TVK Annual Report 2010 (pdf, 2.5 MB)

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Our Our production Our major goal called for the optimal operation of our petrochemicals business, the maximum utilization of available capacity and the resulting growth of production volume along with efficiency improvements. Highlights The economic pillar of sustainable development is extremely important for TVK. The most important challenges we must face are related to the life cycle of our products: reducing environmental impacts, improving product quality, ensuring safe products and production processes and expanding our long term portfolio biologically degradable products. Our current production processes and each development must be based on scientific results and the best available technology. Competitive advantages According to our ‘crude to plastic’ philosophy we optimize our petrochemical and refining production through the whole hydrocarbon value chain, which not only maximize our profitability but reduce the risk on group level. We exploit synergies from integration to enhance our operational excellence considering coordinated planning, feedstock supply with refining and shared services within MOL Group. These elements provide us significant benefits and flexibility. Our geographical location also gives a competitive advantage, offering low-cost access to the fast growing polymer markets of Central Europe. We have a competitive asset base with a wellbalanced product portfolio. Our highly talented staff has capabilities and experiences to manage most effectively our operation and to face the challenges as well. Reconstruction and development program In 2010, the major parts of investments were the maintenance projects renovations in an amount of HUF 3,583 million and the efficiency improvement individual projects in a value of HUF 1,577 million. We spent HUF 343 million on other development projects, within which value of Olefin-1, Olefin-2 and PP4 catalyst purchase was HUF 198 million. Our production plants and their capacities Plant Capacity (kt/year) Technology Year commissioned Olefin Plants Olefin-1* 370 Linde 1975 Olefin-2* 290 Linde 2004 Ethylene total 660 Polymer Plants LDPE-2 65 BASF 1991 LDPE total 65 HDPE-1 200 Chevron Phillips 1986 HDPE-2 220 Mitsui 2004 HDPE total 420 PP-3 100 LyondellBasell 1989 PP-4 180 LyondellBasell 1999 PP total 280 Polymers total 765 * Production capacity calculated for ethylene Major Processes of Vertically Aligned Production at TVK Monomer Production Polymerisation Purchased naphtha, AGO LDPE Production processes We utilise our vertically integrated structure of production to produce raw materials for plastics processing from a variety of hydrocarbons. The production process includes two major stages: making monomers and polymerisation. The olefin plants convert the naphtha, gas oil and liquefied gases purchased from the MOL Group into ethylene and propylene to be processed into polyethylene and polypropylene in TVK’s own polymer plants. Ethylene, produced in the olefin plants is sold to BorsodChem. In 2009 we concluded a contract with Synthos, one of the largest chemical companies in Poland for the supply of raw C4 fraction during 2010-2012. The surplus propylene produced in the olefin plants are sold to Slovnaft Petrochemicals and external customers. The MOL Group uses the co-products cracking, such as isobutylene, benzene-toluene, C8 and C9 fractions to make MTBE and benzene or as components in blended gasoline and heating oil. Quench oil is utilised as feedstock for making carbon black by Tiszai Columbian Koromgyártó Kft., located in the TVK industrial complex Olefin production The Olefin-1 Plant started up in 1975 and Olefin-2 came on line at TVK site in 2004. Both utilise Linde technology. Calculated for ethylene, the annual capacity of the two plants from 2008 increased from 620 kt to 660 kt as a result of the efficiency improvement modifications made in 2007. In 2010, the Olefin plants’ monomer production (ethylene and propylene together) exceeded the former year’s same value. Monomer production of Olefin plants increased by 5% compared to previous year. In 2010, the sales income of olefin production increased by 63 %, ethylene output was higher by 5% compared to 2009. The capacity utilisation of both plants calculated for ethylene increased from 86% to 90%. HDPE Purchased ethylene Ethylene sold Purchased liquefied gases Purchased propylene LDPE Plants HDPE Plants Olefin Plants PP Plants PP C4, BT, C8, C9 fractions, quench oil, hydrogen Propylene sold Our businesses 20 TVK Annual Report 2010 21
Polymer production The total polymer production amounted to 750.9 kt in 2010 that is higher than in the previous year by 27.1 kt. In this year, production was lower in case of LDPE and PP product segment, while in case of HPDE products, the production was higher than in 2009. Record production was achieved in HDPE-2 Plant. The polymer plants used the available monomers in accordance with the optimalisation of customer and product portfolio. The net income from polymer sales amounted to HUF 226 billion in 2010, which is higher than in 2009 (HUF 169 billion) by HUF 57 billion. Higher quoted polymer prices had a favourable impact on the revenue of the Company. Low-Density Polyethylene (LDPE) product group Using ICI technology, the LDPE-1 Plant of TVK came on in 1970 and was complemented by the LDPE-2 Plant of BASF technology in 1991. The LDPE-1 Plant was eventually shut down on 16 March, decreasing the annual LDPE capacity of TVK unit to 65 kt. The sales income of the LDPE Product Group was HUF 26 billion in 2010, up by 38% compared to 2009. The sales volume was 80 kt. The production volume of LDPE product was 65 kt in 2010, down by 3% compared to 2009. The capacity utilisation was 99.6%. High-Density Polyethylene (HDPE) product group Utilising Chevron Phillips process technology, the HDPE-1 Plant was constructed in 1986. The HDPE-2 plant utilising the Mitsui Chemicals so-called CX-process came on line in 2004. The joint annual capacity of the two plants is 420 kt. In 2010, the sales income of the HDPE Product Group increased by 28% and reached HUF 117 billion. The total production volume was 417 kt, up by 8% compared to 2009, increasing the capacity utilization to 99.1%. Polypropylene (PP) product group The PP-3 Plant has operated since 1989 with Spheripol (Himont, currently LyondellBasell) technology, and has been complemented by the PP-4 Plant, which uses Spheripol (Montell, currently LyondellBasell) technology since 2000. The total annual capacity of the two plants is 280 kt. The PP product sales income was HUF 83 billion, up by 41%. The total 269 kt production volume was on the same level as in 2009, while the capacity utilization was 96.1%. Outlook Due to successfull turnarounds and maintenance works carried out in the preceding years, we shall fully utilize the capacities in 2011: we have no shut downs planned in the Olefin plants. Polyolefin units will undergo some (7-10) days technology cleaning shut downs during the year. Major reconstruction and maintenance planned in 2012. The external economic environment compels us to maintain austerity in cost management while focusing first of all on the continuous improvement of operating efficiency, maintaining and ensuring secure operations, enhancing the energy efficiency of our systems of process technology in view of the substantial rise of energy prices and on identifying and immediately implementing any remaining opportunities presented by our technological systems besides considering the environmental aspects in full. Olefin Business Unit, 2006-2010 SALES INCOME HUF MILLION 0 50 000 100 000 150 000 2006 2007 2008 2009 2010 ETHYLENE PRODUCTION KT 0 100 200 300 400 500 600 700 2006 2007 2008 2009 2010 CAPACITY UTILISATION % 0 20 40 60 80 100 120 2006 2007 2008 2009 2010 * Capacity utilisation calculated for ethylene SALES INCOME HUF MILLION 0 10 000 20 000 30 000 40 000 50 000 HDPE Product Group, 2006-2010 SALES INCOME HUF MILLION 0 50 000 100 000 150 000 2006 2007 2008 2009 2010 VOLUME SOLD KILOTONS 0 100 200 300 400 500 2006 2007 2008 2009 2010 CAPACITY UTILISATION % 0 20 40 60 80 100 120 2006 2007 2008 2009 2010 SALES INCOME HUF MILLION 0 20 40 60 80 100 Our businesses LDPE Product Group, 2006-2010 2006 2007 2008 2009 2010 VOLUME SOLD KILOTONS 0 20 40 60 80 100 120 2006 2007 2008 2009 2010 CAPACITY UTILISATION % 0 20 40 60 80 100 120 2006 2007 2008 2009 2010 PP Product Group, 2006-2010 2006 2007 2008 2009 2010 VOLUME SOLD KILOTONS 0 50 100 150 200 250 300 2006 2007 2008 2009 2010 CAPACITY UTILISATION % 0 20 40 60 80 100 120 2006 2007 2008 2009 2010 22 TVK Annual Report 2010 23
Page 1 and 2: TVK Annual Report 2010 TVK Annual R
Page 3 and 4: Review of the year of the year Revi
Page 5 and 6: Mission Our company offers petroche
Page 7 and 8: Chairman’s letter letter Review o
Page 9 and 10: usinesses Our businesses Our busine
Page 11: Consolidated Consolidated companies
Page 15 and 16: Financial and Financial and operati
Page 17 and 18: TVK Group consolidated audited figu
Page 19 and 20: Headcount Full Time Employees Decem
Page 21 and 22: This is a translation of the Hungar
Page 23 and 24: Consolidated income statement 31 De
Page 25 and 26: Consolidated subsidiaries Notes Not
Page 27 and 28: assets (including previously unreco
Page 29 and 30: comprehensive income. Impairment lo
Page 31 and 32: xix) Leases The determination wheth
Page 33 and 34: IFRS 3 Business Combinations Amendm
Page 35 and 36: 5. Property, plant and equipment Th
Page 37 and 38: 10. Other current assets Other curr
Page 39 and 40: 15. Provision for liabilities and c
Page 41 and 42: 23. Other operating expenses 25. In
Page 43 and 44: The net book value and fair value o
Page 45 and 46: 29. Related party transactions Tran
Page 47 and 48: Key Corporate Data Key Corporate Da
Page 49 and 50: Sustainability report report Sustai
Page 51 and 52: • The projects started in 2009 ha
Page 53 and 54: Future challenges 2011 Economic sus
Page 55 and 56: In order to implement the above TVK
Page 57 and 58: Fire safety Prevention of fire and
Page 59 and 60: Our sponsorship focuses on the regi
Page 61 and 62: Safety 2005 2006 2007 2008 2009 201
Page 63 and 64:
the Annual General Meeting in 2006,
Page 65 and 66:
Remuneration of the members of the
Page 67 and 68:
1. 5. 2. 3. 6. 1. MOSONYI, György
Page 69 and 70:
KEMÉNYNÉ ÚJVÁRI, Ildikó Member
Page 71 and 72:
TVK Plc. has no treasury shares. Sh
Page 73 and 74:
Shareholder information Head office
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TVK Annual Report 2010 (pdf, 2.5 MB)

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