CIS cement responds to demand
By Sandy Guthrie01 August 2012
The demand for cement grew in almost every CIS member state during 2011, with production responding to the increasing consumption, according to a report from research company PMR.
It said that the majority of CIS member states had overcome the consequences of the 2011 global economic crisis. GDP in every member state rose last year and, compared to 2010, the overall construction sector output grew in 2011, said PMR.
It added that the governments' role in the construction sector had increased significantly. To stimulate employment growth and higher spending, CIS governments initiated large-scale infrastructure projects, which also benefited construction output.
According to PMR's latest report, Cement Market in CIS Countries 2012 - Development Forecasts for 2012 to 2015, the 12 countries covered in the report produced a combined 93.5 million tonnes of cement in 2011. Nearly 60% of the total output was produced in Russia, while Ukraine produced 11% and Kazakhstan 8%. The remaining nine countries produced only 22%.
At the same time, cement consumption in the region reached 98.5 million tonnes - more than 5% higher than local production. PMR said that the top three producers of cement consumed more cement than they produced in 2011.
It added that the balance was also negative for the remaining countries if taken as a whole, although within those countries some produced more than they consumed.
"Given the positive economic outlook for most of the countries," said PMR, "it is expected that production will grow in 2012 by approximately 14% to nearly 106 million tonnes. At the same time, these states' total consumption is expected to reach nearly 109 million tonnes."
It said the gap between cement consumption and production in the CIS region was largely filled by imports from three countries - China, Turkey and Iran.
A very small amount of cement is exported outside the CIS by these 12 countries, and PMR said that in terms of external trade, significant changes were not expected.
Starting this year, Russia, Belarus and Kazakhstan have launched a common economic area, which enables these countries to trade internally without customs tariffs. PMR said this suggested that internal cement trade between these countries would be expected to increase. Another important factor that might influence cement trade volume and stimulate international competition is Russia's accession to the World Trade Organisation, it said.
Although large international cement producers such as HeidelbergCement, Lafarge and Holcim have a strong presence across the CIS region, PMR found that local and CIS-originated cement producer companies and groups still dominated the market in most of the countries.