cement industry of the republic of belarus · belarus exported 1773 thousand tonnes of cement in...
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CEMENT INDUSTRY OF THE REPUBLIC OF BELARUS
Production.
The cement industry in Belarus is represented by three state-owned cement plants. Until 2012, the total
production capacity of the plants amounted to 4.5 million tonnes per year. During the last 6 years the volume of
cement production was increasing in average by 3.7% annually, despite the decline of growth rates since 2009.
In 2014, 5618.3 thousand tonnes of cement or just 66% of total production capacity was produced. The growth
rate amounted to 11.1%. As of the end of January-September, cement production in Belarus decreased
compared to the same period in 2014 by 15.4% to 627.5 thousand tonnes. The expected amount of cement
production in 2015 is around 5000 thousand tonnes.
In Belarus, three state-owned enterprises are engaged in cement production:
1. Krasnoselskstroimaterialy, OJSC – KSM (Volkovysk, Grodno area). The state share is 91% (significantly
increased since 2002, when the state share was equal to 50%), the share of other shareholders is 9% (legal
persons (958 companies, mostly represented by collective farms) and natural persons (3671))
2. Belarusian cement plant, OJSC – BCP (Kostyukovichi, Mogilev area). The state share is 100%.
3. Krichevcementnoshifer, OJSC – KCSH (Krichev, Mogilev area). The state share is 100%.
6,000
5,000
4,000
3,000
2,000
1,000
0
12.0%
10.0%
8.0%
6.0%
4.0%
2.0%
0.0%
2008 2009 2010 2011 2012 2013 2014
4,218 4,3504,531
4,6044,906 5,057
5,618
3.1%
4.2%
1.6%
6.6%
3.1%
11.1%
Cement production in Belarus2008-2014
production volume, th.tonnes
Cement Industry of the Republic of Belarus
The plants are listed in the register of the
companies that occupy a dominant market
position (25% limitation of profitability).
Since its listing, the plants when pricing of the
goods supplied to the domestic market have to
include the profit that does not exceed the
specified limits to the total cost.
It should be noted that
Krasnoselskstroimaterialy was
transformed into a joint-stock
company in the 90s, two other
enterprise were incorporated in
early 2012.
Source: Uniterrate of increase, %
The structure of cement produced by typeKrasnoselskstroimaterialy, OJSC, 2014
47.3%0.1% 32.4%
20.2%Cement without additives
Sandy cement
Cement containing granulated slag
Cement containing stone screeing dust
The structure of cement produced, Belarusian Cement Plant, OJSC, 2014
Cement without additives
Sandy cement
Cement containing granulated slag
41.2% 56.7%2.1%
The major share of cement products belongs to cement without additives. The plants also produce other types
of cement products: cement containing granulated slag, to a lesser extent, sandy cement and small share of
cement containing stone screening dust.
The structure of cement produced,Krichevcementnoshifer, OJSC, 2014
Cement without additives
Sandy cement
Cement containing granulated slag
portland-cement asbestos
31.4%
0.1%62.3%
1.2%
Cement Industry of the Republic of Belarus
The layout chart shows the plants that use cement in their production process, as well as those that
manufacture products needed for cement production. The plants are situated close to each other, which
reduces time and transport costs.
140,000
120,000
100,000
80,000
60,000
40,000
20,000
0
2010 2011 2012 2013 2014
Cement production in Belarus, 2008-2014
Exports of cement, USD thousand
Cement .............................. 6.5 mln tonnes
Building lime ...................... 0.7 mln tonnes
Ferroconcrete and concrete
products and structures: ....... 6.1 mln m³
Products of industrial
house-building ...................
(panel housebuilding plant, integrated home-building factory)
Ready-mixed concrete
and mortars ........................ 5.8 mln m³
Asphalt concrete ................. 9.2 mln m³
Dry building mixes .............. 0.7 mln tonnes
Lime-sand brick .................. 0.6 bln pieces
Cellular concrete blocks ....... 4.4 mln m³
Expanded clay concrete
blocks ................................ 0.4 mln m³
Asbestos cement products ..... 33.6 mln m²
(slate and other things)
Capacity, 2015
3.2 mln m² of housing
Polotsk
Novopolotsk
Vitebsk
Braslav
Druya
GorodokObol
Ruba
Postavy
Glubokoye
Lepel
Novolukoml
Kokhanovo
Vileyka
Smorgon
Molodechno Borisov
Smolevichi
Mogilev
Shklov
Orsha
Gorki
Chausy
Krichev
BykhovKlimovichi
Kostyukovichi
Minsk
Bobruysk
Osipovichi
Dzerzhinsk
Stolbtsy
ElizovoNovogrudokGrodno
Lida
Berezovka
Krasnoselskij
VolkovyskSlonim
Ataliez
Zaslavl
Fanipol
Lyuban
Smolgovo
Soligorsk
Slutsk
Radoshkovichi
Pukhovichi
Chist
Zatish'e
Gomel
Mozyr
Zhlobin
Svetlogorsk
Rechitsa
Kalinkovichi
Rogachev
Dobrush
Khoyniki
LoyevPetrikov
Glushkevichi
Brest
Baranovichi
Pinsk
Kobrin
Bereza
Luninets
IvatsevichiGantsevichi
Mikashevichi
David-Gorodok
Beloozersk
Chernavchitsy
Kostukovka
Layout chart of building materials production capacities
Krasnoselskstroimaterialy, OJSC
Belarusian Cement Plant, OJSC
Krichevcementnoshifer, OJSC
Total
Cement Industry of the Republic of Belarus
Source: Niptis
In 2014, export share increased up to 31.5%, showing a 3.5 percent growth compared to 2013. Belarus exported
1773 thousand tonnes of cement in 2014 which was 23% more than earlier. The main reasons for export growth
were production growth, weak domestic market dynamics accompanied by the state policy to expand exports
of construction materials. Most of the cement was exported to Russia. Nevertheless, in 2014, Belarus managed
to expand the sales geography, exports to Russia decreased, while to Lithuania and Ukraine exports increased
by 4%.
2010 2011 2012 2013 2014
The volume of production, USD million
500
400
300
200
100
0
Krasnoselskstroimaterialy, OJSC
Belarusian Cement Plant, OJSC
Krichevcementnoshifer, OJSC
Total
Structure of cement export destination in 2014
1% Others
5% Latvia
7% Lithuania
8% Ukraine
79% Russia
Cement Industry of the Republic of Belarus
Source: Niptis
In 2008-2014, excl. 2010, exports were outstripped by imports. At the same time, due to the rapid growth of
housing construction and lack of domestic production during the summer time, the deficit was covered by
imports. In 2010, imports of cement doubled up to 599 thousand tonnes that exceeded exports by 124
thousand tonnes. In 2014, instead of the growth, imports declined by 18 thousand tonnes. In 2014, the sales
geography was constricted: most of the cement was imported from Russia (90%), Lithuania – 6% and
Poland – 4%.
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
2010 2011 2012 2013 2014
Imports of cement, USD thousand
Imports are projected at about 0.6 mln tonnes in 2015.
The average selling prices of cement PC 500 D0 USD/Tonne (FCA net of VAT) in the Republic of Belarus and in the markets of bordering countries,
freight rail costs per tonne October, 2015
Minsk
Russia
Moscow
Saint-Petersburg
RigaLatvia
Lithuania
VilniusKaliningrad
Poland
Warsaw
Bialystok
Grodno
Brest
Vitebsk
Gomel
Mogilev
Ukraine
Kiev
Estonia
Tallinn
Russia
PC 500D0 FCA(net of VAT) $49.6-53.6
OJSC Krasnoselskstroimaterialy
OJSC Belarusian cement plant
3,0 mln tonnes
3,0 mln tonnes
OJSC Krichevcementnoshifer
1,8 mln tonnes
PC 500D0 FCA(net of VAT) $52.4
PC 500D0 FCA(net of VAT) $70.1
PC 500D0 FCA(net of VAT) $71.3
PC 500D0 FCA(net of VAT) $52.1
PC 500D0 FCA(net of VAT) $72.5
Cement Industry of the Republic of Belarus
Source: Niptis
The share of foreign and national producers in the Belarusian market
January-September, 2015, 0.48mln tonnes
16%
foreign producers
84%
national producers
Consumption
During 2008-2014, the domestic cement market was growing by 2% per year, though in 2013 a 1.6 percent
decrease was observed. Nevertheless, cement consumption started to grow again by 3% in 2014. Cement
consumption is closely related to the volume of construction and installation works. During the recent years,
fluctuations in volume of construction and installation works have been observed. In spite of a 10 percent fall in
2012, in 2013 the volume of construction and installation work was almost restored to the level of 2011.
However, due to irregular demand in 2014 it decreased again by 5.4%. The growth of domestic cement
consumption in 2014, despite reduction in imports, was related to the growth of domestic production output.
More than 1/3 of consumed cement in Belarus is used in concrete goods production, including panel
housebuilding. Less than 1/3 of cement is used for commercial concrete and cement mortar production. For
production of cellular concrete, expanded clay and other aggregates 8.1% of total cement production is used,
6.2% of cement is sold by retail
Cement Industry of the Republic of Belarus
Source: Colliers
1,100
1,000
900
800
700
600
500
400
300
200
100
0
Office property market
2008-2014
377
2008 2009 2010 2011 2012 2013 2014 2015`9
Forecast
76
93Th
ou
sa
nd
sq
ua
re m
etr
es
New construction
76
5832
94
217
1,300
1,200
1,100
1,000
900
800
700
600
500
400
300
200
100
0
Retail property market
2008-2014
377
182
2008 2009 2010 2011 2012 2013 2014 2015`9
Forecast
75
131
56
54
5137
Th
ou
sa
nd
sq
ua
re m
etr
es
New construction
Cement Industry of the Republic of Belarus
Source: Colliers
Source: Colliers
1,100
1,000
900
800
700
600
500
400
300
200
100
0
Warehousing property market
2008-2014
2009 2010 2011 2012 2013 2014 2015`9
Forecast
3138
Th
ou
sa
nd
sq
ua
re m
etr
es
New construction
93
137
152
230
270
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
3785.5
Total area, thousand sq m
Property delivery of residential buildings
4087.5
4660.7
5082.9
5710.5
6629.9
5480.1
4482.8
5220.4
5523.0
16.017.4
16.3 17.0 17.117.1
13.6
9.5
12.712.3
Cement Industry of the Republic of Belarus
Source: National Statistical Committee of the Republic of Belarus
Source: Colliers
'The program of effective use of capacities of the organizations of the cement industry for 2015-2020' (hereinafter the
'program'), and the instructions given by the Head of State stipulate for a significant increase in the use of domestic cement
in the construction of concrete roads and streets, approach roads to facilities (driveways) in cities and major population
centers.
Depending on the use of cement as a main binding agent in concrete mixes when building road bases and surfaces, as well
as pedestrian areas, its utilization can be divided into three areas:
- Use of cement for the production of concrete when arranging monolithic concrete roads (streets, driveways and
platforms) with concrete bases.
- Use of cement in the production of piece concrete goods (paving slabs and road panels) to surfaceroads, driveways and
pedestrian zones.
- Use of cement for the production of concrete to manufacture ferroconcrete products and structures when building road
constructions and facilities (concrete structures of bridges, over bridges, water drains, curbstones, etc.)
The National Infrastructure Plan
The National Infrastructure Plan developed by the Inter-institutional Infrastructure Coordination Council assesses the
need for the infrastructure until 2030. In general, the plan includes 100 Public-Private Partnership projects.
The projected average annual volume of expenses for the development of Belarusian infrastructure would be around 1.8
billion US dollars.
Competiveness of the domestic cement
Transfer wholesale prices for cement portland cement in October 2015 in the Republic of Belarus and neighbouring
countries, having regard to the relatively high logistical costs, allows to confirm the sufficient price protection of the
internal market.
The volumes of cement imports from Russia (to 400 thousand tonnes in 2015) are stipulated by the approved balance of
the mutual foreign trade turnover of cement of the Union State for 2015 and favourable for the Republic, because the
positive balance of the physical volumes of cement supplies is more than 1 mln tonnes.
It became possible due to the drastic (more than twofold compared to 2013) cost reduction of the production based on
returned to service and developed capacities.
Reduction in expenses in the process of cement manufacturing occurred because of the transition to pulverized coal fuel
and elimination of the investment component from the cost structure. The deactivation of the old wet-method facilities
and relief of non-core assets exercised a significant influence on the increase of the competitive price sustainability of the
domestic cement in the internal and external markets.
As a result of the purposeful actions on the increase of the domestic cement competiveness, the internal transfer prices
per 1 tonne of portland cement have declined from 100 USD in 2013 and 86 USD in 2014 up to 53 USD in the current year.
Cement market forecast for 2016
Providing a zero growth rate of investments in the fixed capital (favourable forecast of the Ministry of Economy) in 2016,
the condition of the domestic cement market and foreign trade operations will be likely to repeat the situation of the
current year (in general).
However, if the GDP growth turns negative, it should be borne in mind that each percent of reduction in GDP leads to the
decline in demand for cement in the domestic market by 4-5% and corresponding decline in the marketable production
volume.
In 2016, it is planed to maintain the volume of cement deliveries to the Russian Federation, and should any unfavourable
situation in the Russian construction market appear, compensate the exports decline in a given direction by the increase in
supplies to Poland.
НИПТИС
Cement Industry of the Republic of Belarus