JV to Produce Tall Oil Fatty Acids

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Orgkhim and Ilim set up a 50-50 joint venture to produce chemical products, including tall oil fatty acids and their derivatives, at a plant in northern Russia. The acids can be used in making metalworking fluids, corrosion inhibitors and industrial lubricants.

The JV, called Amber Stream, is scheduled to start production by the end of 2017 at its plant in Koryazhma, Arkhangelsk Oblast. The facility will also produce rosin esters.

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Orgkhim is a Russian chemical and process oils producer, and Ilim Group is Russias largest pulp and paper producer.

The project involves an upgrade of the pine chemical plant [located at Ilims facility in Koryazhma], to allow for value-added biochemical products, Orgkhim said in a July 12 press release. Besides metalworking fluids and corrosion inhibitors, tall oil fatty acids can be used to make lubricants for applications such as belt conveyors, escalators and tracks. Orgkhim said its rosin ester products are used in such applications as road marking and for adhesives, paints and coatings.

The JVs products will be for both domestic and global markets.

Our companys development strategy through 2030 involves more diversification and exploration of new opportunities. In addition to our traditional and still growing segments such as pulp and packaging materials, we are resolute to develop other promising opportunities, including biochemical production, said Ksenia Sosnina, Ilims chief operating officer.

Nikolay Khodov, Orgkhims CEO, said this deal will allow the company to build up a tangible presence in the global pine-derived chemical market.

Biochemical holding company Orgkhims revenue was more than $100 million in 2016. The company operates three production facilities located in Uren, in Nizhny Novgorod oblast, and in Voronezh and Krasnoyarsk. Its business falls into two main segments: petrochemicals and pine-derived chemicals. At its 110,000 metric tons per year plant in Uren, it makes process oils for production of tires, rubber and rubber compounds.