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Slowdown in residential construction hits Siberskiy

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World Cement,

Weaker cement demand in Siberia has hit Siberskiy Cement’s 1H17 performance. According to a company statement, its three cement plants producers 1.4 million t of cement – a drop of 11% on the same period in 2016. Overall cement demand in the Siberian Federal District fell 10% as economic activity slowed.

The largest production drop was seen at Siberskiy’s Topkinsky Cement in the Kemerova Region. Production was down 15% at 0.93 million t of cement. In addition to weaker Russian demand for cement, Topkinsky was also hit by a fall in exports to Kazakhstan, a result of a strengthening of the rouble against the tenge.

At Krasnoyarsk Cement, production was down 7% at 0.3 million t, while at Timliuyskiy cement, production bucked the trend, rising 21% to 0.14 million t on the back of demand from the Baikal Airport reconstruction project in Ulan-Ude.

Siberian housing construction – which accounts for around 70% of cement demand in the region – is slowing: according to the Federal State Statistics Service, in 1Q17 1.3 million m2 of housing was completed, a 17.9% fall on the previous year.

This fall in residential construction has more than offset the positive impact of infrastructure projects, such as the Baikal Airport reconstruction, said Gennady Rasskazov, First Vice President of Siberskiy Cement. According to Rasskazov, the company expects the Siberian cement market to contract by 8 – 10% by the end of the year.

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