Cement producers look to export their way into firmer future

An expected 15% slump in Russian residential housing is expected to continue to make life tough for Russia’s cement producers over the coming year.

They are looking to boost exports to ward off overproduction, and for the removal of export tariffs which were introduced during the boom years.

RT spoke with Eurocement group president Mikhail Skorohod about how the sector is looking to respond and how the government can support the industry’s aims

MS: " We expect to see investments from the government guaranteed by the budget. Then we will be able to have, on every rouble of government investment, up to 5 to 6 roubles of investors money. The main task for the government is to make investment horizons in Russia extend to at least 10-15 or even 20 years. It means that for any investor – domestic or foreign – Russia's inflation and exchange rate policy should be absolutely clear."

RT: How important is it for the cement sector to increase exports?

MS: "Currently Azerbaijan, Kazakhstan Ukraine are the main markets for Russian cement producers. We are aiming at new markets – Finland, Hungary, Romania – but those are countries with a 6% export duty. We could increase exports if customs were opened. It could increase exports from 1.3 million tonnes – 2009 levels – up to 3 or 4 million – enough to fully load two large Russian plants. Our proposals are currently in the customs and tariff regulation and we expect a decision to be made in the 1st quarter of 2010."

RT: Investment into the sector is focusing on modernizing production. How is this likely to change the production mix?

MS: "Our aim is to introduce more effective production technology and reduce plant expenses. We are aiming at 80% of production from power efficient production – which is dry production – and retaining about 20% the traditional wet way."