Displaying items by tag: Krasnoselskstroymaterialy

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.

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: 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: Krasnoselskstroymaterialy has announced that its US$7.8m refuse-derived fuel (RDF) plant at its 1.6Mt/yr Krasnoselskstroymaterialy plant will be completed in September 2020. The plant is installed with equipment worth US$4.5m from Czech suppliers. The Ministry of Construction and Architecture has said that waste from the Grodno Recycling and Mechanical Sorting Plant will replace Belarusian peat and Russian coal as the cement fuel in the plant’s kilns, fulfilling Krasnoselskstroymaterialy’s goals of renewability and national self-reliance.

Ministry of Construction and Architecture energy conservation head Sergey Nikitin said, “The transition to RDF will create an opportunity to reduce the cost of cement production in the future, strengthen the financial and economic situation of the Krasnoselskstroymaterialy enterprise and create additional competitive advantages over producers operating on traditional fossil fuels.”

Poland: Belarusian Cement Company (BCC) says that it has responded to ‘increased demand for Belarusian cement in Central Europe in 2019’ by opening an office in Warsaw, Poland. Belarus Daily News has reported that one purported aim of the office is to court supply contracts with ‘European, Polish, German and other partners.’

Both Krichevtsementnoshifer and Krasnoselskstrojmaterialy, the remaining two of Belarus’s three cement producers, have reportedly concluded preliminary agreements for export of their cement to Poland in 2020.

Belarus: The Council of Ministers has received a recommendation from the State Control Commission (SCC) that punitive measures be taken against officials responsible for cement production in the midst of another disappointing year. Belapan has reported that members of the SCC blamed the failure to secure efficient performance on untenable costs due to intermediaries. Investigators from the SCC’s Financial Investigations Department (FID) found that Russian intermediaries were selling cement produced in Belarus to Belarusian state-owned companies at a marked-up price. A total of 13 criminal cases have been opened in connection with the findings, including one against an executive of a Belarusian cement company.

In 2013, Belarus completed the modernisation of its three state-owned cement producers, Belarusian Cement, Krasnoselsktroymaterialy and Krichevcementnoshifer to a total capacity of 2.3Mt/yr, at a cost of US$1.1bn. In 2018, the companies missed eight of their 10 key performance targets. Besides cost reduction, capacity utilisation and labour productivity targets were not met.

Elsewhere, Krasnoselsktroymaterialy has tendered for the supply of gas cleaning equipment, including the replacement of bag filters at two of the mills in its grinding facility.

Belarus: The government is in talks with Ireland’s CRH to sell Krasnoselskstroymaterialy. Anatoly Kalinin, the Deputy Prime Minister of Belarus, told the Belarusian Telegraph Agency that the government wants US$200 for the state-owned cement producer but that CRH wants to pay less or buy a share of the business. Negotiations are on going.