Organics

 

The entry of the petrochemical industry into Serbia was back in the 1970's. Between 1975 and 1985 several high-tonnage capacities for manufacturing of basic petrochemicals and their derivatives were brought on-stream, such as facilities in the company PETROHEMIJA from Pancevo (200,000 tpy of ethylene, 85,000 tpy of propylene, 45,000 tpy of C₄-fraction, 100,000 tpy of VCM and other by-products), than in the company FSK from Zrenjanin (45,000 tpy of 1,3-butadiene, 35,000 tpy of MTBE and 22,000 of Raffinate-2) and finally in the company Methanol-Acetic Acid Complex (MSK) from Kikinda (200,000 tpy of methanol and 100,000 tpy of acetic acid).

In this period two formaldehyde plants were also established. Calculated on 37% solution a capacity of 25,000 tpy was built up by the company HINS in Novi Sad and the capacity of 50,000 tpy by the company PKS-LATEX in Cacak. During the last decade these capacities had been operating at minor level and few years ago the capacity in Novi Sad was closed down.

The company BRIXOL had brought on-stream the facility for production of phthalates (DOP and DBP) in Vrsac in 1985, but this plant was closed down in 1991.

In 1991 the company FSK was taken over by PETROHEMIJA, a petrochemical company which has been the leading domestic manufacturer and exporter of chemicals for many years. Several production and auxiliary units at Pancevo location had been seriously damaged during NATO bombing campaign – most of them were repaired but not facility for production of VCM. It should be mentioned that PETROHEMIJA’s middle-term development program includes capacity enlarging of basic ethylene-propylene plant by 20%. The erection of two new manufacturing plants is also projected: (1) carbon black plant with a designed capacity of 15,000 tpy, and (2) polypropylene (PP) homo- and co-polymers plant with a designed capacity of 180,000 tpy.

The company MSK from Kikinda is one of the most important Serbian exporters, having in mind that the dimension of the domestic market for their main products is very limited. MSK successfully operates two large production plants – 200,000 tpy of methanol and 100,000 tpy of glacial acetic acid, and also a facility for production of sodium acetate (pharmaceutical grade) with capacity amounts of 600 tpy.

NIS-Petroleum refinery PANCEVO in Pancevo has a small-size unit for extraction of benzene and toluene with input capacity amounts less than 30,000 tpy. Total annual production of these two important aromatic hydrocarbons has never exceeded level of 10,000 tons and currently it is at minor level. However, by the end of 2005 this company will have started-up a large-size aromatics plant (72,000 tpy of benzene, 70,000 tpy of toluene and 100,000 tpy of mixed xylenes).

However, domestic demand of aromatics has dropped down significantly as the main consumers - TDI and LAB plants at location Baric - are out of operation. Toluene-diisocyanate (TDI) plant has been disassembled and sold in Siria. Production of linear alkylbenzene (LAB) has not been restored after NATO military intervention - this plant with the capacity of 50,000 tpy is based on the use of normal paraffins and “HF Technology” licensed by UOP. Sulfonation unit for conversion of LAB into LABS has the capacity of 25,000 tpy and it is already privatized by local managers.

Production of More Important Organic Chemicals

 

The petrochemical industry of Serbia has been always significantly oriented towards export, even during the existence of the former Yugoslavia. That is the reason why the larger petrochemical producers, having facilities largely exceeding demand on domestic market, are today in a specific position. Having in mind today's worldwide trends toward mergers, they will very likely have to think of their future existence in the cooperation with some foreign companies.

 

Supply-Demand Balance:

High-Tonnage Petrochemicals Manufactured in Serbia

	Tons per year
Ethylene
Supply (PETROHEMIJA, Pancevo)	200,000
Demand on domestic market	146,000
HDPE (PETROHEMIJA, Pancevo)	92,000
LDPE (PETROHEMIJA, Pancevo)	54,000
Surplus for export	54,000
PROPYLENE
Supply (PETROHEMIJA, Pancevo and NIS-Petroleum Refinery Pancevo)	≈ 120,000
Demand on domestic market	35,000
PP (HIPOL, Odzaci)	35,000
Surplus for export	85,000
BUTADIENE
Supply (PETROHEMIJA, Pancevo)	45,000
Demand on domestic market	32,000
SBR (PETROHEMIJA, Pancevo)	29,000
SBA Latex (PKS-LATEX, Cacak)	3,000
Surplus for export	13,000
MTBE
Supply (PETROHEMIJA, Pancevo)	35,000
Demand on domestic market               (PETROHEMIJA, Pancevo and                NIS-Petroleum Refinery Pancevo)	22,000
Surplus for export	13,000
METHANOL
Supply (MSK, Kikinda)	200,000
Demand on domestic market
Acetic acid (MSK, Kikinda)	55,000
Formaldehyde (PKS-LATEX, Cacak)	10,000
Other consumers	4,000
Surplus for export	131,000
ACETIC ACID
Supply (MSK, Kikinda)	100,000
Demand on domestic market	2,000
Food industry	1,700
Sodium acetate (MSK, Kikinda)	150
Other consumers	150
Surplus for export	98,000
BENZENE
Supply (NIS-Petroleum Refinery Pancevo)	72,000
Demand on domestic market	17,500
LAB (PRVA ISKRA, Baric)	17,200
Other consumers	300
Surplus for export	54,500
TOLUENE
Supply (NIS-Petroleum Refinery Pancevo)	70,000
Demand on domestic market  (in uses as industrial solvent)	3,000
Surplus for export	67,000

 

Following the enlarging production of chemical goods for personal use (pharmaceuticals, toiletries, cosmetics...) as well as the development of other leading industries in Serbia, especially those whose production is significantly dependent on chemical industry (food industry, textile and leather industry, food industry), there are certain breaches in manufacturing of special and fine organic chemicals.

Sector of "special" or "fine" organic chemicals is rather sophisticated and it requests significant investments in knowledge and staff, and that was for sure the limiting factor for a number of domestic chemical companies. The second limiting factor was the fact that in the former Yugoslavia, according to some directed criteria, this accumulative production had been developed mainly in Slovenia and Croatia. More important companies in this field that are today present in Serbia are PRVA ISKRA in Baric (surfactants), ZUPA in Krusevac (xanthates and auxiliaries for leather industry), MERIMA in Krusevac (surfactants and auxiliaries for textile and food industry), NIS-FAM in Krusevac (surfactants), as well as some of the pharmaceutical companies.

ZUPA started production of xanthates in 1958. Xanthates are flotation agents used in non-ferrous metallurgy. Adding of new production lines has gradually enlarged production – the newest one was brought on-stream in 1983. Total available capacities amount to 11,200 tpy. Xanthates used to be the main export product of this company until the UN imposed sanctions against Serbia, when most of the export markets were lost. Based on utilization by-products of xanthates production process, ZUPA also developed a small-size production of thioglycolic acid. However, it should be mentioned that a present situation in the company ZUPA is very bad and that its business future is completely uncertain.

However, manufacturing of special and fine organic chemicals is the least developed section of chemical industry today in Serbia. The dependence on import of those products, excluding raw materials necessary for production of pharmaceuticals and pesticides, is about 220-250 million $ per year.