Company Profile: Omsk Carbon Group: catering to sustainable business globally

Since 1944, Russian carbon black producer Omsk Carbon Group (OCG) has had a rich history, demonstrating steady growth. Over the last 25 years, it has grown into a long-standing and reliable partner for the world's leading tyre, mechanical rubber goods (MRGs) and plastics manufacturers. Timofey Kucherenko, Executive Director, Commercial, tells PRA what Omsk Carbon Group has to offer its potential customers today.

PRA: Timofey, please tell us more about the company in general. What is its position in the carbon black market?

If you ask any major carbon black consumers whether they know any manufacturers from Russia, Omsk Carbon Group is the name that you are likely to hear. Omsk has become a generic name in the industry. Omsk is the name of the city from where the company started its history and where its headquarters are located. Founded by the government for its internal tasks, the company became a wholly private business late in the 1990s, and its management made a strategic decision to enter overseas markets.

OCG includes three production sites with capacities totalling 560,000 metric tonnes/year, an R&D centre in Omsk and five international distribution centres providing sales, logistics and aftersales services.

Omsk Carbon Group exports more than 80% of its products and ranks as the world’s seventh or eighth largest in terms of output. Our production technology meets the market’s best standards, and the company operates in the open international market and delivers its products to practically all key regions of the world: Europe, the Middle East, Asia, North and Latin America. Omsk Carbon Group ranks first in Russia’s and Europe’s markets in terms of installed capacity among the macro-region’s manufacturers.

The company owes its growth both to our key customers’ stringent quality requirements and their business sustainability and ambition pursued by our shareholders and senior managers who strive to continually strengthen our company’s presence in the global market, plough back profits, expand the company's capacities and product range and enhance quality.

PRA: What is the company’s share in the Russian market and how is this market expected to evolve in the next few years?

In Russia, our company is the largest carbon black manufacturer having a share of 55% of the overall installed capacity and the country's broadest range of grades. With a demand of around 250,000 metric tonnes/year, the Russian carbon black market has a low capacity. Three or four key players cover all of the tyre market’s needs. Nearly all local brands, both Russian ones and localized global tyre, purchase products from Omsk Carbon Group as an approved and regular supplier.

We expect that as imports decline, local tyre manufacturing within the Russian Federation will grow. Regrettably, this is likely to be accompanied by consumer demand being artificially forced into the B and C segments of lower quality.

PRA: What strengths Omsk Carbon Group has as a supplier?

Firstly, stability and long-standing cooperation. We not only offer our customers one-off spot deals meeting their current needs, but also can pursue a joint long-term supply strategy involving long contracts, guaranteed quantities and foreseeable formula-based pricing terms.

Our company has established well-developed supply chains and warehouse infrastructure across the globe, which enables us to get our products closer to customers so that they can be accessible without customers having to wait until they are finished at a production site.

Omsk Carbon Group is flexible in its customer relationships and takes a personalized approach towards fulfilling quality and labelling requirements. The company operates on the basis of customized specifications and can deliver its products using any of the existing Incoterms options (from FCA to FOB/ CIF/DAP). The wide network of our own dealerships and entities is convenient when it comes to arranging contracts. It also helps us select the contract currency and jurisdiction that work best for our customers.

We also place emphasis on a multilanguage service. There are local region-specific teams working with our customers, for example:

- Omsk Carbon Singapore for Asian markets,
- Omsk Carbon Europe for European markets,
- Omsk Carbon Canada for American markets,
- Omsk Carbon Istanbul for the Middle East and Turkish
markets

The teams operating in these branches are able to speak English, German, Polish, Turkish, Spanish and Chinese. Our English-speaking teams in sales, tech support and logistics at the Omsk headquarters are involved in processes too.

Our ultimate goal is to make our customer forget that our manufacturing facilities are located thousands of kilometers away, but always know that our products are available in stock right in the country of our presence or, at least, within a wider geography, that services are provided within the same time zone in a language convenient to it.

PRA: Please give us an insight into the key trends dominating the carbon black market today.

Since February 2022, key structural changes have been underway. These are based on both geopolitical factors and such factors as changes in competitive landscape and in the conditions forming product cost in various regions.

We are witnessing reallocation of supply. Russia, being historically one of the major exporters of carbon black, has redirected to Asia its flows previously going to Europe, while large quantities of Indian and Chinese products are being shipped to Europe, leading to a shortage on their own domestic markets while at the same time raising prices in Europe. Amid much lengthier and more costly transport routes, products have become much more expensive in each and every one of the markets.

For Russian manufacturers, this is a painful process too, as it involves reshuffling and organization of a new logistics and sales network for Asian markets. But at the end of this journey, we will gain even more confidence and strength, and our customers in Asia will have an absolutely new strategic capability for raw materials purchasing.

PRA: How have Omsk Carbon Group’s exports changed?

Over a span of six months, we have fully reallocated our sales to new Asian markets. Our three plants are running at full capacity, and we are building strong ties with new customers, streamlining logistics processes and deploying our logistic infrastructure, new regional intermediate hubs for storing our products and local warehouses for last-mile deliveries.

We are also interested in the Middle East and Latin America markets where demand for our products is rising. Omsk Carbon Group stands ready to satisfy this demand too.

Despite the ongoing hardships, our distribution entities in Europe are working actively and have already established their contract base for 2023, including major customers. There are objectives to expand our European client pool to make our customer portfolio more diversified and sustainable.

PRA: What are the priorities in Omsk Carbon Group’s development for the short term?

We are following our investment programme that involves increasing our capacities to 830,000 metric tonnes/year while at the same time expanding our array of specialty carbon blacks (such as pigments, conductive and high-purity g rades). The company has continued to invest in extensive expansion and technology. Specifically, we are working on reducing our environmental impacts as part of the global trend and decarbonisation requirements.

The strategy for geographic reallocation of products will be a long-standing one for Omsk Carbon Group. Having entered the new markets, we are here to stay.

Finally, resources for carbon black manufacturing are expected to be scarce globally over the long term, production costs are growing in countries importing the raw materials, so the fact that we are a Russia- based company is a key long-term benefit for our manufacturing, thanks to our access to affordable and plentiful resources.

Contact: omskcarbongroup.com
Team Singapore: +65 6670 6800
Email: sales.ocs@omskcarbon.com

(PRA)

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