ntc “gidrol-krovlja” ©, moscow, russia, 2008 the russian market for roofing and waterproofing...

NTC “Gidrol-Krovlja” ©, Moscow, Russia, 2008

THE RUSSIAN MARKET FOR THE RUSSIAN MARKET FOR ROOFING AND ROOFING AND

WATERPROOFING MATERIALS:WATERPROOFING MATERIALS:

WHAT LIES WHAT LIES AHEAD?AHEAD?


The Russian market for roofing and waterproofing materials: what lies ahead?

2

AGENDAAGENDA

1.1. A Crisis and the main Russia’s macroeconomic indicatorsA Crisis and the main Russia’s macroeconomic indicators

2.2. The current state and trends of the Russia’s construction The current state and trends of the Russia’s construction

marketmarket

3.3. The review of the Russia’s waterproofing materials The review of the Russia’s waterproofing materials

market:market:

• productionproduction

• changes in consumer and producer priceschanges in consumer and producer prices

• exports and importsexports and imports

• market sizemarket size

• single ply polymer membranes marketsingle ply polymer membranes market

4.4. The forecast of market development for the period until The forecast of market development for the period until

20120133


G D P

0,2 1,1

6,47,7 8,1

5,6

-7,9

3,12,00,9

2,9 2,1

-10

-5

0

5

10

2005 2006 2007 2008 2009 2010F

%, p.

a.gr

owth

EU-27 Russia


3

Development of Russia’s GPD vs. crude oil price Former President Putin, 17/06/2010:

“Russia begins to come out of a recession”

GDP: + 4,0…4,4% (-7,9% in 2009)industrial production index: +2,5% (-10,8%)inflation rate: +7…8% (+8,8%)permanent investment: +2,5% (-16,2%) index of real wages: +3,6% (-2,9%)

Weaknesses of Russia’s economy:

overdependence on commodity production and exports low labor productivity poor infrastructure excessive regulation of businesses corruption weak rule of law

Annual average oil "Urals" price

49,8 27,6

-66,0

16,321,1

40

60

80

100

2005 2006 2007 2008 2009 2010F

USD

/ b

arre

l

-100

-50

0

50

100

%,

p.a

. gr

ow

th

Urals price index (2004=100%)



4

Permanent investment

Industry production index

Percentage change compared to the previous year, work.day adj.(sources: Eurostat, Rosstat)

21,1

9,1

-16,2

0,9

-1,9

0,05,56,23,6

16,710,9

2,5

-20

-10

0

10

20

30

2005 2006 2007 2008 2009 2010F

%,

p.a

.gro

wth

EU27 Russia

-1,9

-14,8

0,62,71,5

4,9 4,1

6,85,1 6,3

-9,3-15

-10

-5

0

5

10

2005 2006 2007 2008 2009 2010F

%,

p.a

. gr

ow

th

EU-27 Russia



5

TOTAL CONSTRUCTION OUTPUTTOTAL CONSTRUCTION OUTPUT

Percentage change compared to the previous year, work.day adj. (sources: Rosstat, Eurostat, Euroconstract, FMI Corp.)

Percentage change compared with the same quarter of the previous year, work.day adj. (sources: Rosstat, Eurostat)

-4,4

-16,0

1,8 3,6 2,1

-3,1

-8,7

12,8

18,218,1

13,2

-1,0

-20

-10

0

10

20

2005 2006 2007 2008 2009 2010F

%,

p.a.

gro

wth

EU27 Russia

-3,2 -7,3-10,7 -8,8 -9 -6,4 -7,6

9,53,8

-19,3-10,7

-8,1

-0,1

-17,2-19,3

-30

-20

-10

0

10

20

Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 Q2-10

%, Q

oQ g

row

th

EU27 - total Russia - total EU27 - building Russia - building



6

CONSTRUCTION MATERIALS – TOTAL: production index

PRICE INDEX

-23,5

-11,1

-35

-25

-15

-5

М1-

09

М2-

09

М3-

09

М4-

09

М5-

09

М6-

09

М7-

09

М8-

09

М9-

09

М10

-09

М11

-09

М12

-09

Russia EU-27

CONSTRUCTION MATERIALSCONSTRUCTION MATERIALS: PRODUCTION and PRICES: PRODUCTION and PRICES

Percentage change compared with the same month of the previous year, 2005=100%, work. day adj.,

(sources: Rosstat, Eurostat)

Changes of end-of-period index, 2005=100%, versus prior period , producer price (source: Rosstat)

%

38,2

22,0

50,454,332,0

54,461,2

56,0

48,9

0

20

40

60

80

2005 2006 2007 2008 2009

inflation rate construction construction materials

55,843,4

18,0

67,3

108,9

64,1

35,219,0

64,758,5

27,720,0

0

30

60

90

120

2006 2007 2008 2009

reinforced and precast concrete productscementrolls roofing&waterproofing materials

48,961,2

19,0

56,0

all constructionmaterials


5,89,7

-1,3

-20,0-25

-15

-5

5

2006 2007 2008 2009

%, p.

a.gr

owth


7

ROOFING AND WATERPROOFING MATERIALS: PRODUCTIONROOFING AND WATERPROOFING MATERIALS: PRODUCTION

ANNUAL OUTPUT

Percentage change compared to the previous year, exclud. underlayment felts (sources: Rosstat, Russian Union of Industrialists and Entrepreneurs,

NTC”Gidrol-Krovlja”)

QUARTERLY OUTPUT

Percentage change compared with the same quarter of the previous year, exclud. underlayment felts (source: Rosstat)

In 2009:

output of waterproofing materials declined dramatically by about 20%

the number of enterprises decreased by a third

capacity utilization rate fell by 17%

27,1

11,125,0

61,8

40,6

9,4

-18,5

-69,8

18,3

-32,6-11,7-12,4

-24,1

26,4

-90

-60

-30

0

30

60

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2

2007 2008 2009 2010

%,

QoQ

gro

wth

AVERAGE PERCENT UTILIZATION OF CAPACITY

43,9% 46,7%51,8%

57,8%

40,2%

0%

20%

40%

60%

80%

2005 2006 2007 2008 2009


0

5

10

15

20

25

30

2006 2007 2008 2009

%,

p.a.

grow

th

0

20

40

60

80

%,

chan

ge in

the

inde

x

producer price, YoY consumer price, YoY

producer price index consumer price index

inflation rate

50,4

21,9

65,6


8

ROOFING AND WATERPROOFING MATERIALS: ROOFING AND WATERPROOFING MATERIALS: PRICESPRICES

PRODUCER PRICE INDEX for the different price brackets

10,1

8,0

24,1

0

5

10

15

20

25

M7-09 M9-09 M2-10 M4-09 M6-10

high high-mid low-mid low

24,3

PRODUCER and CONSUMER PRICES INDEX

Percentage changes of end-of-period index and growth compared with prior year, 2005=100%, (source: Rosstat)

Percentage changes of end-of-period index, June 2009=100%, (source: Rosstat)


EU-27 28%

Moldova 5%

the Central

Asian countries

8%

others 1%

Kazakhstan

37%

Ukraine 9%

Mongolia 5%

the

Transcaucasian

countries 7%

Poland

22%

Sweden

11%

Slovakia

4%others

5%

Bulgaria

9%Finland

10%

the Baltic

countries

39%


9

EXPORTSEXPORTS

In 2009:

• export volume amounted to 58,6

mln.sq.m• compared with 2007, it declined by

almost 20%• the materials were mainly exported to

the former Soviet republics (67% of

exports)

Share of exports,%(source: Rosstat)



10

IMPORTSIMPORTS

In 2009:

• imports total amounted to 4,9 mln sq.m (1,2% of domestic consumption)

• compared with 2007, imports declined by 40%

• share of single ply membranes in imports exceeded 75%

• the main supplier of bituminous materials was Finland, polymer materials – Germany and Switzerland

0,370,020,110,16

0,51 0,120,340,38

0,85

1,99

0,0

0,5

1,0

1,5

2,0

Ger

man

y

Swit

zerlan

d

Finl

and

Nor

way

Chin

a

Ital

y

Fran

ce

othe

rs

mln

.sq.

m

bituminous polymer membranes



11

in mln. sq.m 2005 2006 2007 2008 2009

production 494 523 574 567 454

exports 57,1 65,2 73,2 69,0 58,6

imports 11,1 8,6 12,0 11,3 4,9

apparent domestic consumption

448 467 513 509 400

CHANGE OF MARKET FOR ROLL ROOFING AND WATERPROOFING MATERIALS in RUSSIA in 2005-2009 (excl. underlayment films)

MARKET SIZEMARKET SIZE

CHANGE OF APPARENT DOMESTIC CONSUMPTION

4,1%9,9%

-0,7%

-21,5%

-30%

-20%

-10%

0%

10%

20%

2006 2007 2008 2009

%, p

.a.g

row

th

10 5 10 9

6555

63 66

19

21182015

7810

0%

20%

40%

60%

80%

100%

2007 2008 Q1-Q2

2009

Q3-Q4

2009

high

high-mid

low-mid

low

CHANGE IN PRICE BRACKETS STRUCTURE

Shares of the different price brackets (in production; exclud. underlayment felts & organic felts

for BUR)

Percentage change compared to the previous year (exclud. underlayment felts)


7,3

10,7 10,5

6,2 6,5 6,87,8

0,0

2,0

4,0

6,0

8,0

10,0

12,0

2006 2007 2008 2009 2010F 2011F 2012F

mln

.sq.m


12

SINGLE PLY POLYMER MEMBRANES MARKETSINGLE PLY POLYMER MEMBRANES MARKET

DOMESTIC CONSUMPTION

DOMESTIC PRODUCTION (mln.sq.m) and SHARE OF IMPORTS (%)

0,10,5

2,9

0,2

98,0% 98,2% 95,5%

54,0%

2006 2007 2008 2009

domestic production share of imports

CONSUMPTION OF MATERIALS BY POLYMER TYPES (2009)

8%2%

89%

1%

TPO EPDM PVC others


454

510538

556584

400450 471 482 503

300

400

500

600

2009 2010 2011 2012 2013

production apparent domestic consumption

CORRECTED FORECAST


13

Growth, % YoY 2009 2010 2011 2012 2013

Annual average oil "Urals" price, USD/barr.

61,1 75 75 78 79

GDP growth 92,1 104103,4(104,2

)

103,5(103,9

)

104,2 (104,5

)

Industry production 89,2

102,7(107,6

)

103,2(103,9

)

103,1(103,8

)

104,2(104,9

)

Capital invesments 83,8

102,9(102,5

)

108,8(110,1

)

106,3(103,5

)

108,1(107,4

)

Real wages 97,2 103,6 102,5 102,4 103,1

GOVERNMENT’S SCENARIO FOR THE RUSSIAN ECONOMY DEVELOPMENT FOR 2010-2013

(Ministry of economy development, June 2010)

PRODUCTION AND COMPSUNTION OF WATERPROOFING MATERIALS (in

mln.sq.m)INITIAL FORECAST

558508

486465454

300

400

500

600

2009 2010 2011 2012 2013

400 405 419 434478

The values in parentheses are the corrected forecast made in September, 2010



14

Thank you for the attention

ntc “gidrol-krovlja” ©, moscow, russia, 2008 the russian market for roofing and waterproofing...

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