Concrete rebound forecast in CIS countries

Annual cement consumption in the Commonwealth of Independent States (CIS) countries will exceed the 100 million tonne mark over the next two years as government support and large projects fuel a rebound in the region, according to an analyst.

Information provider PMR forecasts a +6% year-on-year increase in cement consumption in the CIS region this year alone, rising to +13% increases in both 2011 and 2012, cumulating in projected cement consumption levels of 103.2 million tonnes in the latter year.

The report, Cement Market in CIS Countries - Development Forecasts for 2010-2013, calculates that by 2013, CIS cement consumption will have reached 113.4 million tonnes.

It is a bullish forecast after a difficult 2009 which saw a reduction of more than -20% in the consumption of cement in the region to 76.5 million tonnes.

"In anticipation of increases in demand in the future, cement producers have - often with government support - embarked upon numerous cement production capacity upgrade projects. By and large, the goal is to replace imports of cement with domestic production, and possibly increase export volumes at the same time," the report said.

They pointed to more strenuous efforts on the part of governments to support the construction industries in their countries and the numerous projects carried out as part of the preparation for events to be held in the region, including the 2014 Sochi Olympics and the 2012 European Football Championship.

"Per capita cement consumption in the CIS countries - with their immense infrastructure development and housing needs - should increase steadily and match the levels observed in the more developed countries. With a view to increases in demand in the future, local producers are boosting their cement production capacities," the report said.

Nevertheless, the balance between supply and demand is a fine one. PMR also warned that if the strategy of cement production capacity upgrades is embarked upon simultaneously in several countries, it could tip the scales in the other direction and lead to overcapacity in cement markets of the former Soviet Union