Source: PMR Publications

The global financial crisis has had an impact on the construction industry in the Commonwealth of Independent States (CIS) region, and a new report expects both the production and consumption of cement to contract in 2009. According to the “Cement market in the CIS countries 2009--Development forecasts for 2009-2011” report recently published by research and consulting company PMR, the market will gradually recover in subsequent years, whereas, in the long term, per capita cement consumption in the CIS countries--with their immense infrastructure development and housing needs--should steadily increase to match the levels observed in the more developed countries.

The reports also mentions that, between 2003 and 2008, the average annual increase in the monetary value of cement consumed in Russia, Ukraine, Kazakhstan, Belarus, Uzbekistan, Azerbaijan, Moldova, Turkmenistan, Georgia and Armenia was percent, reflecting a steep rise in cement prices and an ongoing construction boom in these countries. Last year, the total volume of residential construction in the region came to almost 100 million cu meters. Given the similar rates of development in, and numerous links between, these countries, they may be treated as a single cement market, with a total population of more than 260 million.

Until 2008, cement production in the 10 countries in question grew by more than 10 percent each year, the increase having been prompted by growing demand. According to Robert Obetkon, a construction market analyst at PMR and the author of the report: “As a result, output in 2007 exceeded the figure observed five years ago by more than 50 percent.” In 2008, however, the 90 cement plants operating in the region reduced production levels to just over 90 million tons--with Russia accounting for 70 percent of total output--in order to adjust to the more modest demand for, and increased imports of, cement to the region.

PMR expects that in 2009 cement output in the ten countries will decline further, despite the fact that several new cement production facilities--with a total annual production capacity in excess of 10 million tons--will be implemented this year. Both the old and new cement plants will, unfortunately, have to adjust their output to take account of the subdued demand. Obetkon says: “Next year, new production facilities with a capacity of more than 20 million tons are due to be launched; we predict that the region will again become--as was the case between 2003 and 2006--a net exporter of cement, and that this will continue in 2011.” For more information on the report, contact sales@pmrpublications.com.