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Melamine 2011: event report.

November 21, 2011

The interest of the Russian domestic companies to melamine production is substantial, the business has good perspectives and strategies of entry to the global market are already under evaluations.  

At the end of November 2011 the International Creon Conference “Melamine 2011” will take place in Moscow, Russia. Creon Conference devoted to melamine market is the sole international platform for the discussions of development of this important industry. During the last four years of Conference organization the melamine turned from second-ranked product for Russian market and little-known application into an important trading position being in the focus of many market players. The scales of melamine usage are expanding constantly; melamine resins decisively phase out phenol-based and epoxy resins. Now all of the market players are interested in what place Russia will take on the global melamine market and how soon it may happen. In the end of this year the melamine plant of Eurochem Company will be launched. However, some more players are seriously considering new plants and exports capacities of this product while in the meantime GrodnoAzot and TogliattyAzot already prepare their fields for equipment setup. It’s not clear yet whether Sibur enters the melamine race as it has one of the most technologically advanced urea production in the FSU.

Last year at Creon conference two international licensors, Borealis and Eurotechnika, have started to offer technologies of melamine production and initiated active negotiations with potential local investors. But the main question that involves everyone is whether Russia need more than 2-3 producers in case they look at demand of domestic market only? And if no, will the melamine be a new export product of Russian chemical industry? From one hand, cheap natural gas that is found in Russia assists lower melamine price but this product consumers are looking not only at price but the quality too. Potentially there could be three new melamine export centers in the world: Trinidad and Tobago (Helm), QAFCO and Russia. However major Chinese players like Jade Elephant have not made their claims yet as well as American H.I.G. Capital that consolidates melamine industry of US and is going to determine the strategy.

However, melamine production technologies is quite complex and its introduction requires great skills even from leading Western companies. Moreover, an independent global market entry of new players is complicated and the success of sales depends of chosen sales scheme. What forms of partnership between Russian investors of melamine projects and their foreign colleagues we may expect? Will Russian companies agree to work under off-take scheme or will they find ways to get closer to global traders or end-users? How many new competitors will emerge soon? For urea producers melamine manufacture will always be a side business, although quite profitable one sometimes, but this fact does not stop many companies, especially Asian players that are eager to invest in such projects. How confident will Russian companies feel in such environment?

There are many questions about the present market situation on the global melamine and urea market too. High prices for urea have already resulted in withdrawal of a number of international companies out of the processing urea into melamine as they see no financial sense in it. What long-term effects on the industry it may have and is the global melamine deficit possible as a result of investment projects’ inhibition? Anyway, the future of global melamine market is now in hands of European companies and the shape of the industry in coming years depends on their preferences. Leading world market players will gather at upcoming Creon Conference to answer all these questions.

The VI International Conference “Melamine 2011” is to be held on November, 21 at the Hotel Baltschug Kempinski Moscow. The event is a unique conference in Russia on this subject, and one of the key platforms for discussing issues related to production, trade and usage of melamine in the world. CREON invites all market players to take part in an active discussion of current issues melamine industry. More information and event program can be found on the phone.: 7 (495) 797-49-07 or e-mail: org@creonenergy.ru.


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