to the Annual General Meeting of Shareholders
on the results of the Company's activities in 2017
THE PETROCHEMICAL COMPLEX OF THE COMPANY INCLUDES ENTERPRISES:
|LLC Managing Company Tatneft-Neftekhim||Provision of services for the management of enterprises of the petrochemical complex.|
|PJSC Nizhnekamskshina||Manufacture of tires, rubber products, and related products.|
|LLC Nizhnekamsk Truck Tire Factory||Manufacture of tires, rubber products, and related products.|
|LLC Nizhnekamsk Tire Plant CMK||Manufacture of tires, rubber products|
|JSC Nizhnekamsk Plant of Technical Carbon||Production and sale of technical carbon|
|JSC Nizhnekamsk Mechanical Plant||Production of engineering products and capital repairs of tire production equipment.|
|Yarpolimermash-Tatneft JSC||Manufacture of tire molds, shaper vulcanizers, equipment for oil- and gas-producing enterprises, casting production|
|LLC Trading House Kama||Sales of automobile tires|
|LLC Tatneft-Neftekhimsnab||Provision of material and technical resources for enterprises of the petrochemical complex|
|LLC Scientific and Technical Center Kama||Scientific research and development|
|LLC Energoshinservice||Provision of services|
BASIC TECHNICAL AND ECONOMIC INDICATORS OF ENTERPRISES OF THE PETROCHEMICAL COMPLEX
|Name of indicators||Unit||2015||2016||2017|
|Technical carbon production||tonness||117 130||118 033||134 383|
|Manufacture of tires, total||thousand units||11 991||11 522||12 876|
|— truck tires||thousand units||1 743||1 613||1 848|
|— light truck tires||thousand units||1 129||1 517||1 408|
|— car tires||thousand units||8 042||7 154||8 230|
|— agricultural tires||thousand units||175||176||178|
|— other||thousand units||27||24||22|
|— Truck tires CMK||thousand units||875||1 039||1 191|
|Sales of tires, total||thousand units||11 861||11 998||13 059|
|Revenues from sales||RUB million||38 764||41 586||48 085|
|Net profit||RUB million||311||854||2 391|
|EBITDA||RUB million||2 879||3 534||5 447|
SALE OF TIRES
MAIN TYPES AND VOLUMES OF TIRE PRODUCTS TIRE PRODUCTS ARE SOLD IN THREE MARKETS:
- Market of original equipment;
- Secondary replacement market;
- Exports to CIS member-states and non–CIS countries.
DYNAMICS OF SALE OF TATNEFT TIRES BY MARKETS, MILLION UNITS
SALE OF TIRES BY BRAND, %
DIRECTIONS OF SUPPLIES OF TIRES, %
PRODUCT POSITIONS IN THE RUSSIAN TIRE MARKET
|Russian tire market||thousand units||55 716||45 052||43 709||51 266|
|Sales of the petrochemical||thousand units||9 447||9 164||8 869||9 863|
|Market share of the||%||17,0||20,3||20,3||19,3|
IN 2017, THE TIRE BUSINESS OF THE COMPANY WAS A KEY PARTICIPANT IN ALL MAJOR NICHES OF THE RUSSIAN TIRE MARKET
The Company's share —
in the domestic tire market of Russia
Доля Компании на российском рынке в 2017 году по легкогрузовым, грузовым комбинированным и ЦМК шинам демонстрирует положительную динамику, что прогнозируется и в 2018 году, за счет роста реализации по всем группам шин, основная доля которых приходится на вторичный рынок России.
The Company's share in the Russian market in 2017 for light-truck, truck, combined and solid metal cord tires shows a positive trend. The forecast for 2018 is also positive due to the growth of sales of all groups of tires, the main share of which falls on the secondary market of Russia.
The Russian market is the main market for finished products and accounts for about 76% of the total sale of the tire business. In 2017, the tire business confidently increased its sale volumes in the secondary market of the Russian Federation, including through attractive incentive programs and competitive price positioning. The growth of sales in Russia’s secondary market in 2017 relative to the preceding year was 19%, which was mainly due to the sale of car and light truck tires, including tires of the Viatti brand.
The commodity distribution network covers all the constituent territories of the Russian Federation and includes more than 400 counterparties. In addition to wholesale distributors and retail trade and service networks, tire business products are also supplied to such large corporate customers as SUE Mosgortrans and others.
The main consumers of tire products of the tire business in the primary market are the largest domestic and foreign manufacturers of automotive equipment: KAMAZ, UK GAZ Group, Volkswagen Group Rus, Ford Sollers Holding, and others. During 2017, tires were shipped to 30 automobile makers. At the end of 2017, exports went to more than 47 countries, with more than 90 counterparties. With respect to exports, the high rate of the US dollar and the euro and the active development of the markets of new countries made it possible to increase the sales of the petrochemical complex by 4%. Markets were developed in new countries and relations with former ones were renewed: Angola, Bangladesh, Belgium, Bosnia, Cyprus, Somalia, Uganda, Estonia.
- Non-price programs to stimulate sales in domestic and export markets: program for extended quality assurance, free tire service.
- Brand communication strategy: advertising in the media, testing of tire products, promotion on the Viatti tires website and its mobile version, participation in exhibitions and fairs, printing, souvenir and POSM products.
PRODUCTION OF TECHNICAL CARBON
In 2017, the production of technical carbon made 134,000 tonnes, which is 13.5% more than in 2016. The technical carbon produced is competitive, and the quality meets the requirements of regulatory documentation and satisfies consumers. In 2017, 133,800 tonnes of technical carbon were sold, which is 12.5% more than in 2016.
SALES OF TECHNICAL CARBON, TONS
Competitive advantages in the tire business and manufactured tire products:
- Wide popularity and experience of operation of products, first of all KAMA products;
- Wide representation and availability of tire products due to the developed distribution network within the country and abroad;
- Modern equipment and advanced technologies of tire production, which became possible due to investments of the parent company — PJSC Tatneft;
- Experience of cooperation with automakers, which allowed to improve the technical characteristics of products, and to ensure a demand for the future;
- Development of the range of products in accordance with the trends of the automotive industry and the needs of the tire market.
All products meet the requirements of regulatory documents.
NOMINATIONS OF THE PETROCHEMICAL COMPLEX AND PRODUCTS IN 2017
- Tatneft-Neftekhim Management Company was awarded the first degree diploma in the nomination "Energy Efficient Technologies and Equipment" within the XVIII International Specialized Exhibition "Energy. Resource Saving" and the XV International Symposium "Energy Resource Efficiency and Energy Saving".
- In the contest "The Best Goods and Services of the Republic of Tatarstan", in the nomination "Products for Industrial Purposes", solid metal cord tire KAMA 385/65R 22,5 NF 202 was recognized as a laureate, and tire 315/60R22,5 NF201+ — as a diploma winner.
- Within the framework of the specialized exhibition "Oil, Gas. Petrochemicals-2017" a third-degree diploma in the nomination "Products with New Improved Characteristics" was awarded to the Nizhnekamsk Tire Plant for its innovative approach to creating a truck tire TsMK KAMA NR201 215/75 R17.5.
- The Nizhnekamsk Tire Plant was nominated for a prize of the Government of the Republic of Tatarstan for quality in the nomination "Production Systems".
- Kama Trading House took the second place in the competition "Exporter of the Year - 2016" in the nomination "Dynamically Developing Exporter" established by the Ministry of Industry and Trade of the Russian Federation and the Russian Export Center.
- Product of the Nizhnekamskshina Plant — pneumatic tire 235/55 R 17 Viatti Bosco A/T V-237 — was recognized as awinner of the all-Russian competition "100 Best Goods of Russia" in the nomination "For Success in Import Substitution".
- Solid metal cord tire KAMA 385/65R 22.5 NF 202 manufactured by the Nizhnekamsk Tire Plant is a winner of the all-Russian competition "100 Best Goods of Russia" in the nomination "Products for Industrial Purposes".
- PJSC Nizhnekamskshina was recognized as a winner of the XIII all-Russian competition "Leader of Environmental Activities in Russia - 2017" in the nomination "Environmental Management and Industrial Waste Management".
- Based on the results of the all-Russian rating of quality of goods and services "Star of Quality of Goods and Services", JSC Nizhnekamsktekhuglerod was nominated for the "Best Enterprise of Russia - 2017" (5th place of the 100 best companies in the region).
- Based on the results of the all-Russian business rating 2017, JSC Nizhnekamsktekhuglerod was recognized as an "Industry Leader" (5th place in the Volga Federal District among the companies that are registered and successfully operate in the Russian Federation).