Industrial Chemicals/Chemical Production Machinery in Russia

A Hot Tip about Special-Purpose Machinery in Russia

Posted on: 4 Jan 2010

Overview

Chemicals

The Russian chemical industry represents about 1.7% of Russia’s GDP and produces around 1% of the world’s chemical products. This sector includes mineral fertilizers, synthetic plastics and resins, tires, rubber products, synthetic fibers, paints and coatings, synthetic detergents and other chemical products. The Russian chemical industry is fully privatized and, along with small and medium-sized companies, is represented by a number of dominant large concerns. These include SIBUR, Nizhnekamskneftekhim, Lukoil-Neftekhim, Eurokhim and many others.

 

In 2006-2007, 62% of domestic production was represented by basic chemicals, such as fertilizers, synthetic plastics and resins. During the same period, exports and imports shared about 50% of the total market; however, the product structure of exports and imports was different. While the bulk of exports are primary chemicals, such as styrene, methanol, and synthetic rubbers, the range of imported product categories is wide and is represented by highly advanced and finished products such as tires, polystyrene, paints and coatings and chemical fibers.

 

U.S. chemicals make up approximately 2.3% to 3% of Russia’s total chemical imports. In 2007, imports from the United States totaled USD $337.3 million.

 

As a consequence of the global economic crisis currently impacting Russia, there has been a drop in demand for and local production of all chemicals. At the same time, due to the devaluation of the local currency, the value of imports in 2008 decreased considerably.

 

The Russian government’s Strategic Development Plan for the chemical industry forecasts growth to $153.2 billion by 2015. The strategy calls for a 12% decrease in imports and the development of domestic production to replace imports of more complicated, secondary chemicals.

 

Machinery

Although market statistics for chemical machinery are not readily available, this sector is heavily skewed toward imports. Nearly 100% of molding and extrusion equipment used by Russian chemical companies is imported. Leading exporters of equipment include Germany, Italy, Austria, China, Taiwan, South Korea, Hong Kong, Switzerland, Luxembourg, France, Sweden and Spain.

 

In 2006, approximately 70 domestic molding equipment manufacturers were represented in the Russian market. Imports grew in 2006, compared to previous years, primarily due to an increasing share of new equipment and a decreasing amount of used machinery. European suppliers continued to sell both new and used molding machines. For example, the German company Demag, one of the leading exporters to Russia, realized 54% of its sales to Russia by supplying new equipment, while 46% was used equipment. Asian molding equipment manufacturers supplied only used equipment to Russia in 2006.

 

Best Prospects/Services

Chemical and plastic processing equipment, special coatings, and complex specialty chemicals. The Russian government’s plan to expand the chemical sector should lead to increased purchases of imported production equipment.

 

Opportunities

The competitive situation in this market will force local chemical companies to upgrade their technologies to be able to meet demand for new materials and products. In the next five years, the best opportunities for U.S. exporters will be machinery and equipment that can enable local manufacturers to increase market share in quality secondary chemical products.

 

Read the full market research report


Posted: 04 January 2010

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