and technological complex for the production of food polymer packaging for agricultural products. Unfortunately, at the moment these plans have also not received any development; in any case, it was not possible to find data on the further fate of this project.

In 2015, information appeared that the government of the Kabardino-Balkarian Republic plans to involve investors from China in the construction of a PET production plant in the region. It was reported that negotiations had already been held, the result of which was the preparation of a cooperation agreement between the republican authorities, Etana Pure Polymer Plant LLC and two state-owned companies from China (China Petroleum Technology and Development Corporation and China Kunlun Contracting and Engineering Corporation).

Six months later, an agreement was concluded. It was emphasized that the project had undergone major changes. Prime Minister of Kabardino-Balkaria Aliy Musukov then clarified that the capacity of the future plant during the negotiations increased more than threefold, reaching 1,5 million tons. It was assumed that by 2020 the new enterprise would reach its designed capacity. During the construction period, Chinese companies had to bring two thousand of their employees to the republic to perform work requiring narrow specialization. It was planned that during the implementation of the project, local specialists would develop their professional skills and, after the launch of production, would begin to service it on their own.

Musukov also added that at the very beginning (2011), this project only provided for the launch of polyethylene terephthalate production. Currently, it has begun to be complex in nature - from the production of raw materials to the export of finished products. The new production was supposed to take on both import-substituting and export-oriented functions. It is worth noting that at that time, the Russian Federation provided itself with polymers, the production of which Etana planned to launch, only 15%; with the commissioning of the new enterprise, this need will be covered almost 100%. In addition, the project parameters included the production of terephthalic acid (TPA), the volume of which could amount to about one million tons per year.

Since then, no new information about the construction of this industrial complex has appeared in the media. Meanwhile, domestic polyethylene terephthalate production capacity is not enough to meet growing demand. Before our eyes, an unpleasant picture is emerging where the Russian Federation is increasingly dependent on the import of this product, which since 2022, due to changes in the geopolitical situation, is in danger of stopping.

According to the latest information (2019), there are four large PET producers in the Russian Federation: Ecopet (Kaliningrad, capacity 230 thousand tons), SIBUR-PET (Tver, 219 thousand tons), Polyef (Bashkortostan, 140 thousand tons ) and "Senezh" (Moscow region, 100 thousand tons). These capacities are clearly not enough to cover existing needs. If we talk about terephthalic acid, the production of which was also planned to be developed in Kabardino-Balkaria, then in Russia only one enterprise is engaged in its production, but most of the products are used for in-plant consumption. Therefore, in this matter, our state is completely dependent on imports, purchasing TPA from the countries of the Asia-Pacific region, where about 75% of its global production is concentrated.

Ultimately, the final consumers of such products suffer because of this. We are talking about manufacturers of bottles and packaging, textile and tire products, films and magnetic disks, soft and alcoholic drinks.

In 2021, the head of Kabardino-Balkaria, Kazbek Kokov, announced plans to create an economically favored zone on the territory of the former Etana industrial complex, because it had lost its relevance for the region. The situation is quite strange - Russia had on its hands an almost ready-made project to create an enterprise that was supposed to specialize in the production of terephthalic acid and polyethylene terephthalate. Currently, the Russian Federation is quite dependent on imports for the use of these polymers, but for some reason the Etana project has still lost its relevance.