Kazakh State Chemicals Producer to Borrow $3 Billion Next Year

May 20. Bloomberg

By Nariman Gizitdinov

Kazakh State Chemicals Producer to Borrow $3 Billion Next YearUnited Chemical Co., a unit of Kazakhstan’s sovereign wealth fund, may borrow about $3 billion from banks next year as the nation seeks to boost exports of refined oil and gas products.

The chemicals producer may tap banks including HSBC Holdings Plc (HSBA) to help attract project-financing loans, Chief Executive Officer Dauren Yerdebai said today in an interview in Astana, the Kazakh capital. The producer plans to spend $20 billion to build chemical plants in the next 15 years, he said.

Kazakhstan set up United Chemical in 2008 as part of a plan to expand the economy and produce value-added goods and lessen its reliance on exports of raw materials. An affiliate is overseeing the construction of a $6.3 billion gas chemicals complex to produce polypropylene and polyethylene, used to make plastics, according to the company’s website.

United Chemical is also in talks with Lanxess AG (LXS), the German chemical maker, on an $800 million project to produce butadiene, the petrochemical used to make synthetic rubber, Yerdebai said.

The Central Asian nation holds about 3 percent of the world’s crude oil reserves, according to BP Plc. Exxon Mobil Corp., Royal Dutch Shell Plc, Eni SpA, OAO Lukoil and China National Petroleum Corp. have contribute to $120 billion in FOREIGN investments in the country, which is also the world’s largest uranium producer.

Kazakhstan’s National Wellbeing Fund Samruk-Kazyna, which controls United Chemical, was used to bail out banks and companies during the credit crisis, leaving it in control of assets accounting for half of the country’s economic output. Among its holdings are energy company KazMunaiGaz National Co. and uranium miner Kazatomprom.