Sector Reports :: Sectors in Russia

Moulders can be confident that domestic plastic consumption, which to date amounts to 5 kg per capita annually, will benefit from this increased consumer spending. Production of plastic products increased 15% overall last year, and those made by various moulding methods by 40%.

Annual growth for new car sales is expected to be 7% until 2010, with current growth at 11.8%, along with the car manufacturers the automobile supply industry will be coming in, which itself has a huge demand for plastics products. According to Roland Berger, 43 percent of supply delivery companies which are not present in Russia as yet, plan to establish themselves on location in the coming three years.

Russia’s telecommunications equipment market should be of particular interest to UK moulders as the country continues to upgrade outdated equipment and infrastructure. Estimates for 2004 value the market at $2.6 billion. Cellular communications make up a significant portion of this market, as the number of cellular subscribers grew to 66.05 million by November 2004—a 216% increase over 2003 figures.

The medical equipment and devices market is garnering even more attention in recent years, and not just for its steady growth rates, which have exceeded 10% annually. Speculation exists concerning how the government might spend some of its surplus revenues, now accumulating in the country’s fiscal stabilization fund. Designed to help ease the economic problems associated with a volatile energy market by stocking away excess petro-dollars, the fund has grown to more than 4% of the nation’s GDP. Many feel that the government will use some of this fund to upgrade the county’s aging healthcare facilities and equipment

One of the fastest growing sales market in the plastics industry is packaging, not only are product design and quality decisive factors for selling a product. The packaging itself has become an important marketing instrument. Therefore, the requirements for quality and visual design of the packaging have risen. That is why plastic packaging becomes more and more popular.

Due to the availability of funds in the Russian gas industry, a number of RAO Gazprom's subsidiaries are creating new plastic production facilities. Gazprom purchases imported equipment to manufacture polymer products, e.g., water supply pipes in Obninsk, plastic furniture, films, plastic bags, and disposable cookware in the Kaluga region, pipes for gas distribution systems in Tyumen, polymer insulation materials in Yekaterinburg.

Unlike in the past, when most of the plastic products came from abroad, production in local sites has become more important. Accordingly consumption has risen for all plastics and resin types.

According to forecast of Market Report Company (MRC), total PVC consumption in Russia will increase by 15-16% in 2006. Factual market growth has exceeded all expectations during last four years and made up 26% annually. Selected consumption figures currently conservatively stand at; PVC: 570,000 tonnes, Polyethylene: over 1 million tonnes, Polypropylene: 900,000 tonnes. According to estimates by the Research Centre of Technical and Economic Research in Moscow, production volume in 2004 of synthetic rubbers and plastics in Russia was 3,100,000 tonnes.

This situation results in the fact that there already exists in the market a strong competition among foreign suppliers of equipment seeking to fill in the urgent demand for modern machinery.