Rossiyskaya Gazeta (Moscow), May 21, 2008

SYNTHESIS OF QUALITY AND RESPONSIBILITY

Salavatnefteorgsintez connects the well-being of the native city and the region with its own achievements inseparably.

According to authoritative rating agency Expert, public joint-stock company Salavatnefteorgsintez is a leader on the list of the leading enterprises of the Russian petrochemical industry.

The company can process up to nine million tons of hydrocarbon raw materials per year. In 2007, turnover of the company grew tremendously in comparison to the period between 2000 and 2005 and amounted to 100 billion rubles. Experts connect such a rapid leap with coming of a new team of top managers headed by Damir Shavaleev. Gyulnara Nugumanova talked to the General Director of the company on the eve of the 60th jubilee of the glorious enterprise.

- Damir Akhatovich, how was leadership of the company in the industry achieved?

Shavaleev

First of all, it became possible due to deep integration of the production facilities – they are simultaneously oil refining and petrochemical plus production of mineral fertilizers. Salavatnefteorgsintez is the only enterprise in the country that has preserved its former broad configuration. Whereas in the 1990s many large enterprises were separated, we managed to preserve the unique industrial enclave in the south of Bashkortostan. Moreover so that serious infrastructure including pipeline transport, railway nodes and reserve of electric and thermal generation capacity was created there in the past. Destruction of the main enterprise in the city with population of just 150,000 people resulted in liquidation of Salavat as a city!

Compact location of several powerful production facilities in one place allows their quick management. In turn, this provides a possibility to react flexibly to international trends in the industry. It is the broad product range that enables the company to remain profitable always.

We also managed to preserve the unique human resources. Experience of veterans of the company, managers of technical services having specific skills that have been lost in many industries is valuable for us. That is why our old guard is working actively now in the expert council of the company.

Finally, serious support of Gazprom of which we are a part gives us raw material security and ensures financial independence. All together this works for quality, the main criterion for the products that we make.

- Anyway, quality depends on modernization of production facilities directly.

Shavaleev

The strategy for development of Salavatnefteorgsintez until 2015 makes provisions for investments amounting to 100 billion rubles. Total modernization of the refinery includes putting into operation of primary oil processing plant AVT-6 with capacity of 6 million tons of oil per year, catalytic cracking and alkylation, which will allow upgrade of the level of produced fuel to Euro-5 standard.

The petrochemical facility of the company will face comprehensive reconstruction too. This will be a joint project with SIBUR Holding. Capacity of the ethylene production facility will grow to 1 million tons a year, which will enable the company to approach international leaders like China, India and Arab countries.

- Is it possible to speak about some results of modernization already now?

Shavaleev

In December of 2006, we put into operation a bitumen production facility with design capacity of 300,000 tons per year intended for production of bitumen of oil, road and roofing grade. Increase of the carbide production capacity to 640,000 tons was a serious achievement in 2007. Putting into operation of a viscosity breaking plant in the present jubilee year will allow increasing of the oil proceeding depth and putting into operation of a new polyethylene production facility in the first quarter of 2009 will allow production of 120,000 tons of this product per year.

- What are priorities of the human resources policy of the company?

Shavaleev

This is not a secret that professionals of the Soviet generation were only producers. The current realities require broad management skills. Hence, we start educating the staff for ourselves right from the secondary school. Specialized class – a project new for Bashkortostan – has been functioning successfully since 2006. Participation in the project carried out by school No. 12, Salavat branch of the UGNTU and Salavatnefteorgsintez provides a perfect opportunity for gifted children with a technical set of mind to study chemistry and physics, mathematics and information science in depth, to receive decent higher education and to make a career at one of the leading petrochemical enterprise of the country. Every year we select 25 people who have graduated from the ninth grade of any general school successfully on a competition basis. According to recruitment of 2008 it will be possible to judge efficiency of the experiment.

Salavatnefteorgsintez initiated some corporate educational projects. The only targeted program of education of masters under a program of "double certificate" in Russia has been in effect since 2007. This program is implemented in the framework of long-term cooperation with the Ufa state oil technical university (UGNTU) and French Oil Institute. Program for improvement of qualification of top-ranking managers "Strategic approach to organization of business" has also been implemented since 2007 in the framework of cooperation with the Stockholm School of Economics. Work on establishment of a corporate university for organization of mass teaching of basics of corporate management, ethics, document flow etc is currently underway on the basis of Salavatnefteorgsintez in cooperation with Moscow Business School. The main goal of this project is development of middle-rank managerial staff in the field of contemporary managerial competences.

- Damir Akhatovich, how does your company understand its social responsibility?

Shavaleev

Our company is the second largest taxpayer of Bashkortostan according to the volume of payments. Efficient activity of any enterprise becomes the most important momentum for economic and social development of the entire region. In a narrower sense I understand social responsibility in the following way. A person has worked well and has received a decent salary that he has a right to spend. It depends to a big extent on management of an enterprise that accounts for the major part of the revenue of the city budget how he will spend it: if he engages in sports, if he goes to a cinema theater with his family or if he sits down on a bench in a park with a bottle of beer. Understanding that the city and the enterprise belong to the environmentally unfavorable category, the company allocates more than 250 million rubles for healthcare alone annually. Every employee of our company has a right to receive qualified medical aid on the highest level. The medical center of the company that includes several modern departments including the dentist one will be refilled with the pediatric department on the Day of Children Protection.

Salavatnefteorgsintez is an investor of the main sports facilities of the city and initiator of the largest sports events. Along with this, we stake only on mass amateur sport, primarily at children’s and youth sport. Thus, literally a month ago Salavat received the ping pong championship of Russia among young boys and girls.

Our company sees its main social mission in making native Salavat a modern city in which people live comfortably and safely. Unprecedented action "School without drugs" was started in Bashkortostan on May 12 according to initiative of Salavatnefteorgsintez and with support of the law-enforcement agencies. Films and booklets, roundtable meetings and sports tournaments, as well as bright accessories of the action, all this has to make such notions as health, sobriety and active life position fashionable among the youth.

The city school ball has to unite the young residents of Salavat too. Last year, we organized it for the first time together with Salavatsteklo: Uma2urman and Korni bands sang for 500 best graduates in Neftekhimik palace. For Salavat the event was a kind of cultural shock primarily because the youth really had fun without a single drop of alcohol! The present graduates are longing to see this ball and marks in the school certificates not lower than "four" serve as a pass to the ball.

...Using the opportunity, I wish to congratulate the staff of Salavatnefteorgsintez consisting of many thousands of people, as well as every resident of our city with the 60th jubilee of the company. The modern indivisible and dynamically developing company connects all its tomorrow’s plans and its future achievements with the native city and region inseparably.

Information

Today, Salavatnefteorgsintez means:

- five plants in Salavat (oil refining, gas chemical, chemical Monomer and repair mechanical) and Meleuzovskie Mineral Fertilizers in Meleuz (Bashkortostan).

- use of more than 150 production process, 30 of which have been developed and used in production for the first time in the country

- export to 42 CIS and non-CIS countries.