Litasco Bulgaria

31/05/2004 (17:26)

Brief History

Lukoil Neftochim Bourgas AD is the largest refinery in the Balkan region with a capacity of 10.5 mil tons/year. It also houses a petrochemical complex. The Bourgas complex sits on the Black Sea, it is considered a strategic position between Europe and Asia with good access to markets like Turkey and Greece.

In 1999, Russia's Lukoil purchased a 58% stake in what was then Neftochim and the name was changed. At the time, Lukoil paid $101 mil in cash and planned to invest $408 mil on upgrading the refinery through 2005.

LITASCO BULGARIA, Litasco being an abbreviation of Lukoil International Trading And Supply Company, is the youngest member of the Lukoil family and hopes to be one of the most successful trading companies within the Lukoil group. It hopes to achieve that through excellent customer service for its growing list of clients.

In 2000, Lukoil announced it planned to invest $500 in petrochemicals over the next five years, including considering a major new ethylene complex. As part of the plan, the Bourgas site would see an increase in ethylene production plus an upgrade in production of petrochemicals and polymers. In 2001, it was reported that Russia's Lukoil was considering building a new LLDPE plant at the Bourgas site. A final decision was not made but was part of the company's deliberations for the future development of the site. An increase in PP production was also discussed at the time. Later in August 2001, it was reported that Lukoil Neftochim received a grant from the US Trade and Development Agency to support a feasibility study to modernize and upgrade the complex at Bourgas. The study was to look at the expansion of current production lines and the possible introduction of new products.

A source at the producer says that thus far, a final decision has not been made on the Master plan, although they expect investments in PP and probably LDPE. Also, possible is a new plant for PS, ABS, SAN.

History in Turkey

Lukoil Bulgaria has a long history in the Turkish market dating back to the early 1990's. The producer considers Turkey one of its major markets. Sales are made in some cases direct to end consumers, but the majority of trade is through third party resellers.

The biggest advantage for Turkish buyers is quick delivery, particularly to the Istanbul area. The producer also points out that its products are well known in the Turkish market and it boasts a large number of customers from Turkey.

Product Range

Lukoil Bulgaria has the following polymer production capacities:

80,000 tons/year PP
85,000 tons/year LDPE - film, blow molding, injection
25,000 tons/year PS - including GPPS, HIPS, and EPS

Lukoil Neftochim Bourgas products are certified by ISO 9001:2000.

In the year 2003, 32,500 tons of PP, 5,176 tons of LDPE, and 1,759 tons of PS were imported into Turkey from Bulgaria, according to the State Institute of Turkey.

ChemOrbis/Internet Strategy

Lukoil Bulgaria uses the internet extensively as an information gathering tool, to keep up with market developments, for competitive research, and for sourcing. The company has its own marketing website for introducing itself. A company source says they believe they will use the internet even more in the future.

Lukoil Bulgaria as a member of ChemOrbis keeps on top of market information through the content services. It believes the electronic trading idea is perfect, but they have so far been squeezed by capacity limitations as compared to their customer demand. They do hope to use the electronic trading platforms on ChemOrbis in the near future.

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