Displaying items by tag: Belarus

Russia: Belarusian Cement Company (BCC) increased its cement supplies to the Russian Federation by 3.5% year-on-year in the first half of 2024, and by 50% in June 2024, reports Belta News. Major sales markets for BCC in Russia include Moscow, Moscow Oblast, the Central Federal District and the North-Western Federal District.

Vyacheslav Golovatsky, deputy director general for foreign economic activities, credited the growth in foreign cement sales to logistics. He said “We did a lot of work in 2023. We created a commodity distribution network, BCC-Soyuz, which has its own cement transshipment facilities. When there were difficulties with cement delivery in late 2023 – early 2024, logistics came into play. We started routing deliveries, launching our own trains that consisted of our own cars. In March 2024, our first route train went to Russia, in May 2024 we had already 12 BCC route trains, and in June 2024 - 15. Our products have been delivered to transshipment facilities, unloaded and distributed to consumers more promptly.”

Belarus: Belarus Cement Group (BCG) will export 67,000t of cement to Russia by rail in May 2024, using its own train, which will complete 18 runs. So far, the BCG train has completed 9 runs to the Central Federal District of Russia, delivering 37,000t of cement.

The Ministry of Architecture and Construction of Belarus said "This month, the BCG has launched a fixed-route train of its own hopper wagons to deliver cement to Russia. The first train was dispatched from the Belarusian cement plant (Kostyukovichi, Mogilev Oblast) to Moscow Oblast.”

Before Russia invaded mainland Ukraine on 24 February 2023, many predicted that full-scale conflict would be averted. When the attack began, Russian President Vladimir Putin himself expected a 10-day war, according to think tank RUSI. 15 May 2024 marks two years, two months and three weeks of fighting, with no end in sight.

Ukrcement, the Ukrainian cement association, recently published its cement market data for 2023, the first full year of the war. The data showed domestic cement consumption of 5.4Mt, up by 17% year-on-year from 4.6Mt in 2022, but down by 49% from pre-war levels of 10.6Mt in 2021. In 2023, Ukraine’s 14.8Mt/yr production capacity was 2.7 times greater than its consumption, compared to 1.4 times in 2021. Of Ukraine’s nine cement plants, one (the 1.8Mt/yr Amwrossijiwka plant in Donetsk Oblast) now lies behind Russian lines. Four others sit within 300km of the front line in Eastern and Southern Ukraine. Among these, the 4.4Mt/yr Balakliia plant in Kharkiv Oblast, the largest in the country, first fell to the Russians, but was subsequently liberated in September 2022.

Before the war, Ukrcement’s members held a 95% share in the local cement market. Their only competitors were Turkish cement exporters across the Black Sea, after the Ukrainian Interdepartmental Commission on International Trade successfully implemented anti-dumping duties against cement from Moldova and now-sanctioned Belarus and Russia in 2019. Since then, Turkish cement has also become subject to tariffs of 33 – 51% upon entry into Ukraine, until September 2026. The relative shortfall in consumption has led Ukraine’s cement producers to lean on their own export markets. They increased their exports by 33% year-on-year to 1.24Mt in 2023, 330,000t (27%) of it to neighbouring Poland.

Russia’s invasion has made 3.5m Ukrainians homeless and put the homes of 2.4m more in need of repair. In a report published in Ukrainian, the US Agency for International Development (USAID) set out its three-year rebuilding plan for the country. USAID projects an investment cost of €451bn, with the ‘main task’ besides homebuilding being to increase the share of industrial production in the economy. Ukraine is 90% equipped to produce all building materials required under the plan. Their production, in turn, will create or maintain 100,000 jobs and US$6.5bn in tax revenues. Reconstruction will also involve the Ukrainian cement industry returning to close to full capacity utilisation, producing 15 – 16Mt/yr of cement.

CRH, an established local player of 25 years, looks best set to claim a share of the proceeds. Stepping down an order of magnitude from billions to millions, Global Cement recently reported CRH’s total investments in Ukraine to date as €465m. Since war broke out, the company has more than tripled its rate of investment, to €74.5m. The Ireland-based group is in the protracted administrative process of acquiring the Ukrainian business of Italy-based Buzzi. If successful, the deal will raise its Ukrainian capacity by 56%, to 8.4Mt/yr – 57% of national capacity. This unusual clumping of ownership may be made possible by the participation of European Bank for Reconstruction and Development in partly acquiring the assets, as per a mandate letter signed with CRH in 2023.

Leading Ukrainian cement buyer Kovalska Industrial-Construction Group bemoaned the anticipated increase in market concentration. On the one hand, this sounds like a classic tiff between cement producers and users with shallow pockets. On the other hand, an antebellum allegation of cement industry cartelisation should give us pause for thought. Non-governmental organisation The Antitrust League previously reported Ukraine’s four cement producers to the government’s Anti-Monopoly Committee for alleged anticompetitive behavior. This was in September 2021, when Ukraine was barely out of lockdown, let alone up in arms. With all that has happened since, it may seem almost ancient history, yet the players are the same, CRH and Buzzi among them.

Ukrcement and its members have secured favourable protections from the Trade Commission, and, for whatever reasons, evaded the inconvenience of investigation by the Anti-Monopoly Committee – a state of affairs over which the Antitrust League called the committee ‘very weak.’ The league says that producers previously raised prices by 35 – 50% in the three years up to 2021. In planning a fair and equitable reconstruction, Ukrainians might reasonably seek assurance that this will not happen again.

All these discussions are subject to a time-based uncertainty: the end of the war in Ukraine. A second question is where the finances might come from. The EU approved funding for €17bn in grants and €33bn in loans for Ukraine on 14 May 2024. Meanwhile, countries including the UK have enacted legislation to ensure Russia settles the cost of the conflict at war’s end. If Ukraine achieves its military aims, then the finances may flow from the same direction as did the armaments that demolished Ukrainian infrastructure in the first place.

The first piece of Ukraine annexed by Russia was Crimea in February 2014, making the invasion over a decade old. Against such a weight of tragedy, the country cannot lose sight of the coming restoration work, and of the need to ensure that it best serve Ukrainians.

Belarus: Despite revenue increases for two of its three major cement companies, the cement industry in Belarus recorded net losses in 2023. According to Business World Magazine Ukraine, Krychaucementnashyfer saw a 9.3% rise compared to the previous year, while Krasnaselskstroymateryjaly experienced a 5.6% year-on-year rise in revenue. Conversely, Belarusian Cement Plant's revenue declined by 2.9%. Overall, the sector's losses totalled nearly US$64.2m, representing a year-on-year increase of 50%.

Krychaucementnashyfer's losses escalated nearly fourfold to US$36.9m, while Krasnaselskstroymateryjaly's losses doubled to US$16.9m. However, Belarusian Cement Plant managed to reduce its net loss by 16%, resulting in a loss of US$10.5m.

Belarus: The US government sanctioned the management company of Belarusian Cement Company on 6 December 2023. PrimePress News has reported that 10 other Belarus-based companies and eight individuals were also added to the US sanctions list. This is the latest group of additions since the US and its allies began sanctioning Belarusian entities in connection to election rigging, human rights abuses and complicity in the on-going Russian invasion of Ukraine.

Belarus: Belarusian Cement Plant produced 940,000t of cement during the first half of 2023. The figure corresponds to a year-on-year rise of 3.1%. The Respublika newspaper has reported that the company more than doubled its exports of cement to 719,000t – 76% of its production. Russia was the main destination for the producer’s cement exports. Belarusian Cement Plant recorded a capacity utilisation rate of 94% throughout the six-month period.

Lithuania: Akmenes Cementas has benefitted from a European Union (EU) ban on cement exports from Belarus in response to the Russian-led invasion of Ukraine in 2022. The subsidiary of Germany-based Schwenk Zement reported a profit of Euro16m in 2022, according to the Baltic News Service. This is its first recorded profit since 2013. Artūras Zaremba, the head of Akmenes Cementas, added that higher cement prices, further borrowing from its parent company and fixed electricity prices also helped it make a profit.

The company’s income grew by 53% year-on-year to Euro134m in 2022 from Euro87.5m in 2021. Its cement sales volumes increased by 6% to 1.5Mt and cement production rose by 8% to 1.1Mt. Around 1.1Mt of cement was sold domestically with the remainder exported to other countries within the EU. Cement sales are expected to fall in 2023 due to changes in the local market.

Belarus: The Belarusian government has granted reimbursement of cement producers’ interest payments on loans from state-owned Belarusbank and Belarus Development Bank. PrimePress News has reported that banks will fund the payments from the 2023 national budget.

Belarusian Cement Plant will receive US$47.1m-worth of reimbursement for interest payments on three loans from Belarusbank worth US$42.8m, granted between 2009 and 2011. Krichevtsementnoshifer will receive reimbursement of US$137m on two loans from Belarusbank worth US$116m, granted in 2012. Krasnoselskstroymaterialy will receive reimbursement of US$1.1m on a loan worth US$211,000 from Belarus Development Bank. Additionally, it will receive reimbursement of US$72.1m for five loans worth US$34.9m from Belarusbank in 2009 – 2012.

Belarus: The government has extended Belarusian Cement Company's exemption from paying customs duties and value added tax (VAT) on its goods imports until 31 December 2023. PrimePress News has reported that the cement producer had previously been exempt from payments up until 30 September 2022.

Belarus/Russia: Exports of cement from Belarus to Russia increased by 61% to 0.43Mt in September and October 2022 compared to the same period in 2021. Eurocement has also warned that Russia’s total imports could rise to 2.2Mt in 2022, comprising 1.5Mt from Belarus, according to RIA. The Russia-based cement producer forecast that total imports could rise to 5Mt in 2023, split mainly between imports from Belarus and Iran. Eurocement noted that it had encountered problems with rising imports already in 2022.