Sibirsky Cement expands to beat costs

Russia is facing a huge cement deficit with prices having soared four times in less than a decade. Russia’s leading producer Sibirsky Cement, though, has found a way to drive down prices.

To overcome high transportation costs, the company has bought a subsidiary in Turkey.

“We will sustain our market share which is slightly more than 7% in Turkey. The market is growing and the excess cement will definitely be shipped to Russia,” Andrey Muravyov says.

To date Russia produces about 60 million tonnes of cement a year, which is 17 times less than China.

And its price is two hundred dollars a tonne – one of the highest in the world.

Profitability in the cement industry is extremely high.

“There is no competition right now, and it will most likely continue for the next five years because the deficit will be growing much faster than new capacities will be coming to the market,” explains Andrey Muravyov, Sibirsky Cement President.