Displaying items by tag: Belarus

The second quarter of 2025 saw Russian GDP growth slow to 1.1% year-on-year, with a revised full-year growth forecast of 0.9%.¹ An economy bulked up on injections of military spending (budgeted at 33% of GDP in 2025)² since the invasion of Ukraine may slowly be keeling over. Faced with this eventuality, the Russian cement industry will likely be reviewing strategies not to be dragged down with the rest of the economy.

Prior to the release of the latest economic data, Russian construction had been forecast to grow at a CAGR of 2.5% in 2026 – 2029. Drivers included anticipated investments in oil and gas, transport, airports and renewable energy.

Purely in cement terms, the data no longer appear to corroborate this outlook. Market leader Cemros expects total domestic demand to drop from 67Mt in 2024, by 10 – 15% year-on-year, to 57 – 60.3Mt in 2025. In the first half of the year, Russia consumed 28.4Mt of cement, just 4% above production volumes of 27.2Mt in the same period. Cemros cited ‘declining cement consumption’ to account for its upcoming instigation of a four-day working week at its plants across Russia from October 2025.

On 12 August 2025, Cemros spoke out about a threat to the interests of the domestic industry: increased imports from Belarus. It said that Belarus’ three-plant industry is supplying Russia with cement at a rate equivalent to the combined production volumes of two-to-three cement plants. Time to cap them, it told the government, suggesting a ceiling of 1.5Mt/yr.
The producer may have received a shock on 18 August 2025, when Belarus-based Krasnoselskstroymaterialy announced an upcoming US$100m upgrade to its 700,000t/yr Vaŭkavysk cement plant in Grobno Oblast, Belarus.

By that time, the Russian cement association, Soyuzcement, had already called for an anti-dumping investigation into all cement imports. It expects that import volumes of 3.74Mt in 2024 may rise to 5Mt/yr ‘in the near-term future.’

Lingering behind these discussions is the fact of high operating costs, partly precipitated by Russia’s continuing burden of international sanctions.

Here, the cement sector’s hopes are riding on a very particular marketing campaign: that of President Vladimir Putin on the global diplomatic circuit. He must sell his war (or peace on his terms) in a way that fends off increased international sanctions or support for Ukraine. Existing sanctions were on show at the Alaska Summit in Anchorage, US, on 15 August 2025, where the Russian leader made his pitch to US President Donald Trump – including a request for de-sanctioning, alongside various proposed punishment measures against Ukraine. Before travelling back to Moscow, the Russian delegation reportedly had to offer to pay cash for aeroplane fuel.³

Though President Trump did not secure a ceasefire, he nonetheless held back from making good on threatened new sanctions, and rated the Alaska Summit ‘10/10.’⁴ Putin might be equally pleased with the inconclusive outcome as precisely the goal of all his obfuscations. For Russia’s cement producers, costs won’t suddenly rise, but nor will they come down any time soon.

Far from sitting idly by, the industry is seeking new ways to actualise the value of its product. On 20 August 2025, Soyuzcement hosted a meeting of nine producers and four retail chains to strategise ways to increase sales of bagged cement. It will be subject to mandatory digital labelling from 1 October 2025. Discussions included the possibility of batch labelling of bags on the pallet for ease of scanning at retail outlets.

For now, producers’ online media spaces give the impression of work continuing as usual. On 18 August 2025, Cemros announced a US$186,000 renovation of buildings at its Mikhailovsk building materials plant in Volgograd Oblast.

The cement business in Russia is big, established and diffuse. Transformation has been its defining feature in the 33 years since the fall of the USSR, including in the relatively stable latter decades of that period. Should macroeconomic or geopolitical events overtake it once again, we can expect some shapeshifting – but also survival.

References

1. Reuters, ‘Russia's GDP growth slows to 1.1% in Q2, says Rosstat,’ 13 August 2025, www.reuters.com/markets/europe/russias-gdp-growth-slows-11-q2-says-rosstat-2025-08-13/

2. Global Data, ‘Russia Construction Market Size,’ 30 June 2025, www.globaldata.com/store/report/russia-construction-market-analysis/

3. Spiegel, ‘Russen boten Rubio zufolge Barzahlung für Betankung ihrer Flugzeuge an,’ 18 August 2025, www.spiegel.de/wirtschaft/trump-putin-gipfel-russen-boten-offensichtlich-barzahlung-fuer-betankung-ihrer-flugzeuge-an-a-fdd9303c-546a-43aa-89dd-4f746b8e9df3

4. Focus, ‘Jäger deutlich: "Putin verkauft Trump eine Illusion - und hat ihn jetzt in der Hand",’ 16 August 2025, www.focus.de/politik/ausland/jaeger-putin-braucht-trump-nicht-zu-fuerchten-er-hat-trump-jetzt-in-der-hand_67785013-a14b-485c-9a4a-51755ec483fa.html

Belarus: Krasnoselskstroymaterialy is preparing a US$100m modernisation project at one of its cement plants and is seeking investment from Chinese companies. CEO Alexander Golda said “A large cement plant modernisation project is currently at its pre-investment stage. We are actively working with Chinese partners, and representatives of several large companies have already visited us with proposals.” He added that work will continue through 2025 ‘and the following years’ before a final decision is made.

The company reduced its net loss by 45% year-on-year to US$9.50m in 2024, while sales grew by 21% to US$139m.

Russia: Cemros has proposed limiting Belarusian cement imports to 1.5Mt/yr, citing rising import volumes from Belarus, Iran and Kazakhstan, despite a stagnant market. The company said current imports are equal to the annual output of 2-3 cement plants, while underutilised Russian producers are reducing working hours and halting production.

The Cemros press service said “In the short term, a fair solution would be to fix cement import volumes at the levels seen before the introduction of preferential mortgages, namely a ceiling of 1.5Mt/yr of cement products.”

This comes after Cemros announcing on 8 August 2025 the implementation of a four-day working week from 1 October 2025, due to falling demand and increasing imports. On the same day, industry association Soyuzcement proposed introducing five-year anti-dumping measures, noting Belarus accounts for 69% of imports, Iran 20% and Kazakhstan 9%.

Cemros forecasts that 2025 cement consumption could fall by 10–15% year-on-year in 2025 to 57–60.3Mt. In January–June 2025, Russia produced 27.2Mt of cement and consumed 28.4Mt, including 1.83Mt of imports. Soyuzcement predicts that imports could reach up to 5Mt/yr in the medium term, up from 3.74Mt in 2024.

Poland: The Internal Affairs Ministry has announced sanctions on the Belarusian Cement Company (BCC). The Belarus-based company has been added to the List of Persons and Enterprises Subject to Sanctions, according to Interfax. The authorities will freeze funds connected to the company and exclude it from public procurement or tenders amongst other measures.

The government has taken this action as it believes that funds generated by BCC indirectly support serious human rights violations, repression against civil society and the democratic opposition, and its activities pose a serious threat to democracy or the rule of law in Belarus. It has also associated the company with actions that destabilise or undermine the territorial integrity, sovereignty and independence of Ukraine.

The ministry said that BCC was a ‘significant’ supplier of cement to Poland in 2021 – 2022 but that these exports decreased significantly after Russia’s invasion of Ukraine. However, it noted that that activities by the company outside of Belarus have grown since 2023 with the opening of a new subsidiary in Russia, BCK-Union Trading House, and mounting exports.

BCC has also been on the US sanctions list since late 2023. The EU imposed sanctions against cement industry as a whole in Belarus in mid-2022.

Cement consumption data for the first half of 2025 from Russia has been released this week and it is down from 2024. Added to this, Cemros announced earlier in July 2025 that it is preparing to suspend production at its Belgorod cement plant. What can these and other news stories tell us about the state of the Russian cement sector at present?

Graph 1: Cement consumption in Russia, 2019 - H1 2025. Source: Soyuzcement.

Figures from Soyuzcement, the Union of Cement Producers, in the local press reports that consumption fell by 8.6% year-on-year to 27.2Mt in the first half of 2025 from 28.4Mt in the same period in 2024. By region the largest declines were noted in the south (-14%), the Urals (-13%) and in Siberia (-11%). Producer Sibcem released some production data for the first half, also this week, and this reflected the national picture, with a 9% fall.

The national situation has been blamed on a suspension of infrastructure projects, a fall in the domestic building sector and mounting imports. Imports rose by 5.8% to 1.9Mt. Notably those trade flows have been coming in from other countries with restricted access to international markets such as Belarus and Iran. A China-based company Jinyu Jidong Cement in the far-eastern Heilongjiang Province also started exporting cement to Russia in July 2025. Unusually though, for these kinds of stories, exports from Russia have also risen. They grew by 9% to 0.5Mt, mainly to Kazakhstan. The general picture fits with Soyuzcement’s updated forecast for the local market from 2025 to 2027. It expects a decline of 6 - 12% in 2025 as a whole, followed by a change of -6% to +1% in 2026 and then the start of a recovery in 2027 under most scenarios.

One reaction to the shrinking market became apparent earlier in July 2025 when Cemros said it was preparing to suspend production at its Belgorod cement plant. The company plans to use the stoppage to assess the market, reduce its operating costs and consider market diversification options. It blamed the decision on a decrease in demand in the domestic market in Russia along with lower profits and higher imports. Back in May 2025, Cemros, the leading Russia-based cement producer, said that it had 18 plants, a total production capacity of 33Mt/yr and a 31% share of the local market. It also reported that it had two mothballed plants: the Savinsky cement plant in Arkhangelsk and the Zhigulovskiye plant in the Samara region. Although, to be fair to Cemros, up until fairly recently it had been spending money on its plants. It resumed clinker production in mid-2024 when it restarted one production line at its Ulyanovsk plant in mid-2024. Then in May 2025 it said it was getting ready to restart the second line at the site too as part of a €8m renovation project. Once back online the unit will have a total production capacity of 0.8Mt/yr. Another recent plant project by Cemros was the upgrade of a kiln at Katavsky Cement that was completed in June 2025. Elsewhere, Kavkazcement was reportedly planning to invest US$224m on equipment upgrades in April 2025 in response to a large rise in production costs in 2024.

The larger problem facing the Russian construction industry and the building material producers that supply it is the ongoing economic fallout from the war in Ukraine. The head of the country’s national bank said at the start of July 2025 that the nation had broadly adapted to economic sanctions and that inflation was slowing down. Growing cement demand since 2021 broadly supports this view. Yet, governor Elvira Nabiullina warned of further market turmoil ahead due to a slowing economy and high labour costs. This spells uncertainty for the cement sector as underlined by Soyuzcement’s gloomy forecasts for 2025 and 2026. In this kind of environment market mergers and acquisitions seem likely but international sanctions may limit the options. One general remedy the government has been advocating for has been the formation of a common commodities exchange for the Eurasian Economic Union that was suggested in late 2024. However, Soyuzcement has been lobbying against the proposal on the grounds of price volatility, increased competition and a reluctance by producers to join it. The cement sector in Russia faces challenging times ahead.

Ukraine: The Interdepartmental Commission on International Trade has extended anti-dumping duties on cement from Russia, Belarus and Moldova until 2030, according to Ukrainian News. The duties stand at 115% for Russian cement, 94% for Moldovan cement and 57% for Belarusian cement, following a review of measures first imposed in 2019.

Belarus: Belarusian Cement enterprises produced 5.34Mt of cement in 2024, up by 7% year-on-year, with shipments rising by 10% and total sales to domestic and foreign markets by 6.5%.

The holding company’s three plants, OJSC Krasnoselskstroymaterialy, Belarusian Cement Plant and OJSC Krichevcementnoshifer, accounted for 86.5% of domestic cement sales in the first quarter of 2025. The group also exports to Russia, supplying up to 10% of demand in the Central and Northwestern Federal Districts. It plans to increase market share further by modernising its production lines.

Belarus: Belarusian Cement Plant made a net loss of US$13.8m in 2024, according to the company’s annual report. This was a 13% increase in its loss compared to 2023. The company’s revenues reached US$163m, an 18% year-on-year rise. The company is over 99% state-owned.

Belarus/Russia: Belarusian Cement Company has reached an agreement with the Republic of Khakassia for the delivery of regular coal shipments for its cement plants. The new agreement will ensure the weekly transport of approximately four trains loaded with coal from November 2024 - January 2025, meeting 100% of the demand of the Belarusian plants.

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.”