Ici: Current Situation And Market Position
EXECUTIVE SUMMARY
This investigation of Russian Chemical market was prepared by R&D department of ICI in collaboration with a group of private consultants in Russia. Major trends in Russian Chemical industry were analyzed, a few financial indicators were calculated and provisions about opportunities were made.
During the last ten years, Russian Chemical industry recovers from the dramatic fall of early 1990’s. Placed near the infinite sources of raw materials, having access to cheap labor force it grew together with Russian economy. Nevertheless, chemical industry experienced the same problems, as all other Russian industries:
most of the capital assets are outdated, all the biggest plants were built in 1980’s;
low investment activity with the volume of 52% to the level of year 1991;
scientific and engineering facilities were lost during 1990’s;
growing energy prices add costs to highly inefficient production.
Significant growth of last years was due to the high amount of idle productive capacity and rising oil costs. Nevertheless, some of the major chemical companies like Sibur showed significant increase in profits and revenues.
At the same time some sectors of chemical industry could not make use of economy growth. Coatings sector struggles for survival under the pressure of high quality imported products. Market share of Russian companies declaims with customers moving to better imported products and lack of R&D make no hope that any significant independent national player will stay in any foreseeable future.
Realizing all the burdening factors, Russian government launches some initiatives, aiming to acceleration of chemical industry. The Program of chemical industry development through 2015 declares ambitious targets to achieve in all sectors, including petrochemical, non-organic chemical, pharmaceutical and many others. Special attention is paid to renovation of...
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