Business Emirates # 13 (March - April 2007) - page 127

ASHARP
Turn
EAST–WEST
Changeof export focusofUkrainianplants
becamean important eventof thepast year. See
for yourself: in2005, Ukrainiancementproducers
exported508.86 tonsof cement toCIScountries,
which represented38.2%of theoverall export. In
2006, theyexported707.4 tonsof the“graymatter”
there,whichequaled59.3% in theexport structure.
According to someexperts, themain reason
for changeof export salesdirectionwas the
introductionof European standards in some
EasternEuropeancountries (Hungary, Romania
andPoland),whichused to importUkrainian
cement. EuropeanUnioncountriesbanned the
useof cement containinghexavalent chrome
causingallergies in theeventofdirect contact
with skin.TatyanaRadenko, HeadofAnalytical
ResearchDepartmentof KharkivStateEnterprise
SEPROCEM states that“hexavalent chromeappears
periodically in thecompositionofUkrainiancement
due to theuseof chrome-magnesite refractory
used in the sintering furnacesanddue to the raw
materialsused in theprocess. However, presence
of hexavalent chrome inUkrainiancement isnot
avery serious issue.Thiscomponent couldbe
removedby so-calledchrome-removers (ferrous
iron)destroying thehexavalent chromeand turning
it into“harmless”trivalent chrome”.
In turn, exportersstate that the issueof
hexavalentchrome is farfetched.QualityofUkrainian
cementhasbeenconfirmedby international and
Europeanqualitycertificates.Also, someenterprises
(e.g. Balcem, Inc.) alreadyhave installedhexavalent
chromeneutralizers.Therefore, themain reason
forchangeofexport focuswasnot the increased
standardappliedbyEuropeanUnionbut rather
theeconomicsituationshapingonCISmarketand
primarily theconstructionboomcausingcement
deficit.GennadiyDonets, directorofEurocement
GroupUkraine, Inc. (Kyiv,productionandsaleof
cement; thegroup includes twocementplants
andmore than3 thousandemployees, since
2005)explains:“Cementexport focusofUkrainian
enterprisesofBalcemCorporation (Balakleya,
Kharkiv region) andPushkaKramatorskCement
MARKETPASSPORT
MERCHANDISESOLDONTHE
MARKET:
CEMENT
Numberofmarket subjects:
14manufacturers
Productionvolume in2006:
13.68million tons
Productionvolume in2005:
12.14million tons
Salesvolume in2006:
12.12–12.14million tons, $800-850
million in retail prices
Salesvolume in2006:
10.9million tons, $640-660million in
retail prices
Export in2006 (10months):
1.33million tonsor$54million (invoice)
Import in2005 (10months):
0.08milliontonsor$60.7million (invoice)
Export in2005:
1.48milliontonsor$60.3million (invoice)
Import in2005:
0.2million tonsor$7.87million (invoice)
Sales structure in2006
(inmonetaryequivalent):
national products –more than98%
Importedproducts – less than2%
Plant (Donetsk region)dependedon theeconomic
situation thatwasshapedon themarketsof certain
countriesandon themarketprospects. Inparticular,
the increaseof cement supply toRussianmarket
in2006,wasdue to the fact thatprices inRussia
increasedby1.5 timesandexceededEastEurope
prices. For instance, one tonofpackedM400
cementby theendof theyearcost$170-180. Similar
situationwasobservedon themarketsofAzerbaijan,
Kazakhstan, BelarusandotherCIScountries. In
Azerbaijan, thepriceofpackedM400cementeven
exceeded$200per ton.At thesame time, theprices
of thiscementgrade inEuropeequaled$110-140.”
At the same time, exporters claim that the
shift of focus towardsCIScountriesdidnot
affect supply toeast Europe: Ukrainiancement
producers fulfilledall their obligations.
GRAYFUTURE
Continuousgrowthofdemand for cement
on the internalmarket togetherwith thechange
of export focusof nationalmanufacturers towards
CIScountries resulted in thedeficitof the“gray”
compound inUkraine. In2006, Ukrainiancement
producersmade13.68million tonsof cement,
which is12.7%more than in2005.On theaverage,
cementplants reached the level of 65-68%of
capacity load (in2005, this figureequaled58-
61%).Due to the increaseddemand, theprice
ofUkrainian“graypowder”increasedmore than
by1.5 timesover theyear 2006. InSeptember
–November 2006 (topdemand) ex-plantprice
of 1 tonofM400cementwas320-390hryvnias.
EvgheniyShugaylo, CommercialDirectorof Lotos
PrivateEnterprise (Dnipropetrovsk; concrete
production for sale; industrial floorsand screed
coats; founded in1996; 160employees), says that
‘cementpriceswentupby60-65% in2006. for
example, early in2006,webought 1 tonofbulk
cement for 210-220hryvnias, at theendof theyear
REORIENTATIONOFNATIONALCEMENT
PRODUCERSFROMEUROPEANMARKETS
TOCISMARKETSAGGRAVATEDTHE
SITUATIONAROUNDTHEDEFICITOF
CEMENT INUKRAINEANDRESULTED IN
THE INCREASEOFCEMENTPRICESBYAT
LEAST1.5TIMES.
127
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BUSINESS EMIRATES
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