The Romanian petrochemical industry, once the pride of the local economy, has been disbanded almost completely. The huge, integrated chemical sites that used to manufacture the whole range of polymers are now in ruins. The only one that is standing is the petrochemical division of KMG International – the former Rompetrol Group – at the Midia site, on the shore of the Black Sea.
Alongside the Petromidia Năvodari refinery – the largest facility of its kind in Romania and one of the most modern in the Black Sea region –, the Midia site benefited from continued support and investment, which helped restart the production installations that had been shut down in 1996 due to the lack of raw materials. Moreover, the site was modernised and complemented with cutting-edge equipment.
Therefore, it would be fair to say that Midia not only survives – it actually thrives, with a production volume, an export volume and a financial standing that are all at a record high in its post-1989 history.
Until 1989, Romania used to have industrial giants such as Oltchim Râmnicu Vâlcea and Arpechim Piteşti (motor and industrial oils, polyethylene, products for the clothing industry – polyester and acrylic fibre), Borzeşti – Oneşti (rubber and other products for the auto industry), Midia Năvodari (polyethylene, polypropylene, products for the clothing industry).
One should also remember the petrochemical business of the following refineries: Petrobrazi (polyolefins – polypropylene and polyethylene), Petrotel (polyolefins, polystyrene and oils), Steaua Română (oils and paraffin wax), as well as Solventul Timişoara (polyolefins), which would get its raw material (ethylene) from Serbia, via a pipeline that connected it directly to the refinery in Pančevo.
The Romanian petrochemical industry had been designed by Nicolae Ceauşescu as an integrated whole that was able to meet 100% of the demand for derivative products of the local market and to export the surplus. Our buyers were not just the friendly countries in the Comecon, in Asia and in Africa, but also certain developed economies of the West.
In the murky post-1989 period, those plants and sites were privatised to various local and foreign investors, but most of those privatisations failed. One after another, the sites shut down. Arpechim is under decommissioning by Petrom, Borzeşti has long been in shambles (only one company managed to break off and survive on its own, Chimcomplex), RAFO has been closed for years, the synthetic rubber manufacturer Carom went bankrupt and was sold for scrap – and so was Solventul.
Oltchim’s destiny is being decided at this very moment. Due to the poor management that went on for years, the plant became insolvent three years ago. The reorganisation plan approved by the creditors involves selling Oltchim piece by piece. The plant is unlikely to continue to operate as a whole, as its assets may be privatised to several investors whose interests may be divergent.
Among these bankruptcies and all the dismantling, the petrochemical industry in Midia survived and grew. Nowadays, it is standing as the only manufacturer of propylene and polyethylene in Romania.
The turning point was in 2000, when the Rompetrol Group took over and implemented a massive program of investment. By then, the polymer production had been halted since 1996. In fact, the only installation that has never stopped operating since 1980 is the one making polypropylene (PP).
Gradually, the site saw the construction of the first cryogenic terminal on the Black Sea coast, to ensure the supply with ethylene (the raw material for polyethylene). The terminal was commissioned in 2006, the same year the LDPE (low-density polyethylene) installation was restarted, after having been idle for more than 10 years.
2007 was the year of the restart of the HDPE (high-density polyethylene) installation. That year also saw the launch of two new automated installations for polymer packaging.
Investment also continued after 2007, when the Group was taken over by KazMunayGas – Kazakhstan’s national oil and gas company.
In 2010, a vast investment programme was kickstarted to increase the capacity of the HDPE installation with over 70% - from 60,000 tonnes/year to 100,000 tonnes per year. The project also aimed at cutting down processing costs with over 10% and at supplementing the range of products with four new varieties with special applications: large blow moulded parts, very thin film and pipes, including pipes for carrying combustible gases.
2010 also saw the completion of the automation of the installations and the integration of the petrochemical operations into the command and control centre of the Petromidia site, which coordinated the refining business of Rompetrol Rafinare. The new centre allowed an integrated oversight of the operations – the control and protection of the technological flows, the collection and online transmission of process data and, implicitly, the reduction of production costs. This was a ground-breaking improvement, the first of its kind in Romania and in South-East Europe.
All this investment in the Midia site eventually paid off. From a production of approx. 20,000 tonnes of polypropylene and not one single gram of polyethylene in 2000, the petrochemical division of Petromidia attained a production of approx. 90,000 tonnes of polypropylene and 64,000 tonnes of low-density polyethylene last year, even with the high-density polyethylene facility temporarily closed due to market conditions.
The progress was closely connected to the refinery line of business, which supplies all the raw materials for the polypropylene production and which grew from 988,000 tonnes of crude oil processed in 2000 to 4,7 million tonnes in 2016.
From 2005 to 2017, more than $100 million were invested in the petrochemical business of the KMG International Group.
Diversification and development of new varieties – the key to the success of the petrochemical business
The secret to keeping the petrochemical business at Midia afloat, aside from good integration with the refinery, was constant adjustment to the requirements of the market. Following the investment in the modernisation of the installations, these past few years saw the development of new varieties to cater to the latest applications.
For instance, the variety for thermoforming, which is primarily used in the food industry, went on to account for 15-20% of the total polypropylene production in the three years since its launch.
The polyolefin varieties (PP, HDPE, LDPE) manufactured at Midia are used in virtually all economic fields: agriculture (plastic film for greenhouses, pipes for irrigation), food industry (packaging for dairy products, disposable cups and containers, wrapping film, food storage containers), FMCG (boxes, crates, containers ranging from vials of a few millilitres to 200-litre casks, toys), personal care products (cosmetics containers, diapers), electronics (device cases, various components), electrical engineering (insulating materials for wire production), automotive (various dashboard components, insulating and padding materials, fuel tanks), clothing (disposable personal protective equipment used in healthcare or constructions, fibre for garments, carpets), constructions (pipes for water and gas or for sewage systems, waterproofing materials for road works) or outdoor furniture (chairs, tables, deckchairs).
In 2016, the Midia site reached the landmark of 2 million tonnes of polymers produced in total and reported a yearly production of 150,000 tonnes, the largest in the past five years, with a 5% increase compared to 2015.
In the current year, the KMGI representatives estimate growing numbers for the petrochemical division: a yearly polymer production of approx. 157,000 tonnes (87,000 tonnes of polypropylene and 70,000 tonnes of low-density polyethylene).
Romania is an emerging market for polymers, with low demand, but room for growth. However, it will be a long way until we reach the consumption levels of Western Europe. For instance, HDPE consumption in Romania is approx. 4 kilograms per capita, while the Western European average amounts to more than 40 kilograms per capita.
One tonne of polypropylene is enough to make approx. 200,000 disposable cups.
Most beer plastic cups used domestically are manufactured from the polypropylene made at the Midia site.
A shopping bag made from HDPE can be as thin as 10 microns.
Approx. 7 grams of polypropylene are enough to make a fibre 10 kilometres long.