Professional Documents
Culture Documents
BB Ukraine-Baumaterial2006 en
BB Ukraine-Baumaterial2006 en
Ukraine
Compiled by:
ACKNOWLEDGEMENTS
This publication was made possible through support provided by the U.S. Agency for International
Development (USAID) under the terms of Contract No. 121-C-00-00-00831-00.
The Construction Materials Sector Diagnostics was conducted by KPD 100 Private Enterprise Information
Marketing Center by request of BIZPRO.
ADDITIONAL REFERENCES
All BIZPRO reports and publications can be downloaded in PDF format from the “Electronic Library”
section of the BIZPRO website (www.bizpro.org.ua ).
U. S. Agency for International Development (USAID) KPD 100 Private Enterprise Information Marketing
http://ukraine.usaid.gov
BIZPRO
24 Polyova St., 1st Floor
Kyiv 03056 Ukraine
Тel.: (+38-044) 490-3350
Fax: (+38-044) 496-7728
www.bizpro.org.ua
SECTOR DIAGNOSTICS
CONSTRUCTION
MATERIALS
October 2006
This report has been compiled based on a survey the findings of which may differ from the point of view of BIZPRO
or the U.S. Agency for International Development (USAID).
Kyiv 2006
CONTENTS
SUMMARY ........................................................................................................................................... 1
SURVEY METHODOLOGY ................................................................................................................. 6
1. STRUCTURE AND CAPACITY OF SECTOR’S MARKET ............................................................. 7
1.1. Segmentation of Sector’s Market by Product Group ......................................................... 7
1.2. Production Volume by Segment in 2000-2004. Key Producers ........................................ 10
1.3. Sales by Segment in 2000-2005........................................................................................ 46
1.4. Volume and Structure of Sector’s Export in 2000-2004..................................................... 54
1.5. Volume and Structure of Sector’s Import in 2000-2004..................................................... 57
1.6. Volume of Foreign Direct Investment in 2000-2004 .......................................................... 62
2. PRODUCTION ................................................................................................................................. 64
2.1. Organization and Structure of Production......................................................................... 64
2.2. Technological Level and Re-Equipment of Sector Enterprises ........................................ 68
2.3. Research and Development and Copyright Issues .......................................................... 74
2.4. Problems of Certification and Standardization of Products .............................................. 77
3. RAW MATERIALS AND RESOURCES .......................................................................................... 81
3.1. Situation on Raw Materials Market .................................................................................. 81
3.2. Models for Supplying Raw Materials Used by Enterprises in the Sector......................... 87
3.3. Structure and Efficiency of Energy Resources Use......................................................... 88
4. SALES.............................................................................................................................................. 97
5. COMPETITION................................................................................................................................. 108
5.1. Market Shares of Key Competitors .................................................................................. 108
5.2. Activities of Key Market Players....................................................................................... 108
5.3. Level of Competition and Competitive Advantages of Various
Companies in the Industry ...................................................................................................... 130
5.4. The Shadow Economy’s Role.......................................................................................... 133
6. FINANCE.......................................................................................................................................... 134
6.1. Cost Structure ................................................................................................................. 134
6.2. Average Production Profitability by Segment ................................................................. 134
7. EXPORT BUSINESS ....................................................................................................................... 136
7.1. Export Business of Enterprises in the Sector ................................................................. 136
7.2. Level of Support and Evaluation of Consequences of Ukraine’s Possible Accession to
World Trade Organization, European Union, and Common Economic Space...................... 139
8. DEVELOPMENT .............................................................................................................................. 146
8.1. Main Directions for Industry’s Development ................................................................... 146
8.2. Quality Standards, Extent of Implementation of International Certification .................... 148
8.3. Level, Structure, and Origin of Investments in Development of Sector’s Enterprises .... 153
9. REGULATORY ENVIRONMENT..................................................................................................... 156
9.1. Administrative Barriers to Economic Activity in Construction Materials Sector .............. 157
9.2. Influence of Economic Entities on Regulatory Environment........................................... 160
10. BUSINESS ASSOCIATIONS......................................................................................................... 164
APPENDICES ...................................................................................................................................... 171
GENERAL SPECIFICATIONS FOR BUILDING PRODUCTS.............................................. 208
LIST OF ABBREVIATIONS USED ....................................................................................... 219
SUMMARY
Market Various industry segments have different
development dynamics. The production of
The nonmetal construction materials industry, ceramic tiles, walling, dry building mixtures,
which is the subject of this survey, can be concrete or artificial stone components of
subdivided into four main segments, according to prefabricated structures for residential and civil
what it produces: construction, plaster products for residential and
civil construction, and sheet glass increased from
1. Nonmetal mineral products (cement, lime
2000 through 2004. There was some decline in
and plaster, glass and glass products,
the production of corrugated boards (asbestos
ceramic products, walling and roofing,
boards and similar asbestos cement products),
mining and dressing of natural stone,
slag wool, mineral silicate cotton, and other heat-
heat-insulating and waterproofing
insulating materials.
materials, etc.);
The construction materials sector is quite active
2. Varnishes, paints, and dyes;
both in export and import. Thus, import in the
3. Rubber and plastic building products; industry amounted to $1,155.2 million at the end
of 2005, and export to $1,160.2 million. According
4. Parquet and other wood articles. to Ukraine’s State Statistics Committee, import
was growing at an average 20% annually (both in
The Ukrainian construction materials sector has terms of money and physical volume) during
been showing sustainable growth since 2000, 2000-2004.
thanks to:
According to the Statistics Committee data, the
1) overall development of the building industry’s key export items include wood products
industry, manifested in new building and mineral materials and products (including
projects; and sheet glass, ceramic products, granite, and raw
2) reconstruction of residential, office, materials used for production of construction
commercial, and industrial properties. materials). CIS and European countries are the
key markets for industry exporters.
In the period under study, the industry was
characterized by high growth rates, averaging The construction materials imported are goods
15% every year. Sales of construction materials made by means of technologically complex
are showing even higher growth figures, of 25% processing and manufacturing processes.
per year. In 2003-2004, there was a substantial Domestic manufacturers’ equipment keeps them
growth in production, and the industry grew at from fully satisfying internal market demand.
nearly 30%. Plastics, flooring materials, stairs, and ceilings, as
well as heat-insulating and waterproofing
According to Ukraine’s State Statistics Committee, materials, account for the largest percentage
there are nearly 9,000 companies making share of imports.
construction materials in Ukraine. The majority of
them are concentrated in the Kyiv, Lviv, Kharkiv, The construction materials sector’s attraction of
Donetsk, Sumy, and Zhytomyr regions. However, investors is based on Ukraine’s improved
the range and quality of domestic products do not economic climate, the availability of a raw
always satisfy the needs of modern civil materials base, the development of the
engineering. A significant development lag is the construction materials trade sector, and the
result of the sub-par technological level of growing volume of capital construction. The
production facilities, and requires innovation and largest number of investors come from Russia,
investment. Germany, Italy, France, the USA, and island
nations. Foreign investment is still not
Based on State Statistics Committee data, the considerable. It is hampered by a deficiency of
nonmetal construction product industry’s output manufacturing facilities, a lack of political stability,
amounted to Hr14.8 billion in 2004, including: high taxes, the lack of an investment insurance
Hr12.7 billion for mineral products, Hr0.8 billion for system, and insufficient state support for
paints and varnishes, Hr0.8 billion for rubber and investment policy.
plastic building products, and Hr0.5 billion for
woodworking and wood products.
Prepared by BIZPRO 1
Investors prefer establishing new manufacturing not consider the existing domestic standards
enterprises, and opening branches and affiliate obsolete.
companies, to modernizing and modifying existing
facilities. This is primarily due to the existing Raw Materials and Resources
facilities’ lack of compliance with modern
Ukraine has plentiful natural sources of raw
manufacturing standards. Foreign investors,
materials for making construction materials:
however, also invest in existing enterprises,
deposits of kaolin, clay, lime, gypsum, granite,
launch production lines, invest in development of
quartz sand, basalt, chalk and pearlite.
retail chains, create and promote trademarks, and
Construction materials producers have no
modernize enterprises. The most attractive
problem in terms of raw materials availability.
segments for foreign investors include plastic
However, to manufacture certain products,
products, glass, kaolin, cement, dry building
smaller amounts of raw materials and stock are
mixtures, ceramic tiles, and plaster stone
imported, mainly from Western European and CIS
products.
states. To produce dry building mixtures, for
Production example, significant amounts of admixtures are
required, which are imported from EU countries.
Significant qualitative changes took place in the
structure of construction materials production over Energy accounts for about 16.3% (this share
the last two years (2004-2005): varied from 5% to 40% by segment) of the cost
structure of construction materials. To reduce
- manufacturers are introducing new energy consumption, each industry’s segment is
technology, modernizing their enterprises using its own methods. For example, glass
(most with their own equity and foreign manufacturers are improving their raw material
direct investment); processing techniques and the design of their
glass furnaces. Roofing manufacturers are
- they’re introducing foreign technology and improving the structure of materials and new
implementing quality assurance systems production techniques. One of the key methods of
based on international standards; reducing fuel consumption in the production of
- transition is underway towards cement, meanwhile, is to reduce the slime
manufacturing materials and products the humidity, etc. Another issue is modifying the
market needs (based on new technology, facilities to take advantage of the energy-carriers
with the latest properties and features). that prevail in Ukraine, as well as non-traditional
These conform to modern building energy sources (solar, wind, and industrial waste).
requirements. They are competitive and Sales
can replace imports (wood products,
paints and varnishes, heat-insulating The primary sales channels for construction
materials and products, bricks, dry- materials manufacturers include building
building mixtures, and safety glass). organizations, wholesale distributors, and
specialized stores or construction material
The industry is energetically modernizing itself. supermarkets. Markets and bazaars are still active
According to the survey, the majority of in this sector, selling products to retail customers.
companies in the industry (62.5%) were buying Large enterprises also create their own sales
equipment, mostly by the individual unit, in 2005. chains and sell their produce through their own
This is especially the case for large companies. representative offices. Some construction
Foreign equipment was mostly imported from materials distributors operate directly from
Germany, Italy, Poland, and Russia. manufacturers’ warehouses, which sell
Copyright construction materials in large batches.
In entrepreneurs’ opinion, copyright issues are not According to the survey, direct sales to end users
very relevant for the construction materials sector. from the warehouse and custom orders were the
Only 9.0% of the surveyed industry enterprises most common sales channel in 2005. They were
claimed that illegal copying of industrial models used by nearly two thirds of companies. Half the
was common, whereas two thirds of those surveyed companies indicate that their products
surveyed believe there is no illegal copying at all. are distributed through wholesale agents. About a
third of companies used such channels as retail
Certification agents and direct sales through their own retail
chains.
There is mandatory and voluntary certification for
the majority of construction materials industry Competition
products in Ukraine. Survey results show that a
quarter of the companies whose products are The construction materials sector consists of
subject to mandatory certification in Ukraine do numerous product categories subdivided into
segments. It is therefore reasonable to discuss
Prepared by BIZPRO 2
competition within each segment and sub- According to the surveyed companies, the main
segment. methods of competitive struggle in the domestic
market include attractive pricing (52.1% of the
For instance, in the cement production segment, surveyed entrepreneurs believe that their pricing
nearly 60% of the Ukrainian market is controlled provides competitive advantages), properly
by four large companies (HEIDELBERGCement, operating sales channels (51.3% of entrepreneurs
EUROCEMENT, CRH, Dyckerhoff), which own six depend on that), and superior product quality
cement plants in different parts of Ukraine: OJSC compared to the competition (this is the core
Balcem, OJSC Podolcement, OJSC Kryvyi Rih- competitive advantage for 49.6% of companies). It
Cement, OJSC Cement Donbasu, OJSC Volyn- is only a comparatively small percentage of
Cement, and OJSC Dniprocement. Regional companies that rely on unique products (14.3%)
business groups own the rest Ukraine’s cement and customized products (10.1%).
plants.
In experts’ estimates, the shadow economy plays
There is a real fight in the roofing felt market for an important role in the construction materials
market shares and to boost production outputs. market. Building projects require significant
The key players here include Slavuta Ruberoid financial outlays; therefore, consumers try to find
Plant, Technonikol, and Akvaizol, based in any means to save money. Shadow sector
Kharkiv. methods are based on significantly reduced
The Proletariy Glass Plant, in Lysychansk, is a prices. These interfere with the operation of legal
clear leader in the glass market. It manufactures players, which try to fight the gray market by
high-quality, thermally-polished float glass. creating and promoting new trademarks,
developing protective packaging/labeling,
The markets for dry building mixtures and paints establishing closer cooperation with distributors,
and varnishes were quite competitive. The market and expanding their own distribution networks,
for dry building mixtures (80%-85% of total output) etc.
is dominated by ten enterprises of national
significance (listed alphabetically): Akvalit (Akvalit Finance
TM), Artil (Artisan TM), Bion-Impeks (Sim Gnomiv Making construction materials is raw material
TM), Helios (Ferozit TM), PavlohradZhytloBud intensive, and therefore, raw materials costs and
(BudMaister TM), Polirem (Polirem TM), TRST inputs account for the major part of production
(ProfiLine TM), Fomalhaut (Polimin TM), Henkel costs. According to the interviewed experts, these
Bautechnik Ukraine (Ceresit, Thomsit TM), and costs account on average for 52% of production
KhZSS (Tokan TM). cost. The rest is used for payroll, depreciation of
More than 80% of the varnish and paint market in equipment, energy, transport, marketing, R&D,
Ukraine is held by leading manufacturers, the packaging, etc.
most important of which are the Dnipropetrovs’k Construction materials are a rather profitable
Varnish-and-Paint Plant, CJSC Lakma, OJSC business. Some 53.7% of companies regard the
Sumykhimprom, OJSC ELAKS, Korosten’ Yantar financial situation as profitable based on their
Plant, CJSC Nifar, PE ZIP, and Kremniypolimer. 2005 performance, and 36.3% describe it as
Concurrently with development of the leading breakeven. Only 10% state they were unprofitable
Ukrainian manufacturers, foreign producers are in 2005.
launching their own affiliates, including Sniezka
(Poland) and Jobi (the Netherlands). They are According to unofficial data, average profitability in
also creating joint ventures like Meffert (a German the industry runs between 15% and 20%. Each
concern with the Dnipropetrovs’k Plant) and Farby segment, however, has its own profitability level,
Koloryt Ltd. (Finnish-Ukrainian JV, Tikkurila TM). which depends on the prime cost and level of
competition, product life, range of products,
The ceramic tiles market was occupied by the demand trends, and company size. Aside from the
following companies in 2004: Kharkivska general profitability situation, there are differing
Keramika Ltd. (55.2%); Atem (13.8%); CJSC Lviv profitability levels for different product groups
Ceramics Plant (18.9%); CJSC Piastrella-K within one company. Specifically, a unique
(7.2%); Karpatska Keramika (4.0%); and ChMP product might be more profitable, while for other
Fagot (4.0%). The Zevs Keramika Company groups it makes sense from the marketing point of
significantly boosted its output by launching new view to work “zero-based.”
production lines in 2005.
Therefore, according to respondents’ data, the
The Kovalska Reinforced Concrete Plant (50%), average profitability for the dry building mixtures
ZhBK No.1 (8%), and Darnytsya ZhBK (6%) are segment is estimated at 15% to 18%, and
the key players in the production of concrete and sometimes approaches 25%. Profitability as high
products. as 100% could be achieved for brick manufacture
Prepared by BIZPRO 3
and sales; however, it is normally 50% (even
though profitability for brick manufacturing without
7
sales only amounts to 3%-10%). Average - bringing production development to a
profitability for the varnish and paint segment qualitatively higher level;
oscillates between 20% and 80% (even though
some experts also quoted the figure of 5%). For - increased production volume and sales thanks to
woodworking, concrete, roofing and ceramics market expansion (however, tougher competition
products, the profitability is rather low, varying is also possible).
from 5% to 10%.
Development
Export and Participation in International There are good prospects for growth in each
Associations segment of the construction materials industry.
Today, only about a quarter of construction For the dry building mixtures segment, experts
materials companies (24.8%) are exporting their forecast growth in the share of cement and plaster
produce. Large companies are the main exporters mixtures. It is estimated that the market for dry
in the sector. Some 66.7% of them are or have building mixtures will grow by about 30%.
been involved in export. According to market experts, heat-insulating
For the companies engaged in export business, systems are the most promising materials (given
the main foreign markets include CIS states and price hikes in utility services and energy), along
European countries. with plaster fillers and grout. Some manufacturers
forecast increases in sales of certain types of dry
According to the survey, the main problems mixtures, e.g., materials for machine application
companies have experienced in entering CIS and façade finishing.
markets have been a high level of competition and
bureaucratic barriers in Ukraine. In the concrete products segment, the production
of foam concrete is expected to increase, as its
Overall, the Ukrainian manufacturers of properties are superior to those of ceramic bricks
construction materials are supportive of Ukraine’s and reinforced concrete.
joining various economic and political groups.
Nearly a half of surveyed companies fully support The glass market is developing rapidly. Experts
Ukraine’s joining the World Trade Organization, believe the main focus will be on production of
European Union, and Common Economic Space, float glass, hardened and safety glass for building,
with about a quarter of companies opposed to and energy-saving glass.
such actions. The roofing market is also developing: corrugated
However, opinions widely vary about possible bitumen plates (euro-boards) and polymer-
consequences of joining the above groups. bitumen membranes (euro-ruberoid).
Opinions split almost equally with regard to the The varnish and paint market is showing growth in
possible impact of Ukraine’s joining the WTO and output and an increase in the number of brands
EU. Some 28.2% of entrepreneurs believe WTO present on the market, both Ukrainian and
accession will improve the situation in their international. Advertising activity is growing, and
companies, 27.3% expect a worsening of there is growing demand for higher-quality and
situation, and another 31.8% believe nothing is environment-friendly goods in the mid-price and
going to change. Expectations about joining the premium price segments. Water-dispersion acrylic
European Union are approximately the same. paints very promising.
There are more positive expectations regarding In the rubber and plastics segment, experts
Ukraine’s joining the Common Economic Space, expect a 20% increase in the production of
with just 16.8% of interviewed entrepreneurs polyethylene pipes.
believing that joining it will have a negative impact
on their companies. Improvements in their Survey results indicate that most companies’
situations are anticipated by 33.6% of enterprises, products are standardized, as required by the law
and 35.5% believe that nothing will change. (78.3% of companies). The situation is virtually
the same as regards certification according to
Well-informed manufacturers believe that joining Ukrainian standards, with the products of every
the WTO, EU, and CES will have a positive second surveyed company subject to mandatory
impact on development of Ukrainian enterprises certification in Ukraine.
and increase their output, as possible
consequences of joining these groups would The level of implementation of quality
include: management systems, however, is rather low.
Only 23.5% of companies have international
- leveling of border barriers; certificates for their quality management systems.
- improvement of Ukraine’s investment This situation is primarily connected with various
attractiveness; companies’ engagement in the export business.
Only 34.6% of companies have international
Prepared by BIZPRO 4
certificates. This is because the level of specialization and cooperation in manufacturing;
production and quality of goods fail to comply with cooperation in R&D activities, etc. However, the
international standards. level of engagement of the construction materials
industry’s companies with business
Regulatory Environment groups/business associations was low as of April
2006. According to the survey, nearly one third of
Survey results indicate that the regulatory
companies in the industry (27.7%) are members
environment remains largely unfavorable for
of such associations.
conducting business.
The following industry associations are extant in
Companies’ most common encounters with
Ukraine at this time:
supervisory bodies take place during inspections
related to economic activities (81.5% of the - Association of Cement Producers;
companies experienced this procedure in 2005).
- Association of Producers of Dry Building
The most complicated procedures were those Mixtures;
related to licensing and obtaining permits. The
simplest ones were those related to import of - Association of Ceramics Products
goods. Producers, Exporters, and Importers;
Prepared by BIZPRO 5
SURVEY METHODOLOGY
The survey objective is to study the status and 10. Regulatory environment
dynamics of the construction materials sector in
the period of 2000 through 2005. 11. Level of civic engagement of companies
The following data have been used in the course In terms of their size, the companies have been
of the survey: categorized into small (up to 50 employees
inclusive), medium-sized (from 51 to 250
1. Secondary Data employees), and large (more than 250
employees) companies. Companies of different
1. Summarized data of Ukraine’s State Statistics sizes have been selected in proportion to their
Committee regarding construction materials share in the general sample.
production volume, sales of construction
materials, volume of export and import of 3. Results of Expert Survey Conducted by
construction materials, and foreign investments in KPD100 Company
the construction materials industry.
The survey was intended for obtaining expert
2. Media reports and other open sources of evaluations of the situation on the construction
information. materials market.
2. Results of the National Survey of Managers The survey tasks were as follows:
of Construction Materials Industry Companies,
Commissioned by the BIZPRO Project 1. Identify construction materials market trends in
terms of raw material supplies (Ukrainian and
The national survey of company managers in foreign suppliers) and forecast the situation for the
various manufacturing sectors has been next several years.
performed with a view toward studying the internal
and external barriers to conducting business in 2. Assign the main production costs by item,
the construction materials sector. assessing the profitability level.
The survey was conducted among managers of 3. Evaluate export capacity of companies of
companies of all sizes, all of which are legal different sizes, identifying the target export
entities and which operate in the construction countries.
materials industry as their core activity. The 4. Evaluate the quality of products manufactured
survey focused on manufacturing companies only, by various industry companies, as well as their
without surveying any trade companies or compliance with international standards.
customers. The total sample comprises 122
company CEOs. 5. Identify investing locations, directions, origins,
and forecasts (including foreign investments) for
The survey has been implemented using the the industry.
structured interview method. The questionnaire
included the following sections: 6. Evaluate the producers’ ability to influence
government policy pertaining to their industry.
1. Key information about the company
7. Evaluate availability and operational
2. Export particularities of R&D and experimental design
3. Investments departments within companies, as well as clarify
the situation concerning availability of registered
4. Resources trademarks.
5. Sales channels 8. Identify the key producers of construction
materials in Ukraine and assess their market
6. Foreign economic policies shares.
7. Standardization and certification 9. Evaluate the size of the shadow economy.
8. Competition The sample consisted of 14 experts. The experts
9. New designs and industrial models are CEOs of large and medium-sized construction
materials manufacturing companies.
Prepared by BIZPRO 6
1. STRUCTURE AND CAPACITY
OF SECTOR’S MARKET
1.1. SEGMENTATION OF SECTOR’S MARKET BY PRODUCT GROUP
According to Ukraine’s National Classifier SCP roofing tiles, cement, plaster, stone dressing,
(DK 009:2005, effective as of April 1, 2006), the etc.); production of varnishes, paints, and dyes;
nonmetal construction materials sector may be manufacture of rubber and plastic products for
subdivided into four main segments, according to building; and manufacture of parquet and other
groups of building products: manufacture of wood products.
nonmetal mineral products (production of all
types of glass, ceramic products, tiles, bricks, The sector structure is shown in Diagram 1-1.
CONSTRUCTION
MATERIALS SECTOR
Prepared by BIZPRO 7
The diagram has three segments shown - production of heat-insulating, waterproofing, and
separately: soundproofing materials (made of both mineral
raw materials and through chemical processes);
а) Production of ceilings, floors, and stairs,
- manufacture of building fittings and equipment,
b) Production of roofing materials, and which should be considered as a separate class
c) Manufacture of doors and windows, the or as machine-building industry segment.
component parts and materials of which belong to According to the State Statistics Committee, the
various product groups within the construction output of the nonmetal construction materials
materials sector, and which are taken into account sector amounted to Hr14.8 billion in 2004,
in the total production output. It seems including Hr12.7 billion for nonmetal mineral
reasonable, however, to diagnose these products; Hr0.8 billion for varnishes and paints;
segments as a single separate segment. Hr0.8 billion for rubber and plastics products; and
Also, the following should be referred to the Hr0.5 billion for woodworking and wood products
construction materials sector: (Fig.1-1). A detailed description of the items
included in the sub-segments is contained in the
- production of joining and sealing materials Appendices, Tables 1 and 2.
(which borders on chemical industry goods);
FIGURE 1-1. STRUCTURE AND OUTPUT OF CONSTRUCTION MATERIALS SECTOR IN 2004, HR
MILLION
14000 12717,7
12000
Production of nonmetal mineral products
10000
Production of varnishes and paints
8000
Hr million
As the data makes clear, mineral products are the output in monetary terms. The breakdown of
key subsector within the construction materials segment shares within the sector is shown in
segment, amounting to 85.8% of the total sector Fig.1-2.
Prepared by BIZPRO 8
Due to a change in the state classifier in 2004, it Therefore, we will provide a comparison for the
would be inappropriate to compare the data of years 2000-2003. During 2000-2003, production
2000-2003 and 2004, as the composition and output grew at an average annual rate of about
number of product groups by subsector have 15% (Fig.1-3) and sales grew at an average of
changed (the classification of 2000-2003 is shown 25% per year (2000-2003) (Fig.1-4).
in greater detail in Table 2 of the Appendices).
FIGURE 1-3. PRODUCTION VOLUME OF NONMETAL CONSTRUCTION MATERIALS IN 2000-2004,
HR MILLION
4000,7
3264,6
2277,4 2938,5
1184,9
1089,7
1271,5 941,
972,3
519,4 700,7
417,8
60,7 83,9 144,0
36,6
2000 2001 2002 2003
11492,0
9830,7
8073,3
1062,8
6166,5 960,0
5766,4 852,6
5075,5 803,6
900,8 376.7
645,3 7196,8
612,1 530,4
451,2 445.3 5730,1
363.6 4535,5
2790,8 3153,6
2239,6
Prepared by BIZPRO 9
According to estimates of Ukrainian experts1, the growth of building volume and contract work
construction materials and services market has thanks to implementation of capital repairs and
significant potential, showing growth of 26%-30% reconstruction of industrial enterprises. In the
in 2004 against the previous year. majority of the country’s regions, especially in the
capital city, there was a significant increase in
Positive trends on the market are influenced by a building of social and cultural facilities, including
number of factors, the most important of which residential properties. Significant investments in
include: capital construction have made it possible for the
1. High growth rates for the country’s economy. building industry to make Hr20.8 billion in
According to the State Statistics Committee, the contracts, which is 23.9% more than the 2003
average annual GDP growth rate was 8.4% from 2000- amount of Hr14.0 billion (which itself is 24.3%
2004 (a 12% increase was recorded in 2004 vs. 2003). more than in 2002)3.
2. A higher growth of gross added value was observed 4. The growth of the population’s real disposable
in 2000-2004 in the core types of economic activity, income, adjusted for the price factor and inflation,
2
where the building industry occupies a special place . by an average of 13% in the period 2000-20044.
3. The growing volume of commercial and office 5. The improved quality of construction materials
building construction projects, as well as of and extensive use of advanced materials and
residential projects. technology.
Prepared by BIZPRO 10
There has been an unconditional increase in glass plants and about 180 enterprises engaged in
sales since 2001, with an average annual growth industrial processing of plate glass, are all non-
of about 20%1. This has been caused by the governmental enterprises. Not all of them survive
growing use of medium- and high-quality float the competition. Some diversify into making other
glass. Experts believe it is the growing demand for products and learn how to work under market
this product that caused a decrease in exports for conditions. Capital assets are worn out. A lack of
the Proletariy Plant in 2002-2003, which resulted long-term capital investment has led to an almost
in increased sales on the domestic market. This complete moratorium on construction of new
has also boosted imports from Russia and facilities that make plate float glass, leading to an
Belarus. annual shortfall of 15 million m2.
Experts estimate the annual increase in use of Only one company, CJSC Lysychansk Proletariy
float glass in Ukraine at 20%. For special types of Glass Plant, is working and developing; a float
glass (tinted, mirror, and low-emission glass), the glass line is being built at the plant at this time).
annual growth in consumption is estimated at The company produces about 17 million m2 of
35%-40%, nearly all satisfied through imported plate float glass per year, which is clearly not
supplies. sufficient.
Today, enterprises making glass and products,
including more than 50 large- and medium-sized
TABLE 1-1. STRUCTURE OF PLATE GLASS MARKET IN UKRAINE IN 20042
Output in 2004, Import in 2004, Export in 2004, Demand, Shortfall,
Type of glass
million m2 million m2 million m2 million m2 million m2
Drawn glass 9.044 0.662 4.424 11.00 5.718
Float glass 16.745 7.7517 8.185 35.00 18.6883
FIGURE 1- 5. GLASS PRODUCTION VOLUME IN 2000-2004, HR MILLION
500
435,5
450
386,0
400 349,8
350
Hr million
300 260,9
231,3
250
200
150
100
50
0
2000 2001 2002 2003 2004
______________________
1
From calculation of absolute value data of the State Statistics Committee of Ukraine.
2
www.okna.com.ua
3 rd
From materials of the roundtable Prospects for Using Glass in the Building Industry, 3 International Specialized Exhibition
“Primus: Architectural Glass 2006”.
Prepared by BIZPRO 11
FIGURE 1-6. PRODUCTION AND CONSUMPTION OF PLATE GLASS IN UKRAINE IN 2002-2005,
SQUARE METERS
29,5
30
26,6 25,8 25,8
24,4
25
21,3
20 19,2 18,6
15
10
0
2002 2003 2004 2005г.
production consumption
Looking at trends in the development of the glass Tables 1-2 show the main materials in the glass
market structure, one might notice that high- production structure and physical production
quality production is growing at a high rate, volume figures for 2000-2004.
squeezing out low-quality products. This is a
result of the current move towards energy
efficiency and various customized designs.
______________________
1
Here and further on: Due to change of Production Classifier in 2004, tables dating before and after the year 2004 are shown
separately.
Prepared by BIZPRO 12
17
Glass production in Ukraine was estimated at imported, including 7.8 million m2 of float glass,
650,000 tons in 2005. Production of float glass 0.7 million m2 of cathedral glass, 247,000 m2 of
and ground/polished glass in Ukraine decreased safety glass, and 658,000 m2 of laminated glass.
by 14.5% to 8.3 million m2 in January-July 2005 This, despite the fact that Ukraine has companies
compared to the same period in the previous year. that make special glazing. Yet glass made by
In July 2005, output decreased by 0.6% year on European manufacturers is used for such glazing
year, to 1.4 million m2, which is 15.3% more than today.
in June 2005.
The country needs about 8.5 million m2 of
Production of cast and rolled glass increased by capacity to replace the old glazing, which causes
3.7% in January-July 2005 year on year, to 5.2 losses of nearly 40% of heat. The lack of special
million m2. Production in July 2005 increased by glass, its high price, the high cost of the
5.9% year on year, to 0.8 million m2, which is equipment needed to produce it —all lead to
2.4% more than in June 2005. The production of imported various types of glass into Ukraine,
glass and glass products should increasingly where customers are frequently unable to select
make use of progressive technology to enhance the glass they need. Architecture today is widely
its socioeconomic benefits for society by using façade glazing; there exist no standards,
improving the sector’s energy-efficiency and however, that would would mandate what is
reducing pollution and waste. required in such glazing.
Glass has become a structural material in its own Key Glass Producers
right and thus introduces unique characteristics
into the design of buildings and structures. Glass production is concentrated in the three
Ukraine, however, does not produce glass with regions: Luhansk, Donetsk, and Lviv. Experts and
decorative, specialized properties. In 2004, for official statistics identify the following main
2
example, 8.4 million m of plate glass were producers on the domestic market:
TABLE 1-4. KEY GLASS PRODUCERS
Producer Region Product
CJSC Lysychansk Proletariy Lysychansk, Luhansk Production of high-quality, thermally-
Glass Plant Oblast polished float glass of grades M1, M2, and
M7 (large size)
Budsklo Ltd. Kostyantynivka, Donetsk Production of lower-quality glass of grades
Oblast M5 and M6 (small size)
OJSC Lviv Mechanical Lviv Production of lower-quality glass of grades
Glass Plant M5 and M6 (small size)
Bucha Glass Products Plant Bucha, Kyiv Oblast Production of cathedral and wire glass
Ltd.
_______________________
1
http://www.eizvestia.com/?a=article_review&id=16094522
2
“Proizvodstvo stroitelnykh materialov v Ukrainye: obzor strategiy vykhoda na rynok” (Production of Construction Materials in
Ukraine: Review of Market Entry Strategies), National Investment Alliance, February 2005.
Prepared by BIZPRO 13
The dry mixtures market is subdivided into two mixtures. They develop as follows1:
major segments: cement- and plaster-based
TABLE 1-5. CHARACTERISTICS OF DRY MIXTURES MARKET SEGMENTS
Cement mixtures Plaster mixtures
General trends The market increased by an average of Market development has been held
15% in 2002-2004. back by the large volume of gray
Growth potential is limited only by the imports, which resul from inadequate
building industry’s growth rate. sector regulation. These imports lead
to lower surcharges for local
producers.
Market 1. Cement for ceramic tiles (largest
segmentation segment).
2. Floor mixes: about 15% of cement
mixtures.
3. Mixtures for pebble plasterwork: about
5% of cement mixtures, and with the
greatest development potential.
Market capacity About 200,000 tons per year 150,000-160,000 tons per year
600
500
500 450
400
400
300
220
190
200
100
0
2001 2002 2003 2004 2005
The highest sales dynamics within this segment primer. Brisk demand for the first two categories is
are in such product categories as cement for tiles, due to their low cost, which makes them
gypsum filler and putty, poured flooring, and affordable for lower income customers.
______________________
1
“Proizvodstvo stroitelnykh materialov v Ukrainye: obzor strategiy vykhoda na rynok” (Production of Construction Materials in
Ukraine: Review of Market Entry Strategies), National Investment Alliance, February 2005
Prepared by BIZPRO 14
As regards plaster mixtures, market operators Professional builders are the main users of dry
note that the market was saturated with cheap building mixtures, accounting for more than 75%
Turkish goods and Ukrainian compact gypsum of total consumption.
before 2004. Ukrainian manufacturers, however,
are shifting toward producing higher quality The key factors affecting the growth of the dry
products that resemble imported ones, and are building mixtures market include:
moving towards increasing their own share in the - growing volumes of building, repair and
domestic market. renovation work;
Dry building mixtures are subdivided into plaster - rising cost of materials per unit of finished work,
and cement-lime mixes. Based on 2004 which results in use of higher-quality materials
production and sales figures, these two types and better-quality workmanship;
were split as follows: 55% for cement mixtures,
and 45% for plaster mixtures1. - the use of modern building systems and
materials with minimal tolerances.
According to expert estimates2, imports now
account for about 10%-20% or the market and
Ukrainian goods for about 80%-90%.
5%
5%
10%
40%
10%
30%
Adhesive mixtures Internal Fillers and Plasters External fillers and plasters
Key Producers of Dry Building Mixtures them, however, hold minor market shares. Some
15-20 companies comprise the group of major
There are more than 100 domestic producers on producers, and a mere five or six companies
the dry building mixtures market. The majority of occupy the leading positions (Table 1.6).
______________________
1
All-house – Real Estate Information Resources. Budmaterialy vid profesionaliv (Construction Materials from Professionals), 4
November 2005
2
Property Times №3 (54), 1 February 2005
Prepared by BIZPRO 15
TABLE 1-6. KEY PRODUCERS OF DRY BUILDING MIXTURES
Producer Products
ARTIL Ltd. Artisan TM
Bion-Impeks Ltd. Sim Gnomiv ТМ
Helios Ltd. Ferozit ТМ
OJSC Pavlohradzhytbud Bud Maister ТМ
OJSC Polirem Polirem ТМ
Fomalhaut Ltd. Polimin TM
ТММ (Kharkiv Building Mixtures Plant) Tokan ТМ
Henkel Bautechnik Ukraine Ceresit, Thomsit
TM
The above companies are members of the The increase in brick production is connected with
Ukrainian Association of Producers of Dry growing construction volume. According to the
Building Mixtures. State Statistics Committee and State Building
Committee, Rynok kirpicha v Ukrainye (Ukrainian
Brick Production Brick Market) report prepared by Ukrbudmaterialy
Brick is a traditional Ukrainian material, which Corporation in 2005, the building volume peaked
suits the country’s climatic conditions and is used in 2003-2004 at 122%, which radically boosted
for building and finishing. The growing volume of the demand for bricks. Older enterprises resumed
residential and other building projects is an production of bricks. Some of the enterprises have
important factor driving up brick production been modernized. Mostly, such enterprises supply
volume and sales. Besides, experts claim, the ceramic bricks within one particular region.
“elite” appearance of ceramic bricks testifies to the According to statistics, the average annual growth
building owner’s status. Bricks are therefore rate of brick production was 20% during 2000-
becoming increasingly popular with the most 2004. The highest growth figures were noted in
demanding customers. 2004 and 2003. Growth during each of those
years was 27%.
Prepared by BIZPRO 16
Lviv Oblast 96.3 102.7 8.0 444 12
Mykolaiv Oblast 24.4 106.5 2.0 185 0
Odesa Oblast 83.7 153.6 11.2 302 4
Poltava Oblast 41.0 115.5 5.2 241 6
Rivne Oblast 29.0 102.6 4.1 182 2
Sumy Oblast 19.4 90.5 2.0 175 3
Ternopil Oblast 32.8 93.8 3.8 158 4
Kharkiv Oblast 58.5 82.9 6.3 336 2
Kherson Oblast 37.1 157.7 4.5 228 1
Khmelnytsky Oblast 32.4 78.3 3.6 215 4
Cherkasy Oblast 28.9 94.5 3.4 229 1
Chernivtsi Oblast 42.0 114.8 3.0 251 5
Chernihiv Oblast 20.9 115.7 2.0 172 3
Kyiv City 255.4 3.1 times 110.0 130 2
Sevastopol City 18.7 107.7 5.2 29 1
FIGURE 1-9. BRICK PRODUCTION VOLUME IN 2000-2004, HR MILLION
2500
1921,1
2000
1511,8
1500
Hr million
1185,5
1063,6
1000 883,7
500
0
2000 2001 2002 2003 2004
Source: State Statistics Committee of Ukraine
TABLE 1-8. BRICK PRODUCTION STRUCTURE AND VOLUME IN 2000-2003, PRODUCTION UNITS
Code Materials and products 2000 2001 2002 2003
706000 Building bricks, million equivalent units 2070.4 2047.3 2161.3 2357.9
707112 Including: Cavity and solid bricks and stones 458.5 480.0 506.2 628.4
with density of not more than 1600 kg/m3,
made of clay and lime-sand, million
equivalent units
707132 Finishing bricks, million equivalent units 84.3 97.6 95.7 116.8
707200 Lime-sand and slag bricks, million equivalent 673.5 666.7 699.4 757.6
units
707212 Including: finishing bricks, million equivalent 45.9 44.1 41.7 39.8
units
707220 Of the total volume of building bricks made 304.2 302.7 289.7 305.5
using waste of coal-preparation plants,
million equivalent units
Prepared by BIZPRO 17
TABLE 1-9. BRICK PRODUCTION STRUCTURE AND VOLUME IN 2004, PRODUCTION UNITS
Code Materials and products 2004
Bricks, blocks, tiles, and other ceramic refractory products (including slabs, 15.9
26.26.11 panels, cavity bricks, cylinders, pipes) made of siliceous stone powder or
dolomite earth, thousand tons
Ceramic refractory bricks, blocks, tiles, and other similar building refractory 724.7
26.26.12 materials, except materials made of siliceous stone powder or dolomite
earth, thousand tons
26.40.11.100A Non-refractory ceramic building bricks, million equivalent units 1828.5
Ceramic bricks and blocks for common brickwork, finished articles, 1603.5
26.40.11.130A perforated or solid, for walls with external plastering or external finishing,
million equivalent units.
Ceramic finishing bricks, finished articles, perforated or solid, for use 224.3
26.40.11.150A
without external plastering, million equivalent units
Ceramic bricks for paving (paving clinker); finished flooring and road- 0.7
26.40.11.170A
paving products, million equivalent units
26.61.11.320A Lime-sand bricks, million equivalent units 865.0
Building blocks and bricks made of cement, artificial stone or concrete, 1648.3
26.61.11.300A
million equivalent units
The brick segment has the following specific The structure of demand for ceramic and finishing
features1: bricks has been stable in recent years. However,
finishing bricks production volume is insufficient to
1. There was an increase in brick production by satisfy 14% of the market demand (the remaining
7%-18% from 2000-2004. 86% of the market demand is for ceramic bricks)2.
2. The market, estimates say, will show annual In view of this fact, the significant shortage of
growth of 8%-10% in 2005-2008. finishing bricks on the market is compensated for
by improved quality bricks. As cottages, high-rise
3. There are about 200 small local producers apartment buildings, and office and commercial
operating in the sector. buildings are the most promising building industry
segments, and the greatest share of finishing
4. There was been rapid development of bricks is used for building cottages, it is not
production of high-quality, expensive bricks. unlikely that the market share of finishing bricks
may well increase in future.
5. There is increasing competition from other
walling materials (gas concrete products). According to data from the Ukrbudmaterialy
Corporation, production of finishing bricks is
According to the State Statistics Committee, the
underdeveloped in Ukraine when compared to
production of non-refractory ceramic building
production of ceramic bricks. It is, however,
bricks increased by 3.1% in 2005 compared to
developing rapidly. There were about 2.3 million
2004, growing to 1,637 million equivalent bricks.
ceramic bricks and only 173 million finishing
In January-April, output increased by 8.7%
bricks produced in 2004.
compared to the same period in 2005, reaching
442 million equivalent bricks.
_____________________
1
“Proizvodstvo stroitelnykh materialov v Ukrainye: obzor strategiy vykhoda na rynok” (Production of Construction Materials in
Ukraine: Review of Market Entry Strategies), National Investment Alliance, February 2005.
2
Data by State Statistics Committee and State Building Committee, Rynok kirpicha v Ukrainye (Ukrainian Brick Market) report
prepared by Ukrbudmaterialy Corporation in 2005.
Prepared by BIZPRO 18
TABLE 1-11. KEY PRODUCERS OF CERAMIC BRICKS1
Producer Region 2004, million bricks 2005, million bricks
Finishing Building Total Finishin Building Total
bricks bricks g bricks bricks
Slobozhanska Romny, Sumy 52 7 59 51 6 57
Keramika (SBK) Oblast
Slobozhanska Kharkiv 15 9 24 22 7 29
Keramika (SBK)
Novy Rozdil Lviv Oblast 32 28 60 32 28 60
KeramikBudServis Ivano-Frankivsk 10 20 30 14 16 30
Oblast
Mukacheve Zakarpatska 9 3 12 10 3 13
Oblast
Artemivsk Donetsk Oblast 9 6 15 9 6 15
Ceramic Pipes
Plant
Keramik Donetsk Oblast 15 10 25 15 10 25
Azot Luhansk Oblast 15 15 15
Novooleksandrivs Dnipropetrovsk 27 27 27 27
ky Oblast
Ocheretynsky Donetsk Oblast 7 13 20 15 5 20
Bilotserkivsky Kyiv Oblast 30 30 30 30
Korchevatsky Kyiv Oblast 30 30 5 26 31
Fagot Luhansk Oblast 60 60 60 60
Total 209 198 407 233 179 412
Other Ukrainian producers also include: (produced 27 million bricks in 2004; makes
ceramic bricks);
- Kolomyya Construction Materials Plant Authority
(Ivano-Frankivsk Oblast), which has a production - CJSC Promin’ (Kyiv); production capacity 30
capacity of 80 million bricks (operated at full million bricks (22 billion bricks produced in 2004;
capacity in 2004; produces ceramic bricks)2; makes ceramic bricks);
- Chernivtsi Brickmaking Plant No.3 (Chernivtsi), - OJSC Budmaterialy (Ivano-Frankivsk Oblast);
production capacity 60 million bricks (produced 42 production capacity 46 million bricks (23 million
million bricks in 2004; makes ceramic bricks); bricks produced in 2004; makes ceramic bricks);
- Irpin’ Progres Integrated Works (Kyiv Oblast); - OJSC Keramik (Ternopil Oblast); production
production capacity 32 million bricks (produced 32 capacity 23 million bricks (produced 21 million
million bricks in 2004; produces ceramic bricks); bricks in 2004; makes ceramic bricks);
- Lutsk Brickmaking Plant (Volyn Oblast); - OJSC Chernivtsi Brickmaking Plant No.1;
production capacity 31 million bricks (operated at production capacity 36 million bricks (produced 20
full capacity in 2004; produces ceramic bricks); million bricks in 2004; makes ceramic bricks);
- OJSC Keramik (Vinnytsya Oblast); production - OJSC Zdolbuniv Construction Materials Plant
capacity 50 million (produced 30 million bricks in (Rivne Oblast); production capacity 56 million
2004; makes ceramic bricks); bricks (19 million bricks produced in 2004; makes
ceramic bricks);
- Khmelnytsky Construction Materials Plant
(Khmelnytsky Oblast); production capacity 70 - OJSC Rivne Building Materials Plant, production
million bricks (produced 29 million bricks in 2004; capacity 33 million bricks (produced 18 million
makes ceramic bricks); bricks in 2004; makes ceramic bricks).
- Snityn Brickmaking Plant (Ivano-Frankivsk The following companies should be noted among
Oblast); production capacity 30 million bricks the producers of lime-sand bricks:
_____________________
1
“Proizvodstvo stroitelnykh materialov v Ukrainye: obzor strategiy vykhoda na rynok” (Production of Construction Materials in
Ukraine: Review of Market Entry Strategies), National Investment Alliance, February 2005
2
Rynok tsehly v Ukrayini v 2005 rotsi (Ukrainian Bricks Market in 2005), Ukrbudmaterialy Corporation
Prepared by BIZPRO 19
TABLE 1-12. KEY PRODUCERS OF LIME-SAND BRICKS
Producer Region Product
Darnytsya Integrated Works of Construction Kyiv Lime-sand bricks
Materials and Structures, OJSC
Ladyzhyn Lime-Sand Brickmaking Plant, OJSC Ladyzhyn, Vinnytsya Oblast Lime-sand bricks
Lyubomyrsky Lime-Silicate Plant, OJSC Village Nova Lyubomyrivka, Lime-sand bricks
Rivne Rayon, Rivne Oblast
Sylikatobeton Plant Sumy Lime-sand bricks
JSC Tsehla Trypillya Obukhiv, Kyiv Oblast Lime-sand bricks
Chernihiv Construction Materials Plant, Ltd. Chernihiv Lime-sand bricks
The trend toward regular price hikes is standard remotest corners of Ukraine and imported in small
for the industry1. Producers justify such price batches.
increases by citing rising gas and electricity
prices. (Gas and electric power account for up to At the same time, launching their own production
40% of the prime cost of bricks. Some 15% of the facilities appears to be an unacceptable choice for
cost is for clay, and 10% to 15% of the cost is for builders. Kyivmiskbud has been hampered by a
labor). lack of specialists familiar with brickmaking
equipment and modern technology. This has
The increase of brick prices was also significantly raised concerns as to the competitiveness of their
caused by growing demand. Experts believe that own facility as compared with “outsiders.”
the present demand structure is encouraged by
changes in the technology in building multistory Real estate experts indicate that building
buildings, and primarily by the wish to abandon companies are exploiting the shortage and rising
bearing-wall structures for monolithic and frame brick prices to boost prices of new construction.
structures, the external walls of which are made of Brick shortages might also be a reason that some
bricks. This has resulted in the annual demand for building companies aren’t keeping their project
bricks on the part of the Kyivmiskbud Holding commissioning deadlines. It is not unlikely that
Company increasing from 120,000 to 200,000 given today’s market conditions, quite a few
bricks year on year (according to 2004 data). provincial brickyards, now operating at half-
capacity, could find a chance to restore their
The main market risk is that the brick production fortunes.
output in Ukraine is increasing at a much slower
pace than demand. The enterprises, which are Production of Ceramic Products
prepared to increase production, have suddenly The market for ceramic products is exciting, due
faced a problem of bureaucratic nature. Due to to the variety of products available and the
restructuring of departments within the Ministry of multitude of decorative opportunities they afford.
Ecology, which issues permits for extraction of
mineral resources, the companies could not Based on State Statistics Committee data, peak
obtain licenses for clay extraction. Besides, taking output growth of 240% was observed in 2004.
into account that many brickmaking enterprises This was due to increased production, including
were looted by shareholders for metal scrap in export production (which increased by 47%), and
1990s, the industry’s ability to sustain the building to implementation of repair work.
boom in Ukraine seems doubtful.
According to preliminary data, production of
The best approach the builders have found so far ceramic slabs and tiles increased by 19.4% in
is to expand their so-called “raw materials area.” 2005, to 19,933,200 m2. In January-April 2006,
For example, Kyivmiskbud started buying ceramic production of ceramic slabs and tiles increased by
(red) bricks beyond Kyiv Oblast, which it has 1.5% compared to January-April 2005, to
never done before due to the relatively high 6,546,000 m2.
transportation costs. Today, the company is
bringing ceramic bricks from Zhytomyr, Chernihiv, The Kharkivska Keramika Company is the largest
and Pryluky. It is also looking to transport bricks manufacturer of ceramic tiles in Ukraine,
from Poltava Oblast by rail. As for expensive producing about 70% of Ukrainian tiles.
finishing bricks, they are brought to Kyiv from the
____________________
1
The Kontrakty Ukrainian business weekly / No. 19 of 10 May 2004.
Prepared by BIZPRO 20
Key Producers manufactured by seven companies in 2004 (see
table below). Such companies as Kharkivska
There are few producers of ceramic ware in Keramika Ltd. (the successor toOJSC Kharkiv Tile
Ukraine. According to statistics, only 40 Plant) and Atem Ltd. are boosting production. A
companies were involved in this segment as their new player, CJSC Zevs Keramika, based in
core activity at the end of 2004. Twelve Donetsk, entered the market in 2005. The
companies reported being engaged in tile company accounted for up to 10% of domestic tile
production in 2003-2005. However, the main output in 2005.
volume of products (about 99%) was
FIGURE 1-10. DYNAMICS OF CERAMIC WARE PRODUCTION VOLUME IN 2000-2004, HR MILLION
450
395.3
400
350
300
Hr million
250
200
165.2
142.1
150 132
104.6
100
50
0
2000 2001 2002 2003 2004
Prepared by BIZPRO 21
TABLE 1-14. CERAMIC WARE PRODUCTION STRUCTURE AND VOLUME IN 2004, PRODUCTION
UNITS
Code Materials and products 2004
26.26.10 Refractory products, thousand tons 1351.7
Other ceramic refractory products, unfired; commercial-grade ceramic 348.6
26.26.14
refractory products, not included in other categories, thousand tons
26.30.10 Ceramic slabs and tiles, thousand m2 16972.4
Other non-refractory building ceramic wares, including deflectors, bricks for 0.2
26.40.12.700 chimneys, caps for chimneys, architectural decorations, fan grills, thousand
tons
Ceramic pipes, pipelines, water removal lines, drainage piping, ducts and 0.2
26.40.13
connecting pieces for pipes, thousand tons
Based on performance results and according to the following key producers can be noted:
the Statistical Classification of Products (SCP),
TABLE 1-15. KEY PRODUCERS
Producer Region Product
OJSC Zaporizhzhya Ceramic refractory products
ZAPORIZHVOHNETRYV
OJSC PANTELEIMONIVKA Urban-type settlement Ceramic refractory products
REFRACTORY PLANT Panteleimonivka, Horlivka, Donetsk
Oblast
OJSC CHASIV YAR CHASIV YAR, DONETSK OBLAST Ceramic refractory products
INTEGRATED
REFRACTORY PLANT
OJSC KRASNOHORIVKA KRASNOHORIVKA, MARYINSKY Ceramic refractory products
REFRACTORY PLANT RAYON, DONETSK OBLAST
OJSC VELYKOANADOLSKY URBAN-TYPE SETTLEMENT Ceramic refractory products
INTEGRATED VOLODYMYRIVKA, VOLNOVASKY
REFRACTORY WORKS RAYON, DONETSK OBLAST
OJSC KRASNOARMIYSK KRASNOARMIYSK, DONETSK Ceramic refractory products
SILICA PLANT OBLAST
OJSC KINDRATIVSKY URBAN-TYPE SETTLEMENT Ceramic refractory products
REFRACTORY PLANT OLKSIYIVO-DRUZHKIVKA,
DRUZHKIVKA, DONETSK OBLAST
CALDERIS UKRAINA LTD URBAN-TYPE SETTLEMENT Ceramic refractory products
VOLODYMYRIVKA, VOLNOVASKY
RAYON, DONETSK OBLAST
OJSC TECHMET DONETSK Ceramic refractory products
SCIENTIFIC AND
PRODUCTION
ENTERPRISE
SIVERSKY DOLOMIT LTD SIVERSK, ARTEMIVSKY RAYON, Ceramic refractory products
DONETSK OBLAST
DONBAK-MIKS INDUSTRIAL DONETSK Ceramic refractory products
AND COMMERCIAL
COMPANY LTD
CJSC BILOKAMENSKI SOLEDAR, DONETSK OBLAST Ceramic refractory products
REFRACTORIES
SE CJSC IZOSEV-1 IZOSEV SIVERSK, ARTEMIVSKY RAYON, Ceramic refractory products
DONETSK OBLAST
KALTOP ENTERPISE LLC DONETSK Ceramic refractory products
MYKHAILIVSKE SETTLEMENT MYKHAILIVSKE, Ceramic refractory products
REFRACTORIES PLANT KRASNOPILSKY RAYON, SUMY
OBLAST
FEMATEK-UKRAYINA LTD DNIPROPETROVSK Ceramic refractory products
OGNEUPOR-M SCIENTIFIC DNIPROPETROVS’K Ceramic refractory products
AND PRODUCTION
CENTER LTD
Prepared by BIZPRO 22
Producer Region Product
CJSC YASYNUVATA YASYNUVATA, DONETSK Ceramic refractory products
REINFORCED CONCRETE OBLAST
PLANT
TAYIS PRIVATE SETTLEMENT Ceramic refractory products
ENTERPRISE KHRYSTOFORIVKA,
KRYVORIZKY RAYON,
DNIPROPETROVS’K OBLAST
OJSC KHRYSTOFORIVKA SETTLEMENT Ceramic refractory products
REFRACTORY BLOCKS KHRYSTOFORIVKA,
AND CONCRETE PLANT KRYVORIZKY RAYON,
DNIPROPETROVS’K OBLAST
ZIRCON REFRACTORY VILNOHIRSK, Ceramic refractory products
PLANT LTD DNIPROPETROVS’K OBLAST
OJSC MAIDAN-VYLSKY VILLAGE MYKHAILYUCHKA, Ceramic refractory products
INTEGRATED SHEPETIVSKY RAYON,
REFRACTORY WORKS KHMELNYTSKY OBLAST
CJSC KERAMPERLIT Kyiv Ceramic refractory products
PLANT
BURTYN REFRACTORIES VILLAGE BURTYN, POLONSKY Ceramic refractory products
PLANT COLLECTIVE RAYON, KHMELNYTSKY OBLAST
ENTERPRISE
POLONNE DECORATIVE POLONNE, KHMELNYTSKY Other ceramic ware
CERAMICS PLANT OBLAST
SE BUDSERVIS, OJSC VILLAGE ROZVADIV, Other ceramic ware
ROZVADIVBUDMATERIALY MYKOLAYIVSKY RAYON, LVIV
OBLAST
CJSC SLAVUTA SLAVUTA, KHMELNYTSKY Ceramic sanitary ware
BUDFARFOR INTEGRATED OBLAST
WORKS
DNIPROKERAMIKA LTD POLOHY, ZAPORIZHZHYA Ceramic sanitary ware
OBLAST
KERAMLINE LTD DRUZHKIVKA, DONETSK OBLAST Ceramic sanitary ware
KHARKIVSKA KERAMIKA KHARKIV Ceramic tiles
LTD
CJSC LVIV CERAMICS LVIV Ceramic tiles
PLANT
CJSC ZEVS KERAMIKA SLOVYANSK, DONETSK OBLAST Ceramic tiles
ЗА Т "ЗЕВС КЕРАМІКА"
CJSC WITH FOREIGN KYIV Ceramic tiles
INVESTMENTS
“PIASTRELLA-K” "
NOTA KERAMIKA PRIVATE DNIPROPETROVSK Ceramic tiles
ENTERPRISE
KARPATSKA KERAMIKA KALUSH, IVANO-FRANKIVSK Ceramic tiles
LTD OBLAST
MAKROINDUSTRIA LTD DNIPROPETROVSK, SAMARSKY Ceramic tiles
WITH FOREIGN RAYON
INVESTMENTS
SE OJSC CONSTRUCTION VILLAGE ZAGVIZDYA, Ceramic tiles
MATERIALS ZAGVIZDYA TYSMENYTSKY RAYON, IVANO-
DALLE FRANKIVSK OBLAST
CHMP FAGOT LUHANSK OBLAST Ceramic tiles
VELES INDUSTRIAL AND DONETSK Ceramic tiles
TRADE COMPANY LTD
OJSC MONASTYRYSKA MONASTYRYSKA, Ceramic tiles
CONSTRUCTION MONASTYRYSKY RAYON,
MATERIALS PLANT TERNOPIL OBLAST
AUTHORITY
Prepared by BIZPRO 23
Production of Cement, Concrete, Lime, and (Dnipropetrovs’k Oblast), which increased
Plaster production by 5%, to 1.4 million tons2. The highest
output growth rates in 2005 were registered by the
The cement industry has the following following companies, which resumed operation in
characteristic features1:1. Its existing production 2004: Cement Donbasu Ltd., which produced
capacity is underused. 210,000 tons of cement, nearly tripling the
2. Some 60% of cement production is controlled previous year’s output; and OJSC Volyn-Cement
by foreign companies: Lafarge, Heidelberg and (Rivne Oblast), which boosted cement output by
Dyckerhoff. 35.6%, to 1.37 million tons. Also deserving of
citation is OJSC Dniprocement (Dnipropetrovs’k
3. Output increased by 20% in 2004, with Oblast), which produced 546.6 million tons of
estimated growth of 25% for 2005. cement, or 25.5% more than in the previous year.
According to the Ukrcement industry association,
4. Market structure in 2004 broke down thus: the total capacity of all cement plants was
export 10%; domestic consumption 90%; no 21,102,000 tons as of April 1, 2006. There were
imports. 12,144,000 tons produced in 2005, which
amounts to 57.5% of total capacity.
5. Existing duties prevent imports from Russia.
Statistics show an average annual increase of
6. Prices increased by 20% in 2004, due to
cement, concrete, plaster, and lime output of
growing demand and increase in production costs.
about 30% in 2000-2004. Some slowing of the
In the opinion of experts, cement plants are growth rate was recorded in 2002 and 2003, with
attractive assets at the moment. As building only 19%, vs. 26% in previous years. According to
volume grows, it requires growth in the building Ukrcement, production of cement increased by
industry’s base sector. Ukrainian cement plants 14.6% in 2005 against 2004, to 12,183,000 tons;
increased their output by 13.4% to 12.144 million and by 7.6% in January-May 2005 compared to
tons in 2005. the same period in 2005, to 4.31 million tons.
The cement production leaders, both in 2005 and Key Producers of Cement, Concrete, Lime,
in 2004, included OJSC Balcem, which produced and Plaster
2.129 million tons of cement (21.4% more than in
As of the first half of 2005, there were 32
2004); OJSC Podolcement (Khmelnytsky Oblast),
enterprises with core activity in this sector. The
which increased production by 3.4%, to 1.856
leading enterprises are listed in Table 1.16.
million tons; and OJSC Kryvyi Rih – Cement
_____________________
1
“Proizvodstvo stroitelnykh materialov v Ukrainye: obzor strategiy vykhoda na rynok” (Production of Construction Materials in
Ukraine: Review of Market Entry Strategies), National Investment Alliance, February 2005
2
Daidzhest torhovtsya budivelnymy materialamy (Construction Materials Trader’s Digest) / pau.kiev.ua
Prepared by BIZPRO 24
FIGURE 1-11. CEMENT, LIME, AND PLASTER PRODUCTION VOLUME IN 2000-2003, HR MILLION
26111,4
120749,0
19148,9
17551,4 105856,1
Hr million
102430,4
13618,4
108856,3 1434611,1
1138336,0
926295,3
642118,6
TABLE 1-16. CEMENT, LIME, AND PLASTER PRODUCTION STRUCTURE AND VOLUME IN 2000-
2003, PRODUCTION UNITS
Code Materials 2000 2001 2002 2003
702000 Cement, thousand tons 5311.4 5786.3 7156.5 8922.7
702002 Including: cement made of clinker produced with 1365.1 1385.4 1304.9 1635.9
energy-saving technology, thousand tons
702004 Including cement made using “dry” process, thousand 1365.1 1385.4 1304.9 1635.9
tons
702013 Of total cement: grade 300 cement, thousand tons 0.7 0.2 16.5 -
702014 Grade 400 cement, thousand tons 4331.8 4729.5 5609.3 7097.6
702015 Grade 500 cement, thousand tons 748.3 750.8 1203.0 1628.4
702016 Grade 550 cement, thousand tons - - 0.2 0.2
702017 Grade 500 cement, thousand tons 0.2 0.2 0.5 0.3
702101 Of total cement: Portland cement, thousand tons, total 4236.4 4478.6 5375.8 6954.4
702111 Slag Portland cement, thousand tons, total 1039.6 1254.9 1739.0 1967.3
703110 Portland cement (without additives), thousand tons 354.3 331.1 652.9 935.2
703130 Portland cement for making asbestos cement products, 500.1 528.9 623.0 686.6
thousand tons
703140 Sulfate resistant Portland cement (including that with 6.1 14.3 11.1 27.8
barium), thousand tons
703150 Portland cement with mineral additives, thousand tons 2958.7 3505.2 3869.6 5062.0
703160 Rapid-hardening Portland cement, thousand tons 388.6 77.2 190.5 215.2
703170 Road Portland cement, thousand tons 10.7 17.5 17.9 4.1
703240 Common slag Portland cement, thousand tons 1011.0 1208.0 1649.4 1780.5
703250 Sulfate resistant slag Portland cement, thousand tons 28.6 47.0 89.7 186.8
703330 Alumina cement, thousand tons 0.5 0.4 0.5 0.8
703340 Expanding cement, thousand tons 0.1 0.1 0.2 0.2
703360 Oil-well cement, thousand tons 46.6 49.4 43.5 13.8
703490 Other cement types (for casting of concrete without 5.1 7.2 5.4 9.7
forms, etc.), thousand tons
703500 Calibrated cement, thousand tons 766.6 669.2 1075.3 1521.5
705001 Building lime, thousand tons 581.1 506.5 531.9 594.6
705011 Production lime, thousand tons 3050.3 3433.6 3924.2 4301.3
705012 Including production lime for making construction 220.6 219.3 207.3 223.8
materials, thousand tons
705021 Plaster stone, thousand tons 304.8 378.8 429.4 709.7
705041 Plaster, thousand tons 119.0 151.1 206.9 264.3
705052 Including building plaster, thousand tons 104.7 138.9 192.5 248.1
705053 Casting plaster, thousand tons 7.7 8.0 11.5 13.7
Prepared by BIZPRO 25
TABLE 1-17. CEMENT, CONCRETE, LIME, AND PLASTER PRODUCTION STRUCTURE AND
OUTPUT IN 2004
Production Hr million
Code Materials
units
14.12.10.300 Plaster and anhydrite (natural or synthetic), thousand tons 1153.8 20828.5
14.12.10.500 Limestone (except crushed limestone filler and limestone 21275.0 300202.0
cut to measure), thousand tons
14.12.20.300 Uncalcined dolomite (except crushed dolomite filler), 10.8 379.2
thousand tons
14.12.20.500 Calcined and fired dolomite, thousand tons 243.0 114277.7
14.12.20.700 Agglomerated dolomite (including petrolized dolomite), 1130.8 16060.8
thousand tons
26.26.13 Refractory cement, mortar, concrete, and similar mixtures, 262.5 62914.6
thousand tons
26.63.10 Ready-mixed concrete, thousand tons 9273.9 655573.8
26.64.10 Building mortar and concrete, except ready-mixed concrete, 2231.2 310917.6
thousand tons
26.51.12 Cement, thousand tons 10647.8 1606848.0
26.52.10 Lime, thousand tons 5243.0 130853.0
26.53.10 Plaster mixes, thousand tons 155.8 49672.0
TABLE 1-18. KEY PRODUCERS OF CEMENT, CONCRETE, LIME, AND PLASTER
Producer Region Product
OJSC Dniprocement (owned by Dniprodzerzhinsk, Production of cement
Heidelberg Cement, Germany) Dnipropetrovs’k Oblast
Dnipropetrovs’k Cement Plant Village Partyzanske, Production of cement
Dnipropetrovs’k Rayon,
Dnipropetrovs’k Oblast
CJSC BAKHZHYSARAI BAKHCHYSARAI, Production of cement
BUDINDUSTRIA INTEGRATED BAKHCHYSARAI RAYON,
WORKS AR CRIMEA
OJSC Yenakiyeve Cement Plant Yenakiyeve, Donetsk Production of cement
Oblast
Kramatorsk Pushka Plant Kramatorsk, Donetsk Production of cement
Oblast
Doncement (owned by Heidelberg Urban-type settlement Production of cement
Cement, Germany) Novoamvrosiyivske,
Amvrosiyivsky Rayon,
Donetsk Oblast
Cement Donbasu Ltd. (owned by YENAKIYEVE, DONETSK Production of cement
Heidelberg Cement, Germany) OBLAST
CEMLINE LTD UKRAYINKA, OBUKHIV Production of cement
RAYON, KYIV OBLAST
Kryvyi Rih Cement Plant (owned by Kryvyi Rih, Dnipropetrovsk Production of cement
Heidelberg Cement, Germany) Oblast
Kharkiv Experimental Cement Plant Kharkiv Production of cement
Balcem (owned by Balakliya, Balakliya Rayon, Production of cement
EUROCEMENTGrop, Russia) Kharkiv Oblast
Ivano-Frankivskcement Ivano-Frankivsk Production of cement
Mykolaivcement (owned by Lafarge, Mykolaiv, Mykolaiv Rayon, Production of cement
France) Lviv Oblast
Volyn Cement (owned by Zdolbuniv, Rivne Oblast Production of cement
Dickerhoff-Ukraine)
Podilsky Cement (owned by CRH, Village Humentsi, Production of cement
Ireland) Kamyanets-Podilsky
Rayon, Khmelnytsky Oblast
Kyivcement (owned by Dickerhoff- Kyiv Production of cement
Ukraine)
Odesa Cement Plant Odesa Production of cement
Prepared by BIZPRO 26
Producer Region Product
Yug Cement (owned by Dickerhoff- Urban-type settlement Production of cement
Ukraine) Vilshanske, Mykolaiv
Rayon, Mykolaiv Oblast
OJSC Kramatorsk Cement and Kramatorsk, Luhansk Production of cement and clinker
Slate Integrated Works (owned Oblast
EUROCEMENTGroup, Russia)
OJSC Kryvyi Rih Cement and Kryvyi Rih, Dnipropetrovsk Production of cement and clinker
Mining Integrated Works Oblast
Knauff Gips Donbas Ltd. SOLEDAR, DONETSK Production of plaster
OBLAST
CJSC STROMGIPS FIRM ARTEMIVSK, DONETSK Production of plaster
OBLAST
OJSC KAMYANETS-PODILSKY KAMYANETS-PODILSKY, Production of plaster
GIPSOVYK KHMELNYTSKY OBLAST
AKS I K MANUFACTURING AND DNIPROPETROVSK Production of plaster
COMMERCIAL FIRM LTD
OJSC MYKYTIVSKY ALABASTER HORLIVKA, DONETSK Production of plaster
INTERGRATED WORKS OBLAST
OJSC Mamalyhivsky Plaster Plant Chernivtsi Oblast Production of plaster
OJSC Slovyansk Chalk and Lime Slovyansk Production of lime
Plant
OJSC Lyubomyr Lime and Silicate Lyubomyr Production of lime
Plant
OJSC Zaporizhzhya Construction Zaporizhzhya Production of lime
Materials Plant
LETAN PRODUCTION AND DNIPROPETROVSK Production of lime
COMMERCIAL FIRM LTD
CJSC INDUSTRIA URBAN-TYPE Production of lime
SETTLEMENT
KUSHUHUM,
ZAPORIZHZHYA RAYON,
ZAPORIZHZHYA OBLAST
AZOVBUDMATERIALY MARIUPOL, DONETSK Production of lime
COLLECTIVE ENTERPRISE FIRM OBLAST
LIME FACTORY LTD DNIPROPETROVSK Production of lime
OJSC PRYBORZHAVSKE VILLAGE Production of lime
CONSTRUCTION MATERIALS PRYBORZHAVSKE,
PLANT AUTHORITY IRSHAVA RAYON,
ZAKARPATSKA OBLAST
HALPROMTEKS COMPANY LTD ROHATYN, ROHATYN Production of lime
RAYON, IVANO-
FRAMKIVSK OBLAST
OJSC PUSTOMYTY LIME PLANTS POSTOMYTY, Production of lime
AUTHORITY PUSPOMYTY RAYON,
LVIV OBLAST
KVADRO-L LTD VILLAGE ROZVADIV, Production of lime
MYKOLAIV RAYON, LVIV
OBLAST
OJSC PODILSKI TOVTRY VILLAGE VERBKA, Production of lime
KAMYANETS-PODILSKY,
KHMELNYTSKY OBLAST
BILOKRYNYTSKY LIME PLANT URBAN-TYPE Production of lime
LTD SETTLEMENT
KARYERNE,
VELYKOOLEKSANDRIVS
KY RAYON, KHERSON
OBLAST
VAPNYARKA PRIVATE VILLAGE NAVARIA, Production of lime
ENTERPRISE PUSTOMYTY RAYON,
LVIV OBLAST
Prepared by BIZPRO 27
Producer Region Product
SE BILOKRYNYTSKY LIME URBAN-TYPE Production of lime
PLANT SETTLEMENT
KARYERNE,
VELYKOOLEKSANDRIVS
KY RAYON, KHERSON
OBLAST
CJSC FORUM-DS KYIV Production of ready-mixed
concrete
PIDRYAD LTD VYSHNEVE, KYIV Production of ready-mixed
OBLAST concrete
OJSC ASPHALT CONCRETE KHUTIR OSTRIV, Production of ready-mixed
PLANT HOLOSIYIVSKY RAYON, concrete
KYIV
KOMFORTBUD-1 BUILDING LVIV Production of ready-mixed
COMPANY LTD concrete
OJSC REINFORCED CONCRETE KYIV Production of ready-mixed
AND ROAD BUILDING concrete
MATERIALS PLANT
S.K.S.M. LTD KHARKIV Production of ready-mixed
concrete
AGROPROMSHLYAKHBUDINDUS VINNYTSYA Production of ready-mixed
TRIA COLLECTIVE ENTERPRISE concrete
FIRM
KOMPLEKT LTD MARIUPOL, DONETSK Production of ready-mixed
OBLAST concrete
BETONIKS PRODUCTION AND KHARKIV Production of ready-mixed
COMMERCIAL ENTERPRISE LTD concrete
CJSC BETONEKS URBAN-TYPE Production of ready-mixed
SETTLEMENT concrete
VELYKODOLYNSKE,
OVIDIOPOL RAYON,
ODESA OBLAST
OJSC TERNOPIL ROAD URBAN-TYPE Production of ready-mixed
BUILDING MATERIALS SETTLEMENT VELYKA concrete
INTEGRATED WORKS BEREZOVYTSYA,
TERNOPIL RAYON,
TERNOPIL OBLAST
SATURN PK LTD KYIV Production of ready-mixed
concrete
DNIPROBUDKOMPLEKT DNIPROPETROVSK Production of ready-mixed
SCIENTIFIC AND PRODUCTION concrete
ENTERPRISE LTD
LVIV CONCRETE PLANT LVIV Production of ready-mixed
PRODUCTION ENTERPRISE LTD concrete
BETON-SERVIS LTD ODESA Production of ready-mixed
concrete
PE AVROSHLYAKHBUD-SAA MYKOLAIV Production of ready-mixed
BUILDING FIRM concrete
NOVODNISTROVSK CONCRETE NOVODNISTROVSK, Production of ready-mixed
AND MORTAR PLANT LTD CHERNIVTSI OBLAST concrete
INZHPROMBUDSERVIS FASTIV, KYIV OBLAST Production of ready-mixed
PRODUCTION LTD concrete
BUDMATERIALY PLUS LTD DNIPROPETROVSK Production of ready-mixed
concrete
CJSC DNIPROSPETSBUD ZAPORIZHZHYA Production of ready-mixed
concrete
FASAD LTD RIVNE Production of ready-mixed
concrete
STANDARD-IF COMMERCIAL IVANO-FRANKIVSK Production of ready-mixed
ENTERPRISE LTD concrete
Prepared by BIZPRO 28
Producer Region Product
PE ASFALT VILLAGE MARYANIVKA, Production of ready-mixed
KRYVYI RIH RAYON, concrete
DNIPROPETROVSK
OBLAST
CJSC ASFALTOBETON MYKOLAIV Production of ready-mixed
concrete
ENERGETYK LTD KHARKIV Production of ready-mixed
concrete
OJSC VINNYTSYA ASPHALT VINNYTSYA Production of ready-mixed
CONCRETE PLANT concrete
TMM-BUDKOMPLEKT LTD KYIV Production of ready-mixed
concrete
SE BUDSUMISHI, OJSC ZHYTOMYR Production of ready-mixed
ZHYTOMYRINVEST FIRM concrete
ROSTA LTD KHARKIV Production of ready-mixed
concrete
KHARKIVBETON LTD KHARKIV Production of ready-mixed
concrete
CJSC BIAS ZAPORIZHZHYA Production of ready-mixed
concrete
BUDEKSTRA COMMERICLA AND LVIV Production of ready-mixed
PRODUCTION PRIVATE FIRM concrete
PE GAMA-TEKHNIKA KHMELNYTSKY Production of ready-mixed
concrete
OJSC CHERKASY ASPHALT CHERKASY Production of ready-mixed
CONCRETE PLANT concrete
BALANS SMALL ENTERPRISE PERVOMAISK, LUHANSK Production of ready-mixed
OBLAST concrete
DORSTROI LTD DONETSK Production of ready-mixed
concrete
MONOLITBETON LTD KRYVYI RIH, Production of ready-mixed
DNIPROPETROVSK concrete
OBLAST
LANIVTSI ASFALTBUD LTD LANIVTSI, LANIVTSI Production of ready-mixed
RAYON, TERNOPIL concrete
OBLAST
OJSC PIVDEN ASPHALT CHERKASY Production of ready-mixed
CONCRETE PLANT concrete
CJSC RAYAGROBUD BALAKLIYA, BALAKLIYA Production of ready-mixed
RAYON, KHARKIV concrete
OBLAST
Production of Concrete, Cement, and Plaster is 43 times as much as was invested in 2001 and
Products 2002. In 2001, investments had a negative value
Hr 0.8 million. In other words, foreign investors
The highest growth rate in concrete production withdrew part of their investment. This had an
was recorded in 2004, when it nearly tripled. This effect on the production growth rate, which saw a
rapid growth rate was in part catalyzed by foreign 4% increase in 2001 compared to 2000. The 2003
direct investmentsin this segment in 2003 and growth rate was 26%.
2004. This investment totaled Hr7.9 million, which
The production of concrete blocks is characterized 3. Actual productivity of not more than 50% the
by the following features (“Proizvodstvo rated level, given obsolete equipment.
stroitelnykh materialov v Ukrainye: obzor strategiy
vykhoda na rynok” (Production of Construction 4. Actual production is about 10%-12% of installed
Materials in Ukraine: Review of Market Entry productivity.
Strategies), National Investment Alliance, 5. Plants are located uniformly around the
February 2005): country.
1. Market growth of 10-12% in 2003-2004. 6. Production is complicated by poor supplies of
2. A production capacity that has risen crushed rock aggregate.
considerably.
Prepared by BIZPRO 29
FIGURE 1-12. PRODUCTION OF CONCRETE, CEMENT, AND PLASTER PRODUCTS IN 2000-2004,
HR MILLION
299,6
Hr million
99,1
77,5
53,2
31,5 3071,2
1975,2
1464,0 1544,6
1203,5
TABLE 1-19. PRODUCTION STRUCTURE AND VOLUME OF CEMENT, CONCRETE, AND PLASTER
PRODUCTS IN 2000-2003, PRODUCTION UNITS
Code Products 2000 2001 2002 2003
708032 Small wall blocks based on cement binder, million 25.3 21.6 21.9 29.5
equivalent bricks
708041 Large concrete and lime wall blocks (including 152.8 151.9 169.7 224.6
foundation wall concrete blocks), million equivalent
bricks
708071 Small porous concrete wall blocks, million 171.8 210.1 246.2 348.5
equivalent bricks
711001 Precast reinforced concrete structures and 2037.1 2127.7 2064.4 2376.8
products, thousand m3
711002 Including: lightweight and porous concrete 74.3 43.3 46.2 47.1
structures and products, thousand m3
711012 Prestressed structures and products, thousand m3 533.3 553.4 498.1 536.7
711122 Of the total volume of precast reinforced concrete 1606.5 1581.6 1629.2 1364.2
structures and products: reinforced concrete ties,
thousand pcs
711124 Of the total volume of precast reinforced concrete 1604.7 1577.5 1628.4 1364.2
structures and products: reinforced concrete ties
for wide-gauge track, thousand pcs
711125 Reinforced concrete poles for power and telecoms 53.6 129.1 52.7 72.2
transmission lines; railroad contact system and
lighting system components, thousand m3
711127 Reinforced concrete sections and tubing for 37.6 42.1 40.8 36.0
tunnels and mine supports, thousand m3
711129 Wall panels, thousand m3 189.4 164.2 163.2 165.9
711136 Reinforced concrete pipes, thousand m3 4.2 3.4 3.6 4.3
711182 Reinforced structures and products made of non- - 0.2 0.4 0.4
cement concrete, thousand m3
711184 Large-panel and apartment modular construction, 313.9 295.1 331.9 372.1
thousand m2 of total floor area
711189 Including external wall reinforced concrete panels 4.9 - 4.0 -
with flexible connections and efficient heat-
insulation (for housing construction), thousand m2
of total floor area
711190 Heat-resistant concrete prefabricated structures 0.2 0.3 - -
and products, thousand m3
711220 Non-reinforced concrete products, thousand m3 196.0 269.8 245.3 236.3
Prepared by BIZPRO 30
712101 Gypsum plasterboards, thousand m2 (equivalent 7253.4 11770.0 19580.9 26977.6
thickness of 10 mm)
712201 Partition plasterboards and panels, thousand m2 3.4 2.9 0.2 6.9
712211 Perforated soundproofing plaster plates, thousand 1.3 0.4 0.5 -
m2
TABLE 1-20. CEMENT, CONCRETE, LIME, AND PLASTER PRODUCTION STRUCTURE AND
VOLUME IN 2004, PRODUCTION UNITS
Code Products 2004
26.60.10 Wall building materials, million equivalent bricks 3476.9
26.61.11.310A Porous concrete blocks, million equivalent bricks 429.9
26.61.11.500A Tiles, slabs, roofing tiles, and similar cement, concrete or artificial stone 2812.5
products, thousand m2
26.61.12A Components of prefabricated structures for housing construction or civil 2723.5
engineering made of cement, concrete or artificial stone, thousand m3
26.61.13A Cement, concrete or artificial stone pipes, thousand m3 7.7
26.61.20A Prefabricated concrete buildings, thousand m2 3.1
26.62.10 Plaster products for housing construction or civil engineering, thousand 31435.1
m2
26.62.10.500 Plaster boards reinforced with paper or cardboard only, thousand m2 31412.1
26.62.10.900 Plaster blocks or plates or other products based on plaster mixes, 23.0
thousand m2
26.64.10 Building mortar and concrete, except ready-mixed concrete, thousand 2231.2
tons
26.65.11 Panels, plates, blocks, and similar products made of plant fibers or wood 3.1
waste, agglomerated with mineral binders, thousand m2
26.65.12.500A Pipes, unions, and connecting parts made of asbestos cement, cellulose 2013.5
fibrolite and similar materials, km of equivalent pipes
26.66.11 Plaster or plaster mix products, not otherwise categorized, tons 24303.0
Prepared by BIZPRO 31
products
37
TEKHPROM LTD MAKIYIVKA, HIRNYTSKY Production of fiber cement
RAYON, DONETSK OBLAST products
OJSC KHARKIV PLANT OF KHARKIV Production of fiber cement
INSULATING AND products
ASBESTOS-CEMENT
MATERIALS
OJSC AZBODEREVSKLO Kyiv Production of fiber cement
products
OJSC ZAPORIZHZHYA PLANT ZAPORIZHZHYA Production of fiber cement
OF ASBESTOS-CEMENT products
MATERIALS
SE PP KRYAZH URBAN-TYPE SETTLEMENT Production of fiber cement
KRASNOGVARDIYSKY KRASNOGVARDIYSKE, products
ASBESTOR SLATE PLANT KRASNOGVARDIYSKE RAYON,
AR CRIMEA
DELTA BUH FIRM LTD MYKOLAIV Production of fiber cement
products
CJSC Z II STROIMAK KNAUFF Kyiv Production of plaster products
for use in building
Obukhiv Porous Concrete Plant Kyiv Oblast Small porous concrete wall
blocks
Experimental Plant of Porous Bilhorod-Dnistrovsky, Odesa Small porous concrete wall
Concrete and Products Oblast blocks
Zhytomyr Silicate Products Zhytomyr Walling: lime-sand bricks,
Integrated Works porous blocks, heat-insulating
blocks, foundation blocks, wall
stones, concrete, mortar,
prefabricated reinforced
concrete components, wood
products, heat insulation
materials, lime, refractory
blocks for lime furnaces
More than 150 enterprises, the - Production of prefabricated
best known of which are: OJSC concrete and reinforced
SVITLANA KOVALSKA concrete products
REINFORCED CONCRETE
PLANT; REINFORCED
CONCRETE PLANTS NO.1,
NO.5; OJSC DARNYTSYA
REINFORCED CONCRETE
PLANT (KYIV); OJSC
BROVARY BUILDING
STRUCTURES PLANT (KYIV
OBLAST); CJSC BETON
NOVA (DONETSK OBLAST)
Production of Other Mineral Materials and - chalk; sand, pebbles, gravel, and crushed stone
Products aggregate; slag; kaolin and clay; andalusite,
kyanite, fibrolite, mulite; chamotte or silica earth;
The segment of other nonmetal mineral products
includes materials and products needed in the - salt and pure sodium chloride;
building industry and required for making other - natural bitumen and asphalt, asphalt and asphalt
construction materials and products. These rock;
materials and products, however, have smaller - natural minerals;
production and sales volumes than materials and
products in other segments. It thus seems - panels, slabs, blocks, and similar products made
reasonable to consolidate them into one segment. of plant fibers or wood waste, agglomerated with
Other nonmetal mineral products groups includes: mineral binding materials;
- pipes, unions, and coupling parts f made of
- stone and stone products; asbestos cement, cellulose fibrolite and similar
- granite; materials;
Prepared by BIZPRO 32
- natural powders or artificial abrasives or grain; According to State Statistics Committee data,
production of the following products declined in
- treated asbestos fiber; asbestos-based mixtures; 2004 as compared with 2003:
products made of such mixtures; friction material
for brakes, clutches, and similar products, - blends and products made of heat-insulating or
unassembled; sound-proofing materials; and
- bituminous mixtures based on natural asphalt, oil - treated mica and mica products.
asphalt, mineral tar or mineral pitch; This period also saw a significant increase in
- slag wool, silicate rock wool and similar rock production of the following materials:
wools (including blends) in blocks, sheets or rolls;
- marble and travertine;
- blends and products made of heat-insulating or
sound-proofing materials; - limestone, gypsum and limestone alabaster;
- treated mica and mica products. - sandstone,
- products made of other stones;
The following subgroups had the largest shares in
the segment of other mineral materials and - delaminated vermiculite, expanded clay, foam
products in 2004 (in monetary units): slag, and expanded mineral products (including
mixtures);
Various types of building sand, pebbles, gravel, - non-electrical articles made of graphite or other
and crushed stone aggregate – 40%; carbon materials;
Stone products – 23%; - chalk;
Other types of clay, andalusite, mulite, chamotte - natural minerals;
or silica earths – 10%; - panels, slabs, blocks and similar products made
of plant fibers or from wood waste agglomerated
Bituminous mixtures based on natural asphalt, oil with mineral binding substances;
asphalt, mineral tar or mineral pitch – 9%
- pipes, unions, and connecting parts for them
Others – below 2%. made of asbestos cement, cellulose fibrolite, and
similar materials;
- bituminous mixtures based on natural asphalt, oil
asphalt, mineral tar or mineral pitch.
Prepared by BIZPRO 33
26.82.16.700 Non-electrical articles made of graphite or other 5.3 10.5 197.1%
carbon materials, thousand tons
14.12.20.100 Chalk, thousand tons 1217.0 1513.6 124.4%
14.21.10A Sand, pebbles, gravel, and crushed rock 40509.9 45580.8 112.5%
aggregate for building purposes, thousand m3
14.21.11.900 Other building sands (metalliferous sand), 5365.6 5680.9 105.9%
A thousand m3
14.21.11A Natural sands, thousand m3 6989.1 7445.5 106.5%
14.21.13A Building slag, thousand m3 295.8 354.0 119.7%
14.22.11 Kaolin and other kaolin clay, thousand tons 1176.4 1468.1 124.8%
14.22.12 Other clays, andalusite, kyanite, fibrolite, mulite, 7163.6 7771.8 108.5%
chamotte or silica earths, thousand tons
14.30.13 Other natural minerals for the chemical industry, 23.9 23.6 98.9%
thousand tons
14.40.10.000 Salt and sodium chloride pure, thousand tons. 2906.4 3339.4 114.9%
14.50.10.000 Natural bitumen and asphalt, asphaltites and 0.4 0.003 0.8%
asphalt rock, thousand tons.
14.50.23 Natural minerals, not otherwise categorized, 1077.1 1632.1 151.5%
thousand tons
26.65.11 Panels, slabs, blocks, and similar products made 1.3 3.1 238.5%
of plant fibers or wood waste agglomerated with
mineral binding substances, thousand m2
26.65.12.500 Pipes, unions, and connecting parts for them 1491.0 2013.5 135.0%
A made of asbestos cement, cellulose fibrolite and
similar materials, km of equivalent pipes
26.81.12.300 Natural powders or artificial abrasives or grain on 1148.3 1227.1 106.9%
textile base, thousand m2
26.81.12.500 Natural powders or artificial abrasives or grain on 178.8 209.1 116.9%
paper or cardboard base, thousand m2
26.81.12.900 Natural powders or artificial abrasives or grain on 12.7 12.7 100.0%
basis of other materials, thousand m2
26.82.11 Treated asbestos fibers; asbestos-based mixtures; 7.0 7.0 100.9%
products based on such mixtures; friction material
for brakes, clutches, and similar articles,
unassembled, thousand tons
26.82.13 Bituminous mixtures based on natural asphalt, 2517.3 3230.7 128.3%
petroleum asphalt, mineral tar or mineral pitch,
thousand tons
26.82.16.100 Slag wool, silicate mineral wool, and similar 296.0 293.2 99.1%
A mineral wools (including blends) in blocks, sheets
or rolls, thousand m3
26.82.16.300 Blends and products made of heat-insulating or 172.3 129.6 75.2%
A sound-proofing materials, not otherwise
categorized, thousand m3
26.82.16.500 Treated mica and mica products, thousand tons 0.011 0.006 54.5%
Key Producers in Other Mineral Products the nonmetal construction materials sector
Segment segments above. Note should be made of the
companies among them that are leaders in terms
There are more than 600 producers of mineral of sales income, according to SCP (Table 1-23).
materials in this segment that are not included in
Prepared by BIZPRO 34
TABLE 1-23. KEY PRODUCERS OF OTHER MINERAL PRODUCTS AND MATERIALS
Producer Region Product
CJSC BILYCHI Mining Extractive Urban-type settlement Stone dressing
Stone Dressing Integrated Works Kotsyubynske, Kyiv Oblast
OMFAL Stone Dressing Plant Shakhtarsk, Donetsk Oblast Stone dressing
Budynok Marmuru Kyiv Oblast Production of marble, granite,
and artificial stone articles
OJSC Yantsevsky Granite Quarry; Ukraine Granite mining and dressing
CJSC Kapustyansky Granit; CJSC
Holovynsky Granite Quarry; CJSC
Omelyanivsky Granite Quarry; OJSC
Oleksandrivsky Granite Quarry; OJSC
Pervomaisky Granite Quarry; JSC
OJSC Starobabansky Granite Quarry
Sava Teks Dekor Production of artificial stone,
marble articles, dressing of
sandstone, shale, and quartz
OJSC TRIBO Bila Tserkva, Kyiv Oblast Production of other nonmetal
mineral products, not otherwise
categorized
BLASTO LTD Kremenchuk, Poltava Production of other nonmetal
Oblast mineral products, not otherwise
categorized
EDELVEIS LTD Podvirky, Kharkiv Oblast Production of other nonmetal
mineral products, not otherwise
categorized
OJSC ENERGORESURS LVIV Production of other nonmetal
UKRAINIAN-POLISH JV mineral products, not otherwise
categorized
OJSC MARGANETS EXPANDED MARGANETS, Production of other nonmetal
CLAY GRAVEL PLANT DNIPROPETROVSK mineral products, not otherwise
OBLAST categorized
PROMTEKS LTD URBAN-TYPE Production of other nonmetal
SETTLEMENT, KHARKIV mineral products, not otherwise
RAYON, KHARKIV categorized
OBLAST
DONHOLDING LTD AVDIYIVKA, DONETSK Production of other nonmetal
OBLAST mineral products, not otherwise
categorized
OMEGA MINERALS UKRAINE LTD MYRONIVKA, Production of other nonmetal
MYRONIVKA RAYON, mineral products, not otherwise
KYIV OBLAST categorized
CJSC BILYCHI URBAN-TYPE Production of other nonmetal
TEPLOZVUKOIZOLYATSIA PLANT SETTLEMENT mineral products, not otherwise
KOTSYUBYNSKE, IRPIN, categorized
KYIV OBLAST
ADSORBENT PLANT LTD SVITLOVODSK Production of other nonmetal
mineral products, not otherwise
categorized
OJSC MARIUPOL GRAPHITE MARIUPOL, DONETSK Production of other nonmetal
INTEGRATED WORKS OBLAST mineral products, not otherwise
categorized
CHERNIVTSI HEAT-INSULATING CHERNIVTSI Production of other nonmetal
MATERIALS PLANT PRODUCTION mineral products, not otherwise
AND COMMERCIAL ENTERPRISE categorized
LTD
OJSC YAVORIV CONSTRUCTION URBAN-TYPE Production of other nonmetal
MATERIALS PLANT AUTHORITY SETTLEMENT SHKLO, mineral products, not otherwise
YAVORIV RAYON, LVIV categorized
OBLAST
Prepared by BIZPRO 35
Producer Region Product
SE EXPLOSION-PROOF AND DOKUCHAYEVSK, Production of other nonmetal
BINDING MATERIALS ENTERPRISE DONETSK OBLAST mineral products, not otherwise
categorized
UTYLIZATOR-2 LTD KHARKIV Production of other nonmetal
mineral products, not otherwise
categorized
KHMELNYTSKY EXPANDED CLAY VILLAGE SHAROVECHKA, Production of other nonmetal
AGGREGATE PLANT KHMELNYTSKY RAYON, mineral products, not otherwise
KHMELNYTSKY OBLAST categorized
OJSC KALYNIVKA BUDPERLIT URBAN-TYPE Production of other nonmetal
PLANT SETTLEMENT mineral products, not otherwise
KALYNIVKA, BROVARY categorized
RAYON, KYIV OBLAST
BASALT PRODUCTS PLANT LTD DNIPROPETROVSK Production of other nonmetal
mineral products, not otherwise
categorized
OJSC ZHYTOMYR ROOFING AND ZHYTOMYR Production of other nonmetal
INSULATING MATERIALS PLANT mineral products, not otherwise
categorized
CJSC SAMBIR EXPANDED CLAY VILLAGE VYKOTY, Production of other nonmetal
PLANT SAMBIR RAYON, LVIV mineral products, not otherwise
OBLAST categorized
KERAMZYT PRODUCTION COOP KHARKIV Production of other nonmetal
mineral products, not otherwise
categorized
PINOPOLISTYROL LTD VINNYTSYA Production of other nonmetal
mineral products, not otherwise
categorized
OJSC SVITLOVODSK HEAT- URBAN-TYPE Production of other nonmetal
INSULATING AND CONSTRUCTION SETTLEMENT VLASIVKA, mineral products, not otherwise
MATERIALS PLANT SVITLOVODSK, categorized
KIROVOHRAD OBLAST
OJSC KERAMZYT PLANT VINNYTSYA Production of other nonmetal
mineral products, not otherwise
categorized
TEMARA LTD STRYI, LVIV OBLAST Production of other nonmetal
mineral products, not otherwise
categorized
OJSC KYIV Production of other nonmetal
UKRTSUKORTEPLOIZOLYATSIYA mineral products, not otherwise
categorized
KHIMVISKPROM LTD VILLAGE KOMINTERN, Production of other nonmetal
OLEKSANDRIYA RAYON, mineral products, not otherwise
KIROVOHRAD OBLAST categorized
OJSC KIROVOHRAD MECHNICAL VILLAGE Production of other nonmetal
PLANT PERVOZVANIVKA, mineral products, not otherwise
KIROVOHRAD RAYON, categorized
KIROVOHRAD OBLAST
OJSC ZIM MARIUPOL, DONETSK Production of other nonmetal
OBLAST mineral products, not otherwise
categorized
KIROVOHRAD EXPANDED CLAY KYIV Production of other nonmetal
AGGREGATE PLANT LTD mineral products, not otherwise
categorized
CJSC UKRAINIAN SULICATE KHERSON Production of other nonmetal
mineral products, not otherwise
categorized
STATE ENTERPRISE VILLAGE BORONYAVO, Production of other nonmetal
SOKYRNYTSKY ZEOLITE PLANT KHUST RAYON, mineral products, not otherwise
ZAKARPATSKA OBLAST categorized
Prepared by BIZPRO 36
Producer Region Product
OJSC TOMAKIVKA EXPENDED URBAN-TYPE Production of other nonmetal
CLAY GRAVEL PLANT SETTLEMENT mineral products, not otherwise
TOMAKIVKA, TOMAKIVKA categorized
RAYON,
DNIPROPETROVSK
OBLAST
OJSC LVIVPOKIZOL PRODUCTION LVIV Production of other nonmetal
ASSOCIATION OF INSULATING mineral products, not otherwise
AND MAJOLICA ARTICLES categorized
OJSC ODESA EXPANDED CLAY ODESA Production of other nonmetal
AGGREGATE PLANT mineral products, not otherwise
categorized
OJSC Kombinat Budindustriyi Kyiv Production of heat-insulating
products
Dnipropetrovsk Heat-insulating and Settlement Yuvileiny, Production of heat-insulating
Basalt Products Plant Ltd. Dnipropetrovsk Oblast products
NPP Dobrobut Ltd. Kyiv Production of heat-insulating
products
OJSC Insulating Materials Plant Mariupol, Donetsk Oblast Production of heat-insulating
products
OJSC IZOLYATSIYA DONETSK Production of heat-insulating
products
CJSC Stirol-Pak Horlivka, Donetsk Oblast Production of heat-insulating
products
UkrPinoPolyEthylen Ltd. Kharkiv Production of heat-insulating
products
OJSC Tsentralna Budivelna Kyiv Production of heat-insulating
Kompania products
Production of Varnishes and Paints products are being developed, including brick and
concrete and interior paints, primers, and
The Ukrainian varnish and paint market’s capacity varnishes. In particular, Nifar added to their range
is still quite small compared to that of EU water dispersion paints and primers under the
member-states. While in the EU countries per Snizhyna and Snizhyna-Luks brands. The Yantar
capita paint sales reach 12 kg (Kontrakty company, based in Korosten’, has made water
Ukrainian business weekly, No. 15 of 11 April dispersion paints its core product, and the Akzo
2005), and in the most prosperous of EU states Nobel Company put water-thinned primer and
(e.g., UK), they can be as high as 20 kg, in varnish, under the Pinotex Aqua brand, on the
Ukraine market players barely managed to reach market.
the level of 4.4-4.5 kg in 2004. According to expert
estimates, the Ukrainian varnish and paint market According to Henkel Bautechnik (Ukraine), brick
reached a production volume of 280,000-290,000 and concrete paints account for 10%-15% of the
tons in 2004. At the same time, this lagging market. At the same time, the shares of mid-price
behind the European markets in terms of product (Hr7 to Hr30 per kilogram) and expensive (more
sales testifies to the domestic market’s great than Hr30 per kilogram) price segment are
potential. In particular, experts anticipate varnish growing. The trend is affected by gradually
and paint sales to grow by 15%-20% in 2005 in growing customer requirements: those, who were
Ukraine. buying cheap paints previously, are now choosing
mid-priced products, while former mid-price paint
The Ukrainian varnish and paint market is growing customer is moving up to expensive paints.
primarily at the expense of building paints, the Private customers, as well as the best building
growth in demand for which, according to the organizations, have become more discriminate in
leading producers, reached 30% in 2004. paint selection and more perceptive to new
According to the Market Department at the technology. Hence, there is a rapid increase in
Dnipropetrovs’k Varnish and Paint Plant, sales of demand for environmentally friendly, water
industrial paints and primers are growing 20% dispersion acrylic paints: e.g., CJSC Lakma is
every year. The popularity of water dispersion doubling their output annually, with their share
products is also growing. Based on data from approaching 15%-20% in company’s production
CJSC Lakma, consumption of them amounted to volume.
20,000 tons in 2002, went as high as 36,000 tons
in 2003, and was at about 47,000 tons in 2004. The share of cheap oil and alkyd paints, which
Not surprisingly, then, a lot of new water-based include the best-known products, such as
Prepared by BIZPRO 37
pentaphthalic enamel paints PF-115 or PF-266, is declining, to the benefit of corporate orders.
gradually declining. Despite the fact that such “Cottage” enterprises are gradually leaving the
paints remain the most common, their domination market due to the recent increase in prices for the
of the market is not as assured as it used to be. raw materials used in paint production. (This
According to the Lakma Company, even in 2003, increase is of course connected with the global
alkyd and oil paints accounted for 62% of the increase in oil prices.) Making varnish and paint is
market, but accounted for only half in 2004. It is not a highly profitable business: the lower the
not only the basic paints that are losing market output, the more difficult it is, so smaller
share, but also the most basic ways of selling enterprises are at disadvantage.
basic paints. Based on Lakma data, the share of
open-air markets in paint retail trade has fallen to Market leaders are going to consolidate their
40%, and experts believe it to be declining further positions even more, as the price rise for varnish
due to stronger sales by building supermarkets. and paint products of 2004 is not the last one the
world will see. Experts believe the seven or eight
Simultaneous with the expansion of leading largest companies could capture up to 85% of the
Ukrainian companies’ product ranges through market in the future. It seems likely that
introduction of higher-quality products has been a international companies (which experts say are
movement towards lowering prices for products going to accelerate their expansion on the
made by well-known foreign manufacturers, as a Ukrainian market) will dominate in this group. Only
result of their establishing production facilities in extremely attractive investment opportunities in
Ukraine. Nevertheless, national producers with other promising markets, e.g., India’s or China’s,
foreign registrations have not yet become the could slow down the large international
primary competition for domestic producers, which companies’ conquest of the Ukrainian market.
rely on the cheapness of their products, believing
low prices to be their unconditional competitive In the opinion of market operators, the market is
advantage over foreign investors. Thus, CJSC becoming more favorable for large companies.
Lakma’s management claims that production The varnish and paint sector has finally felt the
volumes of Koloryt paints (less than 3,000 tons effects of the industrial boom. Demand for
are made per year) or the market shares held by industrial paints (for painting equipment, machine
Malyar and Empils painst do not yet threaten tools, agricultural machinery, ships) is growing as
Lakma. Even the launch in August of last year of a rapidly as demand for building paints. This means
Henkel Bautechnik (Ukraine) facility with a paint the market, primarily for the traditional products of
and liquid plaster line rated for 30,000 tons per large enterprises, and in particular for alkyd
year has not caused a market upheaval, because paints, is strong.
the company specializes in a limited range of According to data from the State Statistics
products for finishing building fronts. Committee, the growth in production of varnishes
Still, the market influence of primitive small and paints was about 10% (the average annual
enterprises is weakening, as customers are indicator) in 2000-2004. In turn, importers are now
becoming more focused on product quality. Retail establishing their own production facilities in
volume on the paint market, in which small Ukraine (Zerkalo Nedeli http://www.zerkalo-
enterprises used to dominate, are gradually nedeli.com/ie/show/459/41654/).
1726,0
1271,5 1089,7 1184,9
941,2
Prepared by BIZPRO 38
TABLE 1-24. VARNISH AND PAINT PRODUCTION STRUCTURE AND VOLUME IN 2000-2003,
PRODUCTION UNITS
Code Products 2000 2001 2002 2003
620900 Varnish and paint materials, total, tons 107284.0 130456.0 167247.0 181340.0
620951 Including progressive materials, tons 92394.0 116835.0 150010.0 167652.0
622101 Condensation resin varnishes, tons 24626.0 25193.0 27728.0 27738.0
622111 Enamels, primers, and fillers based on 51613.0 67474.0 75909.0 77719.0
condensation resins, tons
622121 Varnishes, enamels, primers, and fillers 4979.0 4673.0 8611.0 10257.0
based on polymerization resins, tons
622131 Varnishes, enamels, primers, and fillers 3499.0 2732.0 3871.0 3591.0
based on cellulose ester, tons
622151 Solvents and removers for varnish and paint 1981.0 4710.0 12136.0 10253.0
materials, total, tons
622213 Alcoholic varnishes and alcohol-diluted 206.0 64.0 918.0 829.0
lacquers, tons
622600 Water paints, tons 5406.0 11453.0 20027.0 36296.0
622700 Heavy-bodied oil paints, tons 1264.0 841.0 1671.0 285.0
623000 Drying oil, total, tons 5553.0 3691.0 4105.0 2987.0
623100 Natural drying oil, tons 392.0 155.0 47.0 56.0
623200 Combination drying oil, tons 1150.0 890.0 987.0 527.0
623300 Oksol drying oil, tons 4011.0 2646.0 3071.0 2404.0
624381 Light-bodied oil paint, tons 7392.0 8468.0 11188.0 10373.0
624383 Powder paint, tons 25.0 473.0 806.0 968.0
624401 White pigment, total, tons 90212.0 95956.0 77027.0 93649.0
624422 Titanium dioxide pigment, tons 84828.0 90917.0 72509.0 87795.0
624462 Zinc white, tons 5349.0 5039.0 4518.0 5854.0
624682 Ferrioxide red pigment, tons 15436.0 12429.0 11968.0 16291.0
624683 Ferrioxide yellow pigment, tons 2702.0 3404.0 3784.0 3757.0
626290 Turpentine, total, tons 411.0 265.0 319.0 238.0
TABLE 1-25. VARNISH AND PAINT PRODUCTION STRUCTURE AND VOLUME IN 2004,
PRODUCTION UNITS
Code Products 2004
24.30.1 Polymer-based paints and varnishes, tons 186570.9
24.30.11 Water-diluted polymer-based paints and varnishes, tons 46116.9
24.30.12 Paints and varnishes diluted by other solvents, tons 140440.1
24.30.12.200 Paints and varnishes, including enamels and lacquers, based on 80942.7
polyester, dispersed or diluted in volatile organic solvents, tons
24.30.21 Ready-made paints and vitreous mixtures, tons 4884.8
24.30.22 Paints and varnishes, ready-made driers, tons 33170.4
Prepared by BIZPRO 39
German concern Meffert AG created a joint
venture (Meffert Ganza Farben in
46
Dnipropetrovs’k). Tikkurila of Finland bought started production in early 2005 (Russia’s
enterprises in Ukraine (Farby Koloryt Ltd.), as has Eurotrubplast Holding is the main investor).
Russia’s Empils (Elaks Plant in Odesa). Akzo
Nobel is placing orders in Ukraine (Khimreserv The most attractive segment in plastic and rubber
Firm) for making paints under the local Malyar products for the construction material industry is
brand. making plastic and metal-plastic pipes for
construction, repair, and reconstruction of
Production of Plastic and Rubber Articles for underground gas lines, water supply lines, sewer
Building systems, and district heating systems. There are
also protective plastic pipes designed for holding
According to the State Statistics Committee of telecommunications cabling.
Ukraine, the plastics and rubber market recorded
an average annual growth of about 30% for The key benefits of plastic pipes include their high
plastics and nearly 7% for rubbers in 2000-2004. resistance to corrosion, preservation of the
Output increased by 72% in 2003 compared to original flow rate capacity because deposits don’t
2002, increased 5.7 times in 2004 compared to form in them, low heat conductivity, resistance to
2003. galvanic corrosion, light weight, flexibility,
improved sealing tightness, quick and easy
The number of population centers and industrial installation, and a service life of at least 50 years.
facilities connected to centralized gas and water The weaknesses include susceptibility of some to
services is growing every year. Residential and ultraviolet light and lower resistance to mechanical
commercial construction is on the rise. High stress. Use of plastic pipes is also limited for
growth rates are attracting new players to this heating systems, as not all plastics (depending on
market. One of these players is the new OJSC the polymer materials used) are resistant to high
Rubizhne Pipe Plant (Luhansk Oblast), which temperatures.
FIGURE 1-14. RUBBER AND PLASTICS PRODUCTION VOLUME IN 2000-2004, HR MILLION*
818,2
Hr million
144,0
83,9
60,7
36,6
TABLE 1-26. KEY PLASTICS ARTICLES PRODUCTION STRUCTURE AND VOLUME IN 2000-2003,
PRODUCTION UNITS
Code Products 2000 2001 2002 2003
612251 Pipes and parts of pipelines made of 2807.0 5341.0 8652.0 16459.0
thermoplastics, tons *
614701 Glass-reinforced plastics and products, total, tons 1464.0 1550.0 1556.0 1601.0
614757 Pipes and parts of pipelines made of glass- - 46.0 59.0 34.0
reinforced plastics, tons
614759 Large-size glass-reinforced plastics articles, tons 44.0 112.0 53.0 39.0
Prepared by BIZPRO 40
According to information from the Association of volume in meters of equipment amounted to
Manufacturers and Builders of Polymer Pipelines, 14,000 m in 2002 and 18,000 m in 2003.
TABLE 1-27. KEY PLASTICS ARTICLE PRODUCTION STRUCTURE AND VOLUME IN 2004,
PRODUCTION UNITS
Code Products 2004
25.13.30 Rubber tubes and pipes, hoses and sleeves, except ebonite, kg 4343415.1
25.13.30.550 Metal-reinforced rubber sleeves and hoses, kg 1345132.0
25.21.21.500 Rigid pipes, tubes, hoses, and coupling parts made of polymers of 34783.6
ethylene, propylene, vinyl chloride, and other plastics, kg
25.21.22 Other pipes, tubes, sleeves, hoses, and coupling parts made of plastics, 640081.0
kg
25.23.14 Doors and sills, windows, frames, panes, shutters, similar products and 5270.0
their parts made of plastics, kg
Key Producers of Rubber and Plastic Products Committee) offering their products to customers
for Building as the core activity, with dozens of enterprises
making pipes from polymer materials. The market
Based on State Statistics Committee data, as of leaders may be singled out from among these
the end of 2004, there were 1,447 manufacturers companies (Table 1-28).
in this segment (Data of Ukraine’s State Statistics
TABLE 1-28. KEY RUBBER AND PLASTICS PRODUCERS
Producer Region Product
Rubizhne Pipe Plant (TD Luhansk Oblast Pipes made of polymer materials
Eurotrubplast)
PE Atols Brovary, Kyiv Oblast Pipes made of polymer materials
OJSC Vynohradiv PMK-78 Vynohradiv, Vynohradiv Pipes made of polymer materials
Rayon, Zakarpatska Oblast
NPF Vodopolimer Boryspil, Kyiv Oblast Pipes made of polymer materials
OJSC Hamaplast Ukrayina Boryspil, Kyiv Oblast Pipes made of polymer materials
OJSC Sanitary Wares Plant Kyiv Pipes made of polymer materials
Zakhidbudservis Scientific Lviv Pipes made of polymer materials
and Production Association
OJSC Kyivoblgaz Kyiv Pipes made of polymer materials
OJSC Nosivsky Pobiedit Donetsk Pipes made of polymer materials
Plant
Plastpipe Ltd. Ivano-Frankivsk Pipes made of polymer materials
OJSC Polivtor Krasnoperekopsk, AR Pipes made of polymer materials
Crimea
OJSC Rozma Chernivtsi Pipes made of polymer materials
Rubizhne Zorya Treasury Luhansk Oblast Pipes made of polymer materials
Chemical Plant
OJSC Sizakor Simferopol, AR Crimea Pipes made of polymer materials
OJSC Simferopol Plastics Simferopol, AR Crimea Pipes made of polymer materials
Plant
SITEK Ltd. Dnipropetrovsk Pipes made of polymer materials
CJSC UDT Kyiv Pipes made of polymer materials
Ukrgazyfikatsiya-Yug Ltd. Odesa Pipes made of polymer materials
Elplast-Lviv Ltd. Horodok, Lviv Oblast Polyethylene piles, coupling parts for
gas- and water supply lines
Ukrpolimerkonstruktsiya Kyiv Polyethylene pipes for supplying
Ltd. flammable gases and for pressure water
supply
CJSC Brovary Plastics Brovary, Kyiv Oblast Production of plastics and plastic
Plant products
Luha-Plast Ltd. Luhansk Production of plastics and plastic
products
Plast Modern Scientific and Urban-type settlement Production of plastics and plastic
Production Firm Kotsyubynske, Kyiv Oblast products
Prepared by BIZPRO 41
Ekopolimer Scientific and Kharkiv Production of plastics and plastic
Production Firm products
DAK Ltd. Donetsk Production of plastics and plastic
products
JV Euro-plast Lviv Production of plastics and plastic
products
OJSC Kyivguma Kyiv Production of rubber
Production of Wood and Wood Products In 2002, as compared with 2001, production of
particle board increased by 45%, of matches and
Based on State Statistics Committee data, plywood by 23%-29%, and of wood fiberboards by
woodworking industry enterprises increased 7% in 2002.
production volume (in monetary terms) by 2.4% in
2004 compared to 2003. Increases were recorded However, a decline of 15% was recorded in the
in the production of hardwood parquet, plywood, production of window and door assemblies.
particle boards, wood windows, doors, frames, Parquet and lumber production fell by 1%-3%.
and sills (by 23%-52%). The 2003 data show an
increase in sales earnings by 24.4% compared to There was an increase in production volumes of
2002. plywood, particle board, and matches (by 42%-
67%), wood fiberboard and wood packaging (by
Production of particle boards increased by a third, 14%-20%) in 2001 as against 2000. At the same
with 9% to 22% growth for matches and plywood. time, there was a decrease in the production of
At the same time, production of wood crating and parquet, window and door assemblies and timber
parquet decreased. by 2%-12% compared to 2000.
FIGURE 1-15. WOOD AND PRODUCTS PRODUCTION VOLUME IN 2000-2004, HR MILLION
1047,2 1072,7
841,6
Hr million
655,3
516,7
* Acc. To KVED
Source: State Statistics Committee
TABLE 1-29. WOOD AND WOOD PRODUCTS PRODUCTION STRUCTURE AND VOLUME IN 2000-
2003, PRODUCTION UNITS
Code Products 2000 2001 2002 2003
671001 Lumber, thousand m3 2116.5 1993.3 1932.5 2075.4
671033 Birch and softwood lumber, thousand m3 29.1 29.6 22.2 44.6
Prepared by BIZPRO 42
673120 Kits of wood parts for houses with walling - 6.2 7.1 16.4
made of local building materials and products
for house-building, thousand m2 of total area
673129 Timber used for building, thousand m3 - - - 0.2
673130 Window and door assemblies, thousand m2 972.1 1010.7 844.8 991.2
673131 Including window assemblies, thousand m2 397.8 465.5 381.6 404.2
Key Producers of Wood and Wood Products 30%-35% of the earnings for sellers four years
ago.
According to the State Statistics Committee, there
are over 1,000 woodworking enterprises in Roofing materials are made for two types of roofs:
Ukraine, producing wood and wood products as flat and inclined. Different materials are used for
their core activity. The greatest contribution to the each. Experts say the share of inclined roofs
wood and wood products market is made by the accounts for more than 20% of the market (in
following companies (According to rating of sales money terms) and flat roofs for about 80%. Rag
earnings as per KVED): STEN LTD, DOKA LTD, felt materials are mainly used for flat roofs, with
PE LISPROMSERVIS, AVERS LTD, CJSC ruberoid being common for the Ukrainian market.
STOKHID, and PYRYATYNDEREV LTD. Of late, euro-ruberoid is becoming increasingly
popular.
Production of Roofing and Waterproofing
Materials The structure of rag felt roofing in 2004 broke
down thus (Dilova Stolytsya/www.dns.kiev.ua, of
The Ukrainian roofing materials market is one of 26 July 2005.):
the fastest growing of markets. In the estimates of
some industry experts, nearly $300 million worth - asbestos cement boards – about 83% of the
(in wholesale prices) of various products sold in market
2001. During the last three years, sellers note an - metal tiles – 11,5%
annual increase in sales of approximately 20%.
Also, the number of manufacturing companies has - euro-slate – 3,7%
grown. This has resulted in increased sales of - bitumen tile – 1,1%
domestically-produced goods (the majority of - natural tile – 0,3%
these goods are still made from imported raw
materials). This has led to a situation in which The highest consumption growth rates, of about
increasingly smaller volumes of finished roofing 40% compared to 2003, were noted for bitumen
materials are imported into Ukraine. Today, tiles; the shares of euro-slates and metal tiles are
imports account for at most 10% of the total also growing, with 37% and 23%, respectively.
market volume, even though they generated some The total inclined roofing market has been
growing at an average of 4%-5% annually.
Prepared by BIZPRO 43
Ruberoid manufacturers could hardly call the year
2004 a good one. Given a boost of their
production capacity, the anticipated market growth
51
failed to materialize. Even a fall in product prices polymer membranes). Ruberoid is the best-known
and the driving out of importers failed to help this roll waterproofing material. It is not, however, rot-
material recapture its market share from other resistant and or very durable. It is gradually being
types of roofing. Experts believe the main reason replaced with new roll materials.
of Ukrainian producers’ insufficient development
to be contraband supplies of cheap and not The second generation of roll waterproofing is
always good quality products from Russia (Dilova represented by a coating, where synthetic
Stolytsya www.dns.kiev.ua, of 26 July 2005.). materials (polyester, glass canvas, glass fabric)
Ukraine’s present raw materials base is unable to are used as a base. Bitumen is modified by SBS
satisfy manufacturers’ needs for the production of (styrene-butadien-styrene) polymers and APP
about 40 million m2 per year. Only financially (atactic polypropylene), which significantly
strong companies can import raw materials from improves the material’s elasticity and heat-
abroad or invest in making them in Ukraine. resistance.
Today, Akvaizol is the only company making non- The capacity of the roll roofing materials market,
woven base for euro-ruberoid in Ukraine. Taking according to different operators, varies from 60 to
this into account, in two or three years, the market 80 million m2 in 2005. Experts estimate that the
will consist only of the three largest ruberoid ratio of use of traditional ruberoid and euro-
producers. The rest will be forced to either ruberoid has been equalizing in recent years.
diversify or leave the market. According to some operators, the annual increase
The Ukrainian roofing materials market is in the capacity of the euro-ruberoid market has
developing both quantitatively and qualitatively. been approaching 50% in recent years. This
Ukrainian producers are presenting innovative situation is justified economically. Despite the fact
products and driving imported materials out. that the price of euro-ruberoid is higher than that
Growing consumption in the provinces is having a of common ruberoid, the service life of the
positive impact on the market. The main trends building in general, and of the roof in particular,
also include a gradual reduction in imports. More when second-generation materials are used is
interest if foreseen in more durable and higher- higher by an order of magnitude. Cardboard-
quality roofing materials. based ruberoid is coated in three to five layers;
such a roof needs to be repaired approximately
The domestic roofing materials market is now every three years. The uro-ruberoid service life is
estimated at 100 million euros, with anticipated much longer, and it is applied in two layers. It may
growth of about 30%. The market’s development be concluded that the savings rate that results
is accompanied by the emergence of new players. from using second-generation waterproofing
So, in 2005, a Ukrainian plant manufacturing materials should be very substantial nationwide.
roofing materials was launched in
Dniprodzerzhinsk, built by Russia’s Tehkhnonikol Key Producers of Roofing and Waterproofing
Company, which has been supplying roofing Materials
materials to Ukraine for ten years. Launching There are about 25 manufacturers on the metal
production in Ukraine would allow lower roofing roofing market. The largest of them are: TPK;
materials prices. Compared to Russian imports, Ruukki; Arsenal; Albatros; Maister-Profi; and
prices of certain types of goods have already Zakhidspetsprofil. In the second half of 2004 and
dropped by 15%. in early 2005, there emerged several new
Today, experts are noting the rapid development producers of metal roofing tiles, such as Aviks-
rate of the Ukrainian market for waterproofing Metal, Prushynsky. Arsenal has expanded its
underlay. Market capacity is growing year by plant network.
year, and the share of imports, which is The following companies should be noted among
insignificant even today, is diminishing further. Ukrainian producers of ruberoid and euro-
Another favorable trend is connected with the ruberoid: OJSC Blasto; OJSC Zhytomyr Plant of
transition to use in the building industry of new- Roofing and Waterproofing Materials; Organic
generation waterproofing underlay. This is an Synthethis Plant (Rubizhne, Luhansk Oblast);
indicator that Ukraine is gradually moving toward East-Membrane (Kharkiv); OJSC Kyiv
embracing international standards. However, Budindustria Integrated Plant; OJSC Lutsk
there are also problems in this segment. The Cardboard and Ruberoid Plant; OJSC Lvivpokizol;
biggest problem is an insufficient raw materials CJSC Oreol-1; JSC Ukrvodtekhsnab Production
base, which has an impact on the quality of and Commercial Firm (Kyiv); OJSC Rubitel
finished products, as well as their price. (Odesa); OJSC Slavuta Ruberoid Plant;
Skloplastyk Ltd. (Berdyansk, Zaporizhzhya
The Ukrainian market today has three generations Oblast); OJSC Budinvest (Kharkiv); Tekhnonikol
of waterproofing materials represented: traditional Ukrainian-Cyprus Joint Venture; Fibrebit Ltd.
ruberoid; roofing with a synthetic base; and so- (Kyiv; Arkon Firm Ukrainian-Russian JV; Edelveis
called polymer waterproofing (bitumen-free Ltd. (Akvaizol Roofing Materials Plant).
Prepared by BIZPRO 44
On the ceramic roofing tiles and slates market, the A rather wide range of nonmetal materials is used
key producers can be identified by their sales for making stairs:
earnings according to SCP: OJSC Ivano-
Frankivsk Cement Slates Integrated Works; - various varieties of wood;
Ekotile Ltd.; Kramatorsky Shyfer Ltd.; Balakliya - various types of glass;
Slates Intergrated Plant Ltd.; Volyn-Shyfer Ltd.;
SE Slates Plant (Kyiv); Tekhprom Ltd. (Makiyivka, - plastics;
Donetsk oblast); OJSC Kharkiv Plant for
Insulating and Asbestos Cement Materials; OJSC - natural stone;
Azboderevsklo; OJSC Zaporizhzhya Plant for
- agglomerates;
Abestos Cement Products; Kryazh Affilliate of
Private Enterprises; Krasnogvardiysky Slate Plant. - ceramic products, etc.
Production of Materials for Floors, Ceilings, Only quality wood is used for making stairs, both
and Stairs for load-carrying structures and decoration.
Softwoods, semi-hard, and hardwoods are used.
Today, this segment is growing both quantitatively
and qualitatively. The market is being filled with a Diverse design solutions are implemented based
new range of products, and goods with new and on compatibility of wood with other materials.
improved features. Where floor and stair materials Metal, acrylic glass and ceramics are those most
mostly depend on fashion trends, architectural frequently used.
innovations, customer preferences and prices, the
use of ceiling materials is more influenced by Manufacturers produce various types of ceramic
functionality, cost, and warranty period. products used for finishing steps. Tiles for steps
always have a special anti-slipping component,
The market of floor products consists of three which ensures safety of use.
main groups: wood products; ceramic floor tiles;
and linoleum and synthetic carpeting. Wood Stairs with steps made of glass or transparent
products include parquetry, laminated flooring, plastic are becoming increasingly popular. They
bars, planking, and borders for parquet or wood use various types of glass and plastic.
floors.
The stone for stairs may be extracted only by
The parquet market is the largest component of drilling stone blocks, rather than by explosive
the flooring market. Today, the Ukrainian flooring technique. Marble is used inside buildings,
products market is highly competitive, with whereas granite can be used both inside and out.
companies trying to win customers, and
competition is becoming tougher in every market The stairs market started developing only several
segment, including linoleum and carpeting, and years ago, with the boom in cottage building and
multilevel apartments. The rapidly growing
laminated floors and parquet.
demand for interior stairs has prompted a number
Market experts (Kontrakty / No. 09 of 27 February of makers of traditional joiner’s products
2006) note that Ukrainian producers of parquetry (windows, doors) to start making stairs. Other
satisfy about 85% domestic market demand. important factors also included: the shortage of
Imported parquet therefore has a 15%-20% share. these products; the high profitability of production;
Imports mainly consist of multilayer glued parquet the nearly absolute lack of competition
boards (which account for about 90% of imports), (www.dsnews.com.ua/archive/index.php?action=a
imported from European countries. Exotic rticle&r_id=18&article_id=18890&arc_num=204).
parquets (merbau, rosewood, bamboo, Today, there is a shortage of this type of product
mahogany, belau, mersava, etc.) account for in the capital and customers often have to wait for
about 3%. one or two months to have their orders fulfilled.
According to market experts, up to 70% of the
Production of multilayer parquet board is a Kyiv market is occupied by small companies,
promising field. This material has already won its which make stairs alongside other joinery. The
markets in developed countries and will be soon unique orders on this market allow for higher profit
replace traditional parquet and laminated floors margins (where prices for materials account for
(and in some cases, also linoleum) in Ukraine, about 50% of the production cost of common
especially on residential premises. stairs, they account for about 8% for custom
products). In making premium unique stairs
Like parquet products, stairs, in addition to their
costing $20,000 to $40,000, a manufacturer’s
functional role, also serve as a prominent interior
profit could be as high as 100%.
and exterior component. Today, thanks to use of
new technology, it has become possible to stay Despite shortages, manufacturers are noting that
consistent with the interior decoration style and importers with a current share of not more than
create modern structures. 10% are gradually leaving this market. Experts
explain this by citing differences between
Prepared by BIZPRO 45
European and Ukrainian building standards and Industry Complex (Lviv Oblast); Kivertsi Integrated
the unwillingness of Kyivans to buy standard Woodworking Plant (Volyn Oblast).
series products, adjusting which to suit real-life
dimensions would be complicated and expensive. The second group comprises the Dim Parketu
It is likely that another round in the cottage Kyiv group of companies, Ineks UkrParket, which
building boom will lead to further market is part of the PIG Concern, Krokus 999, Veles,
expansion and company growth. Klenovyi Lyst (Kremenchuk), Pyryantynderev
(Pyryatyn, Poltava Oblast), Edelveis (village
Key Producers Solomonove, Zakarpatska Oblast), Bukovynsky
Parket, Dniprowood (the first manufacturer of
Making parquet in Ukraine has long been a multilayer parquet in Ukraine), and Promarsenal
traditional business for woodworking plants and Plant (Kramatorsk).
forestry enterprises.
Experts say the above group of leaders provides
Some 160 to 200 enterprises claim to make it; for 40%-50% of domestic production, which in
however, there are not more than 10-15 serious general satisfies some 85% of Ukrainian market
parquet manufacturers (that is, with an output of demand.
at least 2,000-3,000 m2 per month).
Conventionally, they can be categorized into two Some domestic manufacturers (primarily joint
groups: the “old-timers” and the “new wave” of ventures) are exporting a lion’s share of their
enterprises. produce to Europe, and dump only smaller
remaining batches on the domestic make.
The first group includes: Ivano-Frankivsk Sometimes these are batches rejected by
Integrated Woodworking Plant; Potutorsky Western customers.
Woodworking Plant; Kamyanka-Buz’ka Timber
1.3. SALES BY SEGMENT IN 2000-2004
Sales growth of an average annual rate of about Average annual growth rate for the whole
25% was observed in the period of 2000-2004. nonmetal mineral construction materials segment
amounts to nearly 20%.
The majority of construction materials industry
segments demonstrated sustainable sales growth The lowest rate, of 5%, was observed in 2001 vs.
of sales in that period, with the rubber and plastics 2000, and the highest rate, of 38%, was in 2004
segments seeing higher rates. vs. 2003.
We will now discuss each sector segments in Also, a decline in sales was observed in the
greater detail. cement, concrete, and plaster industry in 2001 vs.
2000.
Prepared by BIZPRO 46
FIGURE 1-16. STRUCTURE OF SALES OF NONMETAL MINERAL MATERIALS IN 2000-2005,
HR MILLION
2645,1
2031,4
2077,8
Hr million
Prepared by BIZPRO 47
1442,2
1185,7 1160,9
1041,7
Hr million
702,3
56
TABLE 1-31. DYNAMICS OF GLASS SALES (AS CORE ACTIVITY), HR MILLION
Enterprises with sales more than 0, SCP category 2000 2001 2002 2003 2004
26.11 Production of plate glass 358.2 476.2 471.7 493.9 668.5
26.12 Shaping and processing of plate glass 49.1 85.0 115.5 159.4 168.6
26.14 Production of glass fiber 124.0 135.9 91.8 130.2 94.8
26.15 Production and processing of other types of glass and glass 170.9 344.6 506.6 377.3 510.4
products
485,2*
415,9
Hr million
256,2
170,5
126,3
64,7
2031,4
1547,2
1338,8
Hr million
1046,3
954,6
Prepared by BIZPRO 48
Sales of Ceramic Tiles 2004. The reduction in sales of ceramic products
on the domestic market in 2003 was caused by
According to the State Statistics Committee, there increase in the volume of exports (positive
was a slight decline (3.4%) in ceramic tile sales in balance, with 20% excess over imports). Also,
2003. Despite this fact, however, average annual there was a considerable decline in investment
sales growth of about 30% was observed in 2000- activity in ceramics production.
FIGURE 1-20. CERAMIC TILE SALES IN 2000-2004, HR MILLION
736,7
457,6 441,9
427,6
Hr m illio n
300,6
Sales of Cement, Plaster, and Lime an increase of only 9%, whereas sales are
growing at an average of 50% on the domestic
A slump in lime sales was recorded in 2001, market.
based on indicators of all operators active on the
Ukrainian market. However, when evaluating the Another important factor affecting sales of these
sales situation for operators for whom lime materials consists in the growing demand for
production was a core activity, sales were products made from them. This demand
growing. The situation as regards cement sales in encourages manufacturers to use their goods as
2002 is similar. The decline in sales is connected, raw materials and make finished products from
to a certain extent, with a 39.5% growth of them.
exports. Exports, though, continue declining, with
Prepared by BIZPRO 49
FIGURE 1-21. SALES OF CEMENT, PLASTER, AND LIME IN 2000-2004, HR MILLION
73,8
289,2
50,5
256,1
Hr million
54,0 56,9
3404,5
19,3 186,8 202,0
202,8
2205,6
1510,9 1478,7
1185,2
TABLE 1-32. DYNAMICS OF SALES OF CEMENT, LIME, AND PLASTER (AS CORE ACTIVITY), HR
MILLION
Enterprises with sales of more than 0, SCP 2000 2001 2002 2003 2004
category
26.51 Production of cement 686.4 801.7 895.9 1201.4 1753.5
26.52 Production of lime 57.3 55.9 72.0 74.2 86.5
26.53 Production of plaster 13 17.3 18.5 24.2 38.2
TABLE 1-33. DYNAMICS OF SALES OF CEMENT, LIME, CONCRETE, AND PLASTER
(FOR INDUSTRY IN GENERAL), HR MILLION
Enterprises with sales of more than 0, SCP 2000 2001 2002 2003 2004
category
26.51 Production of cement 1185.2 1510.9 1478.7 2205.6 3404.5
26.52 Production of lime 202.8 186.8 202.0 256.1 289.2
26.53 Production of plaster 19.3 54.1 56.9 50.5 73.8
Enterprises with sales of more than 0, SCP category 2000 2001 2002 2003 2004
26.61 Production of concrete products for use in building 969.9 1192.4 1230.6 1593.4 2457.4
26.62 Production of plaster products for use in building 46.0 68.7 101.6 134.4 164.2
26.63 Production of ready-mixed concrete mixtures 137.9 216.6 224.1 424.8 695.6
26.65 Production of fibrous cement products 197.8 216.6 273.5 336.2 516.6
26.66 Production of other concrete and plaster products 7.5 13.0 14.1 24.8 32.7
Prepared by BIZPRO 50
TABLE 1-35. DYNAMICS OF SALES OF CEMENT, CONCRETE, AND PLASTER PRODUCTS (FOR
INDUSTRY IN GENERAL), HR MILLION
Enterprises with sales of more than 0, SCP category 2000 2001 2002 2003 2004
26.61 Production of concrete production for use in building 1733.5 2240.6 2348.3 2949.0 4395.0
26.62 Production of plaster products for use in building 101.9 130.3 185.9 266.3 317.6
26.63 Production of ready-made concrete mixtures 417.8 486.5 524.0 783.0 846.1
26.65 Production of fibrous cement products 389.4 366.6 486.3 614.5 808.9
26.66 Production of other concrete and plaster products 26.8 38.2 303.7 70.0 119.0
FIGURE 1-22. SALES OF CONCRETE, CEMENT, AND PLASTER PRODUCTS IN 2000-2004, HR
MILLION
7000
119,0
6000 808,9
846,1
5000 70,0
317,6
614,5
4000
Hr million
0
2000 2001 2002 2003 2004
Sales of concrete products for building uses Sales of plaster products for building uses
Sales of Other Mineral Materials and Products The “other nonmetal mineral products” segment
shows an average increase in sales of 22%, when
Judging from statistics, producers whose core an enterprise’s core activity is in question. The
activity involves production and sale of mineral highest growth rates are observed in the “stone
products and materials not included in the above dressing” segment, which in 2004 saw strong
categories are boosting their production volumes growth over 2003. Sales of abrasive products
and sales. If one considers the data for the show more modest growth figures, and even
industry in general, the growth rate is somewhat slumped in 2002 and 2003.
lower, and 2002 even saw some decline (Tables
25 and 26).
Prepared by BIZPRO 51
TABLE 1-36. STRUCTURE AND VOLUME OF SALES OF NONMETAL MINERAL PRODUCTS AS
CORE ACTIVITY IN 2000-2004, HR MILLION
Enterprises with sales of more than 0, 2000 2001 2002 2003 2004
SCP category
26.7 Stone dressing 71718.5 96233.3 117569.4 148737.3 209513,9
26.81 Production of abrasive products 266148.6 282627.2 250581.2 260912.8 320483,4
26.82 Production of other nonmetal 176002.4 226123.4 245922.9 405716.0 591622,1
mineral products, not otherwise
categorized
TOTAL 513869,5 604983.9 614073.5 815366.1 1121619.4
TABLE 1-37. STRUCTURE AND VOLUME OF SALES OF OTHER NONMETAL MINERAL PRODUCTS
IN 2000-2004 (FOR INDUSTRY IN GENERAL), HR MILLION
Enterprises with sales of more than 0, 2000 2001 2002 2003 2004
SCP category
26.7 Stone dressing 293706.3 343234.2 401695.8 549431.4 703150,8
26.81 Production of abrasive products 515158.8 521484.4 450985.8 445797.4 572755,4
26.82 Production of other nonmetal 436032.0 684547.8 664029.8 1082552. 1369210,4
mineral products, not otherwise 6
categorized
TOTAL 1244897, 1549266. 1516711. 2077781. 2645116.6
1 4 4 4
FIGURE 1-23. SALES OF OTHER NONMETAL MINERAL PRODUCTS IN 2000-2004 (FOR INDUSTRY
IN GENERAL), HR MILLION
572,8
445,8
703,2
Hr million
549,4
521,5 451,0
515,.2
343,2 401.7
1082,6 1369,2
293,7
684,6 664,0
436,0
Sales of Varnishes and Paints experiencing the effects of the current industry
upturn: the demand for industrial paints (for
In market operators’ opinion, the market painting equipment, machine tools, agricultural
environment for large enterprises is becoming machinery, ships) is growing at an equally brisk
more favorable. The varnish and paint sector is pace as the demand for building paints.
Prepared by BIZPRO 52
FIGURE 1-24. SALES OF VARNISHES AND PAINTS IN 2000-2004, HR MILLION*
1062,8
Hr m illion
803,6
645,3
612,1
451,2
Sales of Plastics and Rubber housing and utility service lines, and development
of villages and settlements.
The rubber and plastics segment has been
developing in recent years. This has been Rapid growth in sales at an average of 35% was
facilitated by growing volumes of construction, observed for the entire 2000-2004 period (see
greater use of glass-reinforced plastics and other Table 1-38).
plastics products, increase and expansion of
FIGURE 1-25. SALES OF RUBBER AND PLASTICS IN 2000-2004, HR MILLION*
6725,0
4600,4
Hr million
3172,7
2814,2
1996,2
* Acc. To KVED
Source: State Statistics Committee of Ukraine
TABLE 1-38. GROWTH RATE OF RUBBER AND PLASTICS SALES, PERCENT VS. PREVIOUS
YEAR
Year 2001 2002 2003 2004
Growth rate 41.0% 12.7% 45.0% 46.2%
Prepared by BIZPRO 53
FIGURE 1-26. SALES OF WOOD AND WOOD PRODUCTS IN 2000-2005, HR MILLION*
3122,3
2625,1
2074,0
Hr million
1685,9
1498,9
* Acc. To KVED
Source: State Statistics Committee
TABLE 1-39. WOOD AND WOOD PRODUCTS SALES GROWTH RATES, PERCENT VS. PREVIOUS
YEAR
Year 2001 2002 2003 2004
Growth rates 12.5% 23.0% 26.6% 19.0%
500 490,4
428,0
450
380,8
400
337,3
350
277,4
300 266.8
USD million
241,2
250 210,4 208,1 220,9
200
150
90,3
100 62,5 54,9
40,1
50 22,7 4,5 16,3
1,1 1,8 10,5
0
2000 2001 2002 2003 2004
Prepared by BIZPRO 54
Ukrainian producers are boosting the rate and - investments in modernization of enterprises;
volume of exports. This is the result of a number
of factors: - international companies establishing affiliates
and enterprises on the Ukrainian market, etc.
- producers’ implementation of international
quality certification systems; The main bulk of export is made up of rubber and
plastics, wood and wood products, and mineral
- expansion of their own production facilities and materials and products. For more details, see
output; Tables 3 and 4 in the Appendices.
The main exports in the mineral materials and products. These products are more competitive in
products segment include plate glass, ceramic terms of production costs and conformity with
products, bricks, and cement, plaster, and lime international quality standards.
TABLE 1-41. MINERAL MATERIALS AND PRODUCTS EXPORT GROWTH RATE IN 2000-2004
Product 2001 2002 2003 2004
Glass and glass products 27.9% -4% -8.7% 45%
Ceramic products 0.6% -0.5% 13.4% 47.8%
Bricks -30% 423.8% 164.7% 91.3%
Cement, concrete, plaster, and lime 39.5% 39.7% 9.3% 9.4%
products
Other mineral products and materials 21.7% 9.4% 38% 18.7%
It seems justified to single out the roofing amounted to $14.6 million and $3.2 million,
materials and flooring segments in which export respectively, in 2004.
FIGURE 1-28. STRUCTURE AND DYNAMICS OF EXPORT OF ROOFING AND FLOOR MATERIALS
IN 2000-2004*
15,8
16 14,6
14 12,7
12
9,7
10
USD million
8 6,3
6 4,6
3,2
4
2 0,6 0,7
0,2
0
2000 2001 2002 2003 2004
Prepared by BIZPRO 55
TABLE 1-42. STRUCTURE OF EXPORTS IN 2001-2004
2002 2003 2004
Percent
Value, $ Value, $ Percent Value, $ Percent vs.
vs.
thousand thousand vs. 2002 thousand 2003
2001
Mineral products 2244887.9 128.3 3499799.1 1.6 times 4323711.1 123.5
more
Cement 158254.3 116.4 207017.1 130.8 257621.6 124.5
Chemical industry 67503.2 137.1 88027.3 130.4 171532.2 1.9 times
products more
Polymer materials, 158703.6 130.5 257005.8 1.6 times 307477.3 119.7
plastics more
Caoutchouc, rubber 104031.5 77.3 104047.8 100.0 131768.1 126.6
Wood and wood 289678.9 126.0 400399.0 138.2 516521.7 129.0
products
Stone, plaster, and 35792.9 101.6 50155.8 140.1 56718.5 113.1
cement products
Ceramic products 44848.5 99.5 50851.2 113.4 75132.9 147.8
Glass and glass 66657.5 109.4 130266.0 2 times 149058.1 114.4
products more
There exists today a relatively large group of dynamic, and profitable. The most important
exporters and importers of construction materials exporting producers and importers can be singled
and products, as this market is promising, out from this group.
Prepared by BIZPRO 56
OSCJ Ovruch Kvartsyt Mining and Concentration Quartzite
Plant
CJSC Elgran Granite blocks
PE Karavela Concrete facing bricks
Kharkivska Keramika Ltd. Ceramic tiles
Rehau Ltd. Plastics
Prepared by BIZPRO 57
TABLE 1-45. MINERAL MATERIALS AND PRODUCTS IMPORT GROWTH RATE IN 2000-2005,
PERCENT AGAINST PREVIOUS YEAR
Products 2001 2002 2003 2004
Glass and glass products 51.9% 48.4% 39.4% 66.7%
Ceramic products 15.8% 4.6% 38.2% 26.8%
Bricks -0.7% -9.5% 41.7% 12.1%
Cement, concrete, plaster, and lime 41.9% 33.2% 29.1% 51.8%
products
Other mineral products and materials 33.1% -18.3% 41% 40.7%
FIGURE 1-29. IMPORT STRUCTURE AND DYNAMICS IN CONSTRUCTION MATERIALS SECTOR IN
2000-2004
600
519,9
500
392,3
400 369,6
USD million
306,7 291,0
289,9
300 261,7
215,8
183,0
200
134,7
135,1 131,0
109,4
96,4
100 65,1 75,5
57,1 65,1
41,0 55,3
0
2000 2001 2002 2003 2004
Import of wood and wood products Import of varnishes and paints
Import of plastics and rubber Import of mineral products
Prepared by BIZPRO 58
FIGURE 1-31. STRUCTURE AND DYNAMICS OF IMPORT OF ROOFING MATERIALS AND
FLOORING MATERIALS IN 2000-2004
18 16,3
16
14
12 10,5
USD million
10
8
6,0
6 4,5
4 2,5
2,0 1,8 2,0
1,0 1,1
2
0
2000 2001 2002 2003 2004
Prepared by BIZPRO 59
Name of importer Imported product
OJSC PTC Agromat, OJSC Keramin- Ceramic tiles
Kyiv Trading Housing, CJSC Kray
Kerama, OJSC Triumfbud, OJSC
Bareks Ltd., OJSC Transnational
Commodity Group
Khersonelektro Ltd. Fiber boards
Kapri Ltd. Dry building mixtures
JSC Nord Concentrate for polystyrene dyeing
CJSC Alcest Plastic hoses and connecting parts
CJSC Kapital Paints and varnishes, dyes
CJSC Svitanok Glass and glass products
Artemivsk Plant Refractory brick
Yenakiyeve Metallurgical Plant Refractory brick
Zaporizhzhya Integrated Abrasives Feldspar
Plant
OJSC Sumykhimprom Calcium phosphate
OJSC MK Azovstal Magnesite powder, magnesia
MVA Ltd. Flooring (laminate, parquet, etc.)
Fisher-Mukachevo Ltd. » Plastics and rubber, varnishes and paints, dry building mixtures
European countries, CIS states, and the USA are supply products both for production of
the main partner countries for Ukrainian operators construction materials and for sale.
on the construction materials market, which
TABLE 1-48. IMPORTED PRODUCTS AND MAIN PARTNER COUNTRIES FOR UKRAINIAN MARKET
OPERATORS
Country Main imports
Poland Chalk, ceramic tiles
Spain Ceramic tiles, mineral filling materials for tiles
Germany Quartz sand, quartzite, refractory clay, ceramic tile
Russia Chalk
USA Bentonite, calcium carbonite, ceramic tiles
UK Phosphates, marble, plaster, tiles
Italy Ceramic products, tiles
Switzerland Clarifying concentrate, white cement
Moldova Plaster stone
Turkey Alumina-magnesium brick, dry building mixtures
France Mineral substances, refractory claims for brick plants
Imports in the subsegments of particular sectors According to the Association of Producers and
needs to be discussed separately. The Ukrainian Builders of Polymer Pipelines, import of polymer
plastic and metal-plastic piping market has a pipes amounted to approximately 4,800 meters
wide representation of foreign manufacturers, worth $6.4 million in 2002, and 6,900 meters
such as: Aquatherm, Ostendorf, Omniplast worth $9.3 million in 2003.
Alphakanта, TECE, REHAU, Polymelt
Kunststofftechnik GmbH and Magnaplast One of the main trends in the dry building
(Germany); mixtures segment in recent years has been the
ongoing decrease in imported products. Even
- Czaplinski, GSP Group (trademark U.S. Metrix), today, the Ukrainian goods are almost on a par
SKOPLAST, Plastimexта KACZMAREK (Poland); with foreign goods in terms of product range. This
is due first of all to increased Ukrainian production
- EKOPLASTIK and FV-Plast (Czechia); of dry building mixtures, with market leaders
- Genova System (USA); proactively boosting their production capacities
and expanding their product ranges. Key
- KWH PIPE and Uponor (Finland); importers include Knauf, an international concern
(import deliveries are from plants in Turkey and
- Martoni and Prandelli (Italy); Moldova), trademarks Dufa (Germany), Kerakoll
(Italy), Mapei, Litokol, and Sopro (Italy), Semin
- Uponor Wirsbo AB (Sweden),
(France), and Atlas (Poland). Atlas is widely
- Wavin (the Netherlands), and others. represented in western Ukraine, being one of the
largest producers of dry building mixtures in
Prepared by BIZPRO 60
Europe and holding about 50% of the Polish The main share of exports is from Poland and
market (The Kontrakty Ukrainian business weekly Belarus, due to lower prices as compared with
(No.22 of 30 May 2005)). Foreign manufacturers German products. For buyers with higher quality
are most active in the troweling materials, demands, there are imports from Germany,
decoration plaster, façade heat-insulating system, Belgium, and Finland.
and professional flooring segments.
Overall, the following items seem to be the most
Based on the data from the Ukrainian Association promising for foreign suppliers:
of Producers of Dry Building Mixtures (“UAVS”),
250,000 tons of plaster mixtures had to be 1. Linoleum over 2 mm wide with quality color
imported into Ukraine in 2005. This material was coating.
mainly produced in Turkey (and was mostly of the There are about 3 million m2 of linoleum worth $12
Satengips and Izogips trademarks). The million produced in Ukraine annually, which
Association argues that the pricing policy of these makes up 20% of the market in money terms and
TMs is based on dumping. Besides, a significant 30% in physical volume.
portion of these goods entered the country
through “gray” channels. As the ZED foreign trade 2. Carpets and other textile floor coverings.
classifier does not as yet have customs codes for
dry mixtures, they could be easily declared as There is only one manufacturer in Ukraine
gypsum, at a very low customs value of $70-$80 capable of producing more than 1 million m2 of
per ton. Taking into account that the retail prices carpets per years; however, due to raw material
of these mixtures are Hr1.1 to Hr1.4 per kilogram supply problems, it does not operate at full
(about $250 per ton), the profitability of this import capacity.
is obvious. Indeed, the Turkish plaster mixtures
Ukrainian carpets account for 20% of the market,
saw a huge leap in sales in 2002-2004. Imports
and their value (about $4 million) amounts to 10%
accounted for more than 85% of the plaster
of it.
market in 2004. When the Ukrainian Knauf plaster
mixture plant started production in 2005, the share 3. Ceramic tiles for interior walls, with a wide
of imports on the “plaster” market dropped to variety of colors and sizes.
65%. Nevertheless, any “victory over Turkish
goods” will take place in the future. According to Ukrbudmaterialy Corporation data,
there are about 7 million m2 of tiles, worth $14
In the paints segment, goods are imported from million, produced in Ukraine yearly. Ukrainian
many countries, including Belarus, Germany, the manufacturers are annually selling about 6 million
Netherlands, Spain, Italy, Latvia, Poland, Russia, m2 on the domestic market, which makes up 40%
the USA, Turkey, Finland, France, Sweden, of the market.
Estonia, and others. The following import brands
are the best known on the Ukrainian market: 4. High quality wallpaper in a wide range of colors.
Sadolin, Vivacolor, Tikkurila, Tikkolor, Diamant,
Oikos, Jobi, Dufa, Pinotex, Caparol, Casko, Ukrainian enterprises are annually producing
about 90 million rolls of wallpaper, worth $130
Fractalis, Feidal, Belinka, Sniezka, Marshal.
million in wholesale prices. Domestic
The largest share (45%-50%) (Budivelnyi Zhurnal, manufacturers satisfy 40% ($100 million) of
No.5/2006, p.34) of imported goods are of domestic market demand. However, they export
Russian and Belarusian origin. Germany holds up to 50% ($30 million) of their produce, mainly to
second place in terms of import volume, with over the CIS countries.
20% (Caparol, Feidal, Dufa, Flamingo, ProfiTec,
Mipa, Tex-Color trademarks). Polish varnish and 5. Insulating materials.
paint materials occupy third place (in particular, Imported mineral wool enjoys a brisk demand with
the Sniezka trademark, which holds about 15% of end users (better packaging), and imported
the market). About 10% of varnishes and paints insulating materials have a wider range of sizes
are imported from the Scandinavian and Baltic and prices.
countries, including such well-known trademarks
as Tikkurila, Vivacolor, Sadolin, Pinotex, and 6. Paints.
Beckers. Products made by other West European
manufacturers are imported on a much smaller Domestic production is quite robust (there are
scale, including: Jobi (the Netherlands), CAP and about 40 companies), but it mostly concentrates
Oikos (Italy), Jafep (Spain), Eskaro (Estonia), on oil paints. Ukrainian manufacturers are mainly
Rigas Gruntas Krasas (Latvia), Marshall (Akzo using domestic raw materials; however, they
Nobel’s Turkish plant), and Tik Kolor (a Russian import stock for acrylic paints. Some 50% of the
enterprise of the Tikkurila concern). paints produced in Ukraine are intended for
industrial applications (machine-building, furniture-
In the facing bricks sector, there is a demand on making, etc.) or exported to neighboring countries.
the part of a higher-income demographic group.
Prepared by BIZPRO 61
The other 50%, amounting to 45,000 tons ($120 Today, these products are imported from
million), are for sale. Germany, Finland, Poland, Czechia, and other
countries.
7. Steel sandwich modules for erecting
supermarkets and other industrial facilities that
require modern construction materials.
1.6. VOLUME OF FOREIGN DIRECT INVESTMENT IN 2000-2004
The investment attractiveness of the construction the existing legislation, an insufficiently stable
materials sector is a result of Ukraine’s improved immediate political situation (after the presidential
economic climate, a stable political situation, a fall and parliamentary elections and political reform),
in risk of investment, development of the high taxes, and a lack of an investment insurance
construction materials trade sector, increased system.
production volume, and growing demand for non-
residential (office, commercial) buildings. Normally, investors prefer to build new production
facilities or open branches or affiliate companies
Increases in capital construction by nearly 30% rather than reconstruct and modify existing
and in private building (35%-40%) (Komertsiyna facilities. This is due primarily to the fact that
Nerukhomist (Commercial Property) of 19 existing facilities do not conform to modern
September 2005) in 2000-2005 are indicators of manufacturing standards. Still, the majority of
the beginning of a building boom in the country. foreign investors are investing in existing
Such circumstances are favorable for attracting enterprises, launching new production lines,
foreign investors. financing development of retail chains, developing
and promoting new trademarks, and modernizing
The greatest number of investors come from enterprises. In the 2000-2004, the most exciting
Russia, Germany, the UK, Italy, France, and segments for foreign investors were production of
island nations. The number of investors and the rubber and plastics, glass, cement, concrete, lime,
amounts of money they are investing, however, and plaster.
are too small, being hampered by imperfections in
FIGURE 1-32. STRUCTURE AND DYNAMICS OF FOREIGN DIRECT INVESTMENT IN 2000-2004, HR
MILLION
140
124,6 126,0
120
100
80 77,3
Hr million
67,4 62,4
63,9
56,9
60
48,1 46,7
37,9 39,7
40 34,7 37,5
31,0 36.4 31,7
27,6 27,0
20,6 23,7
21,2 20,0 19,2
20 16,5 15,4 14,7
11,0 11,2 15,9
3,0
6,9 2,5 8 10,2 9,4 4,8 9.9
6,6 7,2 2,1
0,4 2,2 1,6 1,5 2,8 1,9 1,7 1.7 2,0
0 0.4
as of early 2001 as of early 2002 as of early 2003 as of early 2004 as of early 2005
Prepared by BIZPRO 62
TABLE 1-49. STRUCTURE AND DYNAMICS OF FOREIGN DIRECT INVESTMENTS IN 2000-2004,
HR MILLION
Enterprises with sales of more than 0, As of early As of As of As of As of
SCP category 2001 early early early early
2002 2003 2004 2005
Production of wood and wood products 16.5 20.6 27.0 37.9 48.1
Production of varnishes and paints 3.0 2.5 2.8 4.8 6.6
Production of rubber and plastics 63.9 67.4 77.3 124.6 126.0
Production of mineral nonmetal 65.1 92.3 120.1 153.3 193.2
materials:
Production of glass and glass products 27.6 31.0 34.7 36.4 46.7
Production of ceramic tiles 0.4 0.4 1.9 1.7 7.2
Production of bricks 6.9 8.0 9.4 9.9 15.9
Production of cement, lime, and plaster 2.2 21.2 37.5 56.9 62.4
Production of concrete, cement, plaster, 11.0 10.2 11.2 14.7 19.2
and lime products
Production of dry mortar mixtures 1.6 1.5 1.7 2.0 2.1
Production of other mineral products 15.4 20.0 23.7 31.7 39.7
and materials
However, not all the investment areas are - Extraction of clay shale;
characterized by a positive balance. For instance,
there were significant (over $1 million) investment - Production of ceramic sanitary ware;
outflows in the rubber goods production segment - Production of ceramic insulator parts for ceramic
(minus $2 million) in 2001, in exploration of gravel insulators;
and sand pits (minus $3 million) in 2003, in
production of rubber goods (minus $20 million) - Production of other industrial ceramic products;
and extraction of building stone (minus $3 million)
in 2004, and production of concrete and plaster - Production of other ceramic products;
products (minus $1 million) in nine months of
- Production of fibrous cement products;
2005.
- Production of other concrete and plaster
Some segments within the sector are unattractive
products.
for investors in general, with no or minimal
investments. This primarily applies to:
TABLE 1-50. GROWTH RATE OF FOREIGN DIRECT INVESTMENTS IN THE CONSTRUCTION
MATERIALS SECTOR IN 2000-2004
SEGMENT 2001 2002 2003 2004
Production of wood and wood products 24.8% 31.1% 40.4% 26.9%
Production of varnishes and paints -16.7% 12% 71.4% 37.5%
Production of rubber and plastics 5.5% 14.7% 61.2% 1.1%
Production of mineral nonmetal materials 41.8% 30.1% 27.6% 26%
Production of glass and glass products 12.3% 11.9% 4.9% 28.3%
Production of ceramic tiles 0 375% -10.5% 323.5%
Production of bricks 15.9% 17.5% 5.3% 60.6%
Production of cement, lime, and plaster 864.9% 76.7% 51.7% 9.7%
Production of concrete, cement, plaster, and lime -7.3% 9.8% 31.3% 30.6%
products
Production of dry mortar mixes -6.3% 13.3% 16.5% 6.1%
Production of other mineral products and 29.9% 18.5% 33.8% 25.2%
materials
Prepared by BIZPRO 63
2. PRODUCTION
2.1. ORGANIZATION AND STRUCTURE OF PRODUCTION
There are construction materials production - A mechanical repair department
facilities in nearly all parts of Ukraine. According
to Ukraine’s State Statistics Committee, there are - Warehouse facilities
nearly 9,000 plants, firms or organizations - A motor transport department.
employing more than a million persons.
The administration and management are
The range and quality of Ukrainian products, comprised of:
however, does not always comply with the
requirements of modern building practices. - Director
This significant gap is due to the inadequate - Chief engineer
technological level of production. Investment and
innovation projects are needed. - Finance or planning and economics department
Enterprises working on foreign markets and those The majority of enterprises have their own testing
and research laboratories and R&D departments,
that have received international quality certificates
have organized their production and management which mainly concentrate on developing new
in accordance with international standards. Their products, testing their own products, and
comparing those products with the competition’s.
employees have appropriate qualifications.
Construction materials enterprises are distributed
The production is ensured by:
rather uniformly throughout Ukraine; however, the
- Shops for product manufacturing and packaging. largest number of such enterprises are
concentrated in Lviv and Kharkiv oblasts.
The number of shops in an enterprise depends on
the number and variety of production lines, This concentration is due to the operation of free-
enterprise size, and production volume. economic zones in the area and the proximity of
raw materials sources in the oblasts.
- A quality control department
- A laboratory for testing product conformity with
state standards and international standards;
Prepared by BIZPRO 65
TABLE 2-1. STRUCTURE OF ADMINISTRATIVE-TERRITORIAL LOCATIONS OF CONSTRUCTION
SECTOR PRODUCERS
Oblast Number, %
Lviv 10%
Kharkiv 10%
Kyiv City 9%
Donetsk 8%
Zhytomyr 6%
Zaporizhzhya 5%
Ivano-Frankivsk 4%
Poltava 4%
Sumy 4%
Kherson 4%
Khmelnytsky 4%
Kyiv 3%
Mykolaiv 3%
Odesa 3%
Crimea 2%
Vinnytsya 2%
Volyn 2%
Dnipropetrovs’k 2%
Zakarpatska 2%
Kirovohrad 2%
Luhansk 2%
Rivne 2%
Ternopil 2%
Cherkasy 2%
Chernivtsi 2%
Chernihiv 1%
FIGURE 2-1. STRUCTURE OF ADMINISTRATIVE-TERRITORIAL LOCATIONS OF CONSTRUCTION
SECTOR PRODUCERS
Construction materials are made at enterprises of for the absolute majority of employment.
different sizes; however, large enterprises account
TABLE 2-2. ENTERPRISE SIZE AND EMPLOYMENT
Enterprise size Number of enterprises, Employment, percent of the total
percent of the total number employment in the sector
in the sector
Small 43.4 1.5
Medium 34.4 7.0
Large 22.2 91.0
Total 100.0 100.0
Prepared by BIZPRO 65
More than half of construction sector enterprises enterprises, operating since the Soviet era (more
have operated on the Ukrainian market for up to than 50 years).
ten years; however, about 10% are older
FIGURE 2-2. CONSTRUCTION SECTOR ENTERPRISES’ DURATIONS OF OPERATION
10,8
15
10 years or less
11 to 30 years
31 to 50 years
56,7 more than 50 years
17,5
Based on 2005 performance, 53.7% of companies in 2005 against 2004 (62.7%), while
enterprises evaluated their position as profitable; only 13.1% of companies testified to a decline in
36.3% said they were breaking even; and 10% the production volume. Every fifth company
said they saw losses in 2005. Production volume (20.5%) noted no change.
in physical terms increased for the majority of
FIGURE 2-3. CHANGE OF PRODUCTION VOLUME FOR COMPANIES IN CONSTRUCTION
MATERIALS SECTOR IN 2005, AS AGAINST 2004
3,3
6,6
Refused to answer
13,1
S
ource: Survey of 122 enterprises in the construction materials sector.
Among enterprises where production volume volume in physical terms increased by 74.1%. But
increased, the increase averaged 32.8%; this indicator is 56.4% for medium-sized
production volume decline averaged 23.1%. enterprises and 61.4% for small enterprises.
Also, the production volume increase is more
typical for large companies, where production
Prepared by BIZPRO 66
FIGURE 2-4. CHANGES IN PRODUCTION VOLUME AT CONSTRUCTION MATERIALS
ENTERPRISES OF DIFFERENT SIZES IN 2004
The indicators showing changes in utilization of registered at 41.8% of enterprises. For 37.7% of
production capacity in 2005 compared to 2004 enterprises, production capacity utilization
appear to be somewhat lower, with increases percentage did not change.
3.3
7.4
Increased
41.8 Decreased
Unchanged
Difficult to tell
37.7
Refused to answer
9.8
Among enterprises where production capacity companies, where approximately the same
utilization increased, the increase averaged percentages of enterprises (51.9% and 48.7%,
31.7%, with an average decrease in utilization of respectively) showed an increase in this indicator.
22.7%. There were only 41.9% such producers among
small enterprises.
The increase of production capacity utilization was
more pronounced among large and medium-sized
FIGURE 2-6. CHANGE IN PRODUCTION CAPACITY UTILIZATION AMONG CONSTRUCTION
MATERIALS ENTERPRISES OF DIFFERENT SIZES IN 2005, COMPARED TO 2004
Prepared by BIZPRO 67
Significant qualitative changes have been underway to production of materials and products
underway in the last two years (2002-2005) in needed by the market (based on new technology,
terms of the structure of production and with new properties and functions) and that
organization of construction materials. Enterprises conform to modern building requirements and can
are introducing new technology; modernizing their replace imported products (ceramic products,
facilities (mainly through foreign direct wood products, varnishes and paints, mineral
investments and own capital); introducing foreign materials and products, bricks, dry building
technology and implementing international quality mixtures).
assurance systems.
Quite a significant proportion of enterprises have
Thanks to stabilization of economic and regulatory renewed their product ranges. According to the
policy, importers are opening branches and survey, 37.7% expanded the range of their
production facilities in Ukraine, which is resulting products. Some 48.4% kept their product ranges
in production growth in the sector, in both virtually unchanged.
quantitative and qualitative terms. Transition is
FIGURE 2-7. CHANGES IN PRODUCT RANGES OF CONSTRUCTION MATERIALS ENTERPRISES
IN 2005, COMPARED TO 2004, PERCENT OF ENTERPRISES
6.6 2.5
4.9
There are some differences in this respect medium-sized and only 53.8% are small. It can be
between enterprises of different size. The largest assumed that large enterprises pay more attention
proportion of those buying equipment are large to upgrading production and have greater financial
companies (81.5%), whereas only 61.0% are capacity for it.
Prepared by BIZPRO 68
FIGURE 2-9. PROCUREMENT OF EQUIPMENT BY CONSTRUCTION MATERIALS ENTERPRISES
OF DIFFERENT SIZES IN 2005, PERCENT OF ENTERPRISES
Among enterprises that bought new equipment, and small enterprises turned out to be closer, with
entrepreneurs gave preference to Ukrainian such equipment being procured by 36.0% and
equipment, which was bought by 81.1% of 37.0% respectively, while 45.5% of large
enterprises. Equipment from other countries was companies bought foreign equipment. Thus, not
procured by only 39.2% of enterprises. only did large companies buy more equipment in
general, they also bought more foreign
The percentage of Ukrainian equipment procured equipment. This points to the greater financial
is somewhat higher among large and medium- capacity of these companies. Large enterprises,
size enterprises, with 81.8% and 84.0%, thanks to their greater financial capacity, can
respectively, buying it. Some 77.8% bought such afford to buy more expensive foreign equipment,
equipment among small enterprises. As regards whereas smaller enterprises have to do with lower
procurement of foreign equipment, medium-sized quality, cheaper, domestic equipment.
FIGURE 2-10. PROCUREMENT OF EQUIPMENT FROM VARIOUS COUNTRIES BY CONSTRUCTION
MATERIALS ENTERPRISES OF DIFFERENT SIZES IN 2005, PERCENT OF ENTERPRISES
Large
81.8 45.5
enterprises
Procurement of Ukrainian
equipment
Medium-sized
84 36 Procurement of foreign equipment
enterprises
Small
77.8 37
enterprises
Not too many companies (just 25.0%) bought both Enterprises mainly bought brand-new rather than
Ukrainian and foreign equipment. Again, large used Ukrainian and foreign equipment. In
companies emerged as leaders in such mixed particular, among enterprises that bough
procurements, while a third of large enterprises Ukrainian equipment, 84.7% bought brand-new
(33.3%) bought both Ukrainian and foreign equipment and 38.3% bought second-hand. This
equipment, as compared with 23.8% for medium- proportion is 85.7% to 17.9% for foreign-made
sized enterprises and 19.0% for small enterprises. equipment.
Foreign equipment was mainly imported from
Germany, Italy, Poland, and Russia.
Prepared by BIZPRO 69
FIGURE 2-11. RATIOS OF NEW AND SECOND-HAND EQUIPMENT BOUGHT IN 2005,
PERCENT OF ENTERPRISES*
84.7 85.7
38.3
Brand-new equipment
Used equipment
17.9
Therefore, some enterprises were buying both procurements is among small enterprises
brand new and second-hand equipment. In (35.3%), and the lowest is among large
particular, among the enterprises that bought enterprises (20.0%).
Ukrainian equipment, 28.0% bought both brand-
new and second-hand equipment, whereas for Almost exclusively, enterprises bought new
foreign-made equipment, this proportion is only equipment with their own funds: e.g., 91.8% of
4.2%. enterprises bought new Ukrainian equipment with
their own money and 82.1% were bought foreign-
Notably, all enterprises, large and small, procured made equipment. Some 26.2% of enterprises
both brand new and used equipment at the same bought Ukrainian equipment on credit, and 35.7%
time, even though the highest proportion of such bought foreign-made equipment on credit.
91.8
82.1
1.7 0.0
Ukrainian equipment Foreign-made
equipment
Production is developing quite briskly in the dry Since it is operating at full capacity, Knauf is
building mixtures segment. Based on a review in thinking of building a new plant near the old one,
the Ekonomicheskiye izvestiya newspaper with several times the old one’s capacity. The new
(http://www.eizvestia.com/?a=article_review&id=2 plant is expected to start production in late 2006
076) active efforts to boost production capacity or early 2007.
are being pursued by the following companies:
2. The Lafarge international building concern
1. The Knauf concern of Germany launched plans to build its own dry building mixtures facility
production of dry plaster mixtures in an existing in Armemivske, Donetsk Oblast, in 2006.
facility in Soledar, Donetsk Oblast, at the end of According to the company’s management, the
2004. The plant’s capacity is about 60,000 tons. future capacity of the new plant will b 60,000 to
Prepared by BIZPRO 70
100,000 tons per year. It will operate jointly with a
plasterboard plant, whose construction is also
80
being planned. Total investment in these projects €6.5 million, including €4 million for procurement
amounts to €25 million. of equipment and €2.5 million for erection work,
establishment of a quality control laboratory and
3. Some €2 million was invested in a new dry site improvements. In the first six months of 2007,
mixtures facility at the OJSC Pavlohradzhilstroi. Henkel Bautechnical plans to launch the third
The new facility was launched in late September. plant for production of dry mixes in southern
According to enterprise’s management, the plant Ukraine (Kherson oblast) with a capacity of
used equipment made by leading European 160,000 tons per year.
manufacturers. Its capacity is 60,000 tons based
on one-shift operation, and plans are to make 50 9. Polirem, Fomalhaut, and Pavlohradzhilstroi
products (capacity is estimated to be about implemented large-scale modernization /
150,000 tons per year). The scope is impressive, reconstruction of their production lines in 2004
as Pavlohradzhilstroi’s old facilities allowed for and early 2005.
making only up to 40,000 tons of dry building
mixtures per year. 10. The Budindustriya Integrated Works, based in
Bakhchysarai, has also made a claim to becoming
4. The Kyivmiskbud holding is keeping step with an active player on the market of dry building
the trend and has started building a plant with an mixtures. Information has already appeared in
estimated capacity of 60,000 tons of mixtures per news sources to the effect the Budindustriya plans
year. to build a plant for manufacturing dry building
mixtures, including those for plastering,
5. Polirem Ltd. of Kyiv expects to complete smoothing, tile cement, and poured floors. Varnish
building a huge plant of dry mixtures in and paints solutions will also be made. The
Kamyanets-Podilsky in 2007-2008. The site has capacity will be as many as 30,000 tons. The
an excellent raw materials base, including plaster Bakhchysarai company intends to use local raw
and cement plants and a ground limestone plant. materials and imported additional and
The annual capacity of the plant is 500,000 tons. supplementary components.
The plant is already operational, with the first
stage put into production in fall 2004. Total Modernization of cement industry plants is a
investment is estimated at about €15 million. super-urgent task today, since by upgrading
According to the company, this plant will be the production facilities enterprises will be able to not
largest in all post-Soviet countries. just significantly reduce production costs, but also
substantially improve product quality. The main
6. There are reports that the Austrian holding task for producing quality cement is to obtain a
Schmidt Industrie, a prominent European raw-material mixture of constant composition. The
manufacturer of construction materials under TMs raw materials processed by the cement industry
Baumit, Murexin, Austrtotherm, and others, is to differ not just in composition, but also in their
start building a plant with a capacity of at least physical and technical properties (humidity,
200,000 tons per year near Kyiv in 2006. The strength, etc.). Each type of raw material should
Austrians are providing no further details about have a pre-processing method selected, which
the project. would ensure fine grinding and uniform mixing of
7. Fomalhaut Ltd. this May launched a new line mixture components with minimal energy
for production of cement-sand mixtures with a consumption. Today, there are three main
capacity of 60,000 tons per year. The investment methods of production: wet, dry, and combination
amount is €2.1 million. The core machinery is method.
manufactured by the Zhytomyr Budmash plant, With the wet method, fine grinding of primary mix
and the electronic units are supplied by the WAM is conducted in a water medium, with the blend
company of Italy. Based on this plant, the emerging as an aqueous suspension – sludge
Fomalhaut Design Bureau has developed a with 30%-50% humidity (StroyHelp.ru).
project for production and rapid deployment of
mobile, quick-installation production lines of With the dry method, the raw material mix is
similar capacity. The company promises to start prepared as finely ground dry powder. Therefore,
installing such lines in each region of Ukraine in before or in the process of grinding, base
the nearest future. Even today, a new facility is materials are dried. Contrary to the wet method
being built in an eastern region (the extract (which involves firing the moist mix in a furnace),
location has not been disclosed). It should start the “dry” method allows for drying the base
production early next year, and full-capacity components, to be followed by their blending and
operation in May 2006. firing. The combined method may be based either
on a wet or on a dry method of blend preparation.
8. Considerable production facilities were also In the first case, the base mix is prepared
launched in 2004 and early 2005, including a new according to the wet method as sludge, and then
Henkel Bautechnik (Ukrayina) Ltd. plant in the dehumidified by filter to 16%-18% moisture
Kharkiv region. Total investment amounted to
Prepared by BIZPRO 71
content, and fed to furnaces for firing as semi-dry
mass. In the second option, the base mix is
82
prepared according to the dry method, and then additives to the concrete and mortar mixes, e.g.,
granulated with an addition of 10%-14% of water cinder produced by cogeneration plants. Of great
and fed for firing as 10 mm -15 mm pellets. Each importance for economical use of cement is
production method can be implemented as selection of the most effective cement application,
several process flows, differing both in the with due account for its mineralogical composition
sequence of operation and the type of equipment and physical and mechanical properties.
used. The choice of a specific process flow will Significant savings of cement at concrete and
depend on the properties of the raw materials to prefabricated concrete plants can be achieved
be processed (hardness, uniformity, moisture through:
content). One of the main ways of reducing fuel
consumption in cement production consists in - optimization of concrete compositions;
minimizing the sludge humidity. Each percentage - using increased rigidity mixtures with compaction
point the sludge humidity is reduced allows for on resonant and shock vibration platforms;
reducing specific fuel consumption for clinker
firing by an average of 117 to 146 kilojoules/kg, - preheating of concrete mixes and curing of
i.e. by 1.7% to 2%. Specific firing heat products after heat treatment;
consumption for the dry method amounts to 2900-
3750 kilojoules/kg of clinker, while wet method - increasing the duration of heat treatment;
consumption is two to three times greater. By
- expanding the production volume of structures
adding blast-furnace slag or thermal power plant
with negative tolerances;
cinder to the raw material, fuel consumption can
be reduced by 15%-18%. When producing slag - improving the process and control equipment.
portland cement, additional fuel economy savings
add up to 30%-40% on average, compared to One of the most promising directions for reducing
purely clinker portland cement. cement consumption consists in using chemical
additives. Traditional chemical additives like SDB
The “dry” method of production seems to allow for reducing cement consumption by 5% to
represent the way forward for cement companies. 10%. Possible reduction of cement consumption
This method, according to expert estimates, is when using modern fluidifiers may reach 15%-
25%-30% more efficient than the traditional “wet” 25%. Until recently, various types of industrial
method and provides 50% fuel economy. waste were used as fluidifiers. As a rule, their
However, investments totaling €50-€55 million will efficiency was low, due to unstable chemical
be required to implement the transition to the “dry” composition. Today, they have started producing
method. Still, after changing to this method, an effective C3 fluidifier. This agent’s addition to
increase in cement production could reach more concrete can save up to 20% of cement (with the
than 15 million tons in the nearest future. This same plasticity of concrete mix); without reducing
would allow increased efficiency in cement the cement consumption and without increasing
production, thanks in addition to economical use plasticity of the concrete mix, however, by
of base components. Adding blast-furnace slag or reducing its water-to-cement ratio, the concrete
TPP cinder to the raw materials mix will reduce strength can be increased by 20%-25%. An
fuel consumption by 15%-18%. When producing additional source of cement economy, while
slag Portland cement, additional fuel economy retaining concrete’s high quality, consists in
amounts to 30%-40% compared to purely clinker applying statistical strength control. The
Portland cement. application of the required concrete strength,
taking into account its uniformity, provides, given
The main source of losses in cement production
good manufacturing practices, a reduction of
consists in leakage, due to imperfect dust traps at
concrete consumption by 5%-10%. Experts argue
milling plants. One of the reasons for excessive
that cement consumption can be reduced (with
consumption is mixing of cements of different
the quality and longevity of structures improved)
grades and types, given a lack of sufficient
by making concrete from clean, graded
number of hoppers for their storage. In these
aggregates. Organizing production of such
cases, manufacturers are forced to use the
aggregates would require significant capital
consumption rates for the worst of the cement
outlays; however, it is much more beneficial for
grades being mixed, which leads to their
the national economy, compared with the cost of
consumption increase by 6%-8%. It is important to
repairing and replacing reinforced-concrete
use quality concrete aggregates. Every percent of
structures that frequently fail before their rated
aggregate contamination equals additional
service lives expire.
consumption of approximately 1% of cement. It is
not economical to use grade 400 cement for In foreign building, no company is making
making M100 and M150 concrete, as well as concrete using one grade 5 mm – 20 mm
grade 50 and 75 mortar. In these cases, a aggregate. For instance, in Finland, they use four
significant reduction in cement consumption may grades of clean, large aggregate and low grades
be achieved by introducing mineral disperse of small aggregate. In this case, the uniformity of
Prepared by BIZPRO 72
the finished concrete is so high that its strength is avoided when transporting cement clinker, whose
determined based on tests of one sample: the quality does not deteriorate during transportation
concrete manufacturer guarantees its grade and storage, in distinction to cement. Clinker can
strength. be ground on site to produce fresh high-activity
cement.
Cement efficiency can be improved (and its
consumption therefore reduced) by increasing the Transportation of cement should be conducted in
fineness of its grinding. Prefabricated concrete special-purpose vehicles. Transport in bulk-
plants, in order for the concrete to reach its un- cement carriers lead to losses during handling
shuttering strength, often overstate the concrete operations that are on average ten times lower
grade by increasing cement consumption. This than losses from transport in covered railroad cars
can be avoided by using a finer ground binder: and 40 times less than from transport in
using such a binder, concrete setting at early age uncovered rolling stock. Generally, the main
would occur faster. For economy’s sake, sand, directions for the cement industry’s development
limestone or any other aggregate might be added today include:
to cement, and additional grinding of the mixture
implemented. However, as research shows, this - technical re-equipment and reconstruction of
decreases the binder’s strength, even though not plants to increase the percentage of “dry” cement
in direct proportion to the amount of added manufacturing method to 80%-85%;
aggregate. To produce concrete of up to 200 - development and implementation of high-
grade and even higher, such a binder is quite efficiency, energy-saving technology;
acceptable. Depending on the amount of added
aggregate (30%-50%), up to 50% of cement can - preparation for and transition to using coal and
be saved. Certain reserves for reducing cement fuel-containing industrial waste as processing fuel;
consumption are contained in the technology of
separate concrete mix preparation. Even though - re-equipping the machine-building base and
the method has been known for a long time, it has organizing mass production of new-generation
not been applied in concrete technology until now. cement-producing equipment;
To get the required effect, one would primarily
- reducing hazardous atmospheric emissions and
need high-speed mixers with capacities
improving working conditions.
corresponding to the volumes of mix required for
one batch of concrete mixture in a common mixer. As regards the technological equipment of
Cement can be saved by using high-quality forms Ukrainian glass processors, the situation is quite
for samples, taking into account subsequent encouraging. Much new glass processing
increases in concrete strength, carefully selecting equipment has been procured and installed in
concrete and mortar compositions, using Ukraine. New, expensive machines have
automatic batchers for components, etc. appeared, such as glass-hardening furnaces and
the so-called “jumbo” size glass-cutting machines
An effective quality assurance system is the basis
(6,000 and 3,210). This process continues
from a cement plant’s economic sustainability. It is
actively, and based on the nearest plans of a
an important indicator of a company’s
number of companies, this type of equipment
competitiveness on the domestic market and the
could be seen in many parts of Ukraine soon.
essential condition for successful foreign sales.
The majority of companies are devoting more Due to lack of domestic production of glass-
attention today to the quality of their products. For making equipment, Ukrainian glass-makers are
example, where primary components were added forced to buy this equipment mainly in Western
“by sight” previously, today dosing is done using Europe (China is also starting to enter the global
special automatic batchers. This allows for market for glass industry equipment and
products of consistently high quality. technology), which involves considerable financial
outlays.
Packaging of products is also undergoing
changes. Where earlier cement was packed only Nearly all brick plants in Ukraine require partial
in 50-kg paper bags, now products are packed in modernization. Usually, new Ukrainian equipment
bags of 20, 25, 1000, 15000 and even 5 kg. is used for such modernization, as well as
Attention is being paid to cement transportation second-hand German or French machinery.
and storage. It has been estimated that cement
losses due to improper transportation are Baking furnaces and driers represent the core of
significantly higher than normal. No bulk process equipment and their quality is very
transportation of cement in railroad cars should be important for efficient and economic production.
allowed. Nor should manual unloading, bulk Usually, Ukrainian enterprises use equipment of
storage under tents and in barns, or re-shipping such brands as Lingl, Rieter Werke, Morando,
and re-loading from one type of transport vehicle Nosenzo, Agemak, Verges, and Pragoinvest.
into another. In the latter case, losses could be
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New companies are constantly emerging in the
varnish and paint segment, while the “old”
85
players expand and modernize existing facilities. an agreement on production of parquet in the city
For example, the Dnipropetrovs’k Varnish and of Kalush, Ivano-Frankivsk oblast (with total
Paint Plant and CJSC Khimreserv have each investment of about €100 million).
invested Hr2.5 million in modernization. CJSC
Lakma invested Hr1.7 million; Splav MV Ltd. – Also in this sector, there was new that in
Hr1.6 million; Timeks Ltd – Hr1.2 million; CJSC Vinnytsya, Barlinek-Ukrayina recently leased 5.8
Korosten Yantar Plant – Hr0.5 million (Budivelnyi hectares of land, to build the second phase of a
Zhurnal, No.5/2006, p.34). A new CJSC Polifarb woodworking plant. By the year 2008, the Polish
Ukrayina plant rated for up to 15,000 tons of company plans to have invested €40 million in the
paints and varnishes per year was officially Vinnytsya plant to create a full manufacturing
launched in Dnipropetrovs’k in 2003 (a joint cycle and triple its capacity. Earlier, in April 2006,
project of Polifarb Ltd. and Sigma Kalon, an Barlinek-Ukrayina put into production a
international concern, which has invested $1.5 woodworking plant worth €3 million in Vinnytsya
million in this production facility). The Finnish (the plant makes parquet board work pieces, and
Tikkurila Group bought a controlling block of has a capacity of 45,000 m3 of wood per year,
shares from Farby Koloryt Ltd. in 2004, while the with the wood to come from forestry enterprises in
Russian CJSC Empils, based in Rostov-on-Don, western Ukraine; however, all the plant’s output is
launched its own facility in Ukraine to produce being exported to Poland).
varnishes and paints at the Elaks Plant in Odesa. The process of expanding production capacity is
Not so long ago, Henkel Bautechnik started also underway in the roofing materials sector. For
production of acrylic, silicone and silicate Ceresit example, the Slavuta Ruberoid Plant has installed
paints at its facility in Balakliya (Kharkiv oblast), at a second line, which boosts the plant’s output to
a line with a capacity of close to 30,000 tons per 35,000 m2 per year. Russia’s Tekhnonikol has
year, after investing €550,000 in this facility. Akzo launched its own plant in Dniprodzerzhinsk.
Nobel announced in late 2005 about its Akvaizol, based in Kharkiv, has started making
acquisition of the well-known Ukrainian producer waterproofing materials, having invested $3
of varnish and paint materials CJSC Khimreservs. million in a plant to make nonwoven polyester (the
Caparol, a well-known German producer of base for euro-ruberoid production) with a capacity
varnish and paint materials also plans to build its of 20 million m2. With a total Ukrainian market
plant in Dnipropetrovsk in early 2007. During the capacity of 31 million m2, the aggregate
first phase, the company is expected to invest production capacity of Ukrainian manufacturers
several million euros in this project. has increased to 70 million m2, which has caused
In the wood products segment, the last to tough competition. Expanded production and
announce significant investments were market stagnation have led to a situation in which
representatives of Vinilin Ltd. and Sintelon of about 15%-20% of the construction materials
Serbia (source: Documentinform), which signed produced in 2005 remain in warehouses.
Prepared by BIZPRO 74
FIGURE 2-13. IMPLEMENTATION OF NEW DEVELOPMENTS BY ENTERPRISES IN THE
CONSTRUCTION MATERIALS SECTOR IN 2003-2005, PERCENT OF ENTERPRISES*
The likelihood of making product innovations 43.6%, respectively), whereas the share of such
depends to a significant degree on a company’s enterprises among large companies was only
size. The greatest proportion of enterprises that 18.5%. The level of development of radically new
did not pursue any developments were among products is also lowest among small enterprises
small and medium-sized enterprises (42.3% and (only 13.5%).
66.7
Only a little more than one third of enterprises to buying new technology often in this period (2.1
(37.0%) bought new technology in 2003-2005. times on average).
Moreover, enterprises in the sector did not resort
Prepared by BIZPRO 75
FIGURE 2-15. PROCUREMENT OF NEW TECHNOLOGIES IN 2003-2005, PERCENT OF
ENTERPRISES
37.0
Enterprises procured
new technologies
The lowest percentage of enterprises buying new among enterprises that new technology, the
technology is found among small enterprises, lowest average frequency of procurement was
32.7% of which procured such gear in 2003-2005. among large enterprises, which bought new gear
Their proportion among larger enterprises is about 1.5 times. This number was 2.1 times for small
one third (36.6% of medium-sized enterprises and and 2.5 times for medium-sized enterprises.
46.2% of large enterprises). At the same time,
FIGURE 2-16. PROCUREMENTS OF NEW TECHNOLOGIES IN 2003-2005, PERCENT OF
ENTERPRISES
9.0
15.3
Illegal copying of industrial
models is very common
Illegal copying of industrial
models occurs sometimes
Normally, there is no illegal
copying of industrial models
75.7
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Interestingly, representatives of large companies problem for their own companies. Medium-sized
appear more optimistic about this issue, with enterprises experience the problem of illegal
80.8% claiming there are practically no cases of copying of industrial models to a lesser degree
illegal copying of industrial models (compared to than other enterprises, with 12.5% of them
74.5% among small enterprises and 73.5% indicating this problem exists specifically for their
among medium-sized enterprises). company. Some 17.4% of large and 20.0% of
small enterprises experience this problem.
Also, the majority of entrepreneurs (82.9%) do not
perceive illegal copying of industrial models as a
FIGURE 2-18. ENTREPRENEURS’ ASSESSMENT OF THE THREAT OF ILLEGAL COPYING OF
INDUSTRIAL MODELS SPECIFICALLY FOR THEIR COMPANY, PERCENT OF ENTREPRENEURS
87.5
80.0 82.6
- metal reservoirs for oil and petroleum products, - concrete roofs for industrial buildings;
gas holders, and water tower structures;
- reinforced concrete floor panels;
Prepared by BIZPRO 77
- reinforced concrete slabs for paving city roads; with these standards. The list of standards
govering how building are manufactured in
- reinforced concrete supports for power Ukraine is provided in Appendix 10.
transmission lines, telecommunications lines, and
components of contact systems of electric Looking ahead, and wishing to satisfy customers’
railroads and lighting systems; requirements, win tenders, and export their
products abroad, manufacturers resort to another
- prestressed reinforced concrete railroad ties; more efficient method of proving product quality:
- reinforced concrete stair components; they certify their products according to
international certification systems.
- reinforced panels for balconies and loggias;
The practices of foreign and leading Ukrainian
- windows and doors for buildings and structures; enterprises indicate that compliance with the
international ISO standards of the 9000 series
- rock masonry units; ensures the required quality level and
competitiveness of products and services both on
- ceramic and concrete roofing tiles.
the domestic and foreign markets.
A certified quality system is practically obligatory
The experience of Ukrainian enterprises, which
for design and building institutes and
have effective quality assurance systems (which
organizations.
are powerful tools for improving competitiveness
The standards in effect for materials developed in and reducing costs), shows that for many
Ukraine have already become somewhat companies this task is feasible, provided top
obsolete, as the market is developing, new management is engaged in it.
products are emerging, and new technologies and
Today, an international quality certificate is
market requirements are evolving. However, if a
mandatory only for exporting enterprises. Every
company operates only on the domestic market
company, however, that wasn’t to improve its
and is not actively engaged in renewing its
standing and look toward the future, can obtain
product range, the existing standards are relevant,
the certificate, irrespective of whether it exports or
as their technologies are in conformity specifically
not.
TABLE 2-3. KEY MANUFACTURERS IN THE CONSTRUCTION SECTOR THAT HAVE
INTERNATIONAL CERTIFICATES
Enterprise Product International certificate
CJSC Slobozhanska Brick Quality management system certificate ISO
budivelna keramika 9000:2000
CJSC Novoselivka Mining Kaolin Quality management system certificate ISO
and Concentration Intergrated 9000:2000
Plant
OJSC Kyivguma Rubber Quality management system certificate ISO
9000:2000
Pavlohradzhylbud Dry building mixtures Quality management system certificate ISO
9000:2000
Polirem Company Dry building mixtures Certificate for quality control system as per
international standards ISO 9001 in 2005
Fomalhaut Company Dry building mixtures Certificate for quality control system ІSO
9001 in 2003
NVP Helios Ltd. Dry building mixtures Certificate for quality control system as per
international standards ISO 9001:2000, in
2005
CJSC Lysychansk Proletoriy Glass Certificate for quality control system as per
Glass Plant international standards ISO 9001:2000
OJSC Dniprocement Cement Certificate for quality control system as per
international stndards ISO 9001:2000, in
2004
CJSC Nifar Varnish and paint Certificate for quality control system as per
industry international standard ISO 9001:2000
OJSC Zevs Keramika Ceramic products Certificate for quality control system as per
international standard ISO 9001
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OJSC Kovalska Reinforced Reinforced concrete Certificate for quality control system as per
Concrete Plant products DSTU ISO 9001:2000, in 2003.
Certificate for system of quality management
as per international standards ISO
9001:2000, received from German
certification authority for Systems TUV
NORD CERT for plant’s building activities, in
2005.
Slavuta Ruberoid Plant Roofing materials Certificate for quality control system as per
international system ISO 9001:2000
About a quarter of the enterprises whose products on demand for their products is very relevant;
are subject to mandatory certification in Ukraine 7.0% of entrepreneurs note the high negative
do not regard the existing national standards as influence of obsolete standards on the range of
obsolete. In particular, 25.3% of entrepreneurs products; and for 10.7% of entrepreneurs, the
whose enterprises are certified disagree with the impact of obsolete national standards on
statement that existing national standards do not increased production costs is extremely relevant.
conform to modern manufacturing technologies,
28.6% of enterprises disagree with the statement Some 19.5% of entrepreneurs regard non-
that products manufactured according to national conformity of obsolete technology with present-
standards are not in demand, 30.2% disagree with day manufacturing technologies as minimally
the statement that the national standards do not relevant for their companies. That products are
allow for expanding product range, and 28.6% of manufactured according to obsolete standards
enterprises disagree with the statement that and are not in demand is marginally relevant for
observing national standards raises production 17.9% of enterprises. The problem of obsolete
costs. standards as an obstacle towards expanding
product range is minimally relevent for 23.3% of
The rest of the entrepreneurs whose products are enterprises; and impact of obsolete standards on
subject to obligatory certification believe the increased production cost has low relevance for
national standards are obsolete and that this 21.4% of enterprises.
affects, to varying degrees, various aspects of
manufacturing and selling construction materials. Ukrainian manufacturers, then, are not overly
In particular, 10.3% of entrepreneurs believe concerned with the existing national standards.
obsolete standards are severely interfering with Even if these standards are obsolete, they don’t
operations due to the standards’ incompatibility interfere with manufacturers’ sales. Therefore,
with modern manufacturing technology; for 10.7% they are paying little attention to this matter for the
of entrepreneurs the impact of obsolete standards time being.
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TABLE 2-4. RELEVANCE OF PROBLEMS RELATED TO OBSOLETE NATIONAL STANDARDS FOR
ENTERPRISES
5
Standards 1 (Maximu Average
are not (Minimal 2 3 4 m relevance
obsolete relevance) relevance score
)
Obsolete standards
do not comply with
modern 25.3 19.5 9.2 31.0 4.6 10.3 2.7
manufacturing
technologies
Products made
according to obsolete
28.6 17.9 13.1 17.9 11.9 10.7 2.8
standards are not in
demand
Obsolete standards
prevent expansion of
30.2 23.3 14.0 14.0 11.6 7.0 2.5
company’s range of
products
Observance of
obsolete standards
leads to a significant
increase in
production costs and 28.6 21.4 13.1 20.2 6.0 10.7 2.6
renders the product
uncompetitive on the
market
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3. RAW MATERIALS AND
RESOURCES
3.1. SITUATION ON RAW MATERIALS MARKET
Ukraine has abundant natural sources of raw producers have no problems with availability of
materials for production of construction materials: raw materials. At the same time, plentiful raw
deposits of kaolin, lime, gypsum, granite and materials allow satisfaction of foreign market
marble, quartz sand, basalt, chalk, dolomite, and demands.
perlite. Therefore, construction materials
FIGURE 3-1. STRUCTURE OF SALES OF KEY RAW MATERIALS IN 2000-2004, HR MILLION
2000
2026,7 * Acc. To KVED
Source: State Statistics Committee
1226,2
1256,1
1196,2
Hr million
983,3 905,4
1000 896,2 867
688,8 854,1 809,1
772,4 759,7
587,2 691,4
547,3 632,7 636,5
551,2 528,7 547,6
493 468,3
392,5
324,6
We will now consider the raw material production, production for the construction materials sector
import, and export structures in greater detail. At amounted to Hr5,248.2 million.
the end of 2004, the total volume of raw materials
TABLE 3-1. RAW MATERIALS PRODUCTION VOLUME IN PHYSICAL TERMS IN 2003-2004
SCP CODE Raw material 2003 2004
14.11.11.300A Marble and travertine, thousand m3 1.1 4.2
14.11.11.500A Limestone, gypsum and lime alabaster , thousand m3 690.5 900.3
14.11.12.300A Granite, thousand m3 515.9 579.1
14.11.12.330A Crushed (commercial) granite, thousand m3 492.9 550.3
14.11.12.500A Sandstone, thousand m3 44.8 131.7
14.11.12.530A Crushed sandstone (commercial), thousand m3 44.1 45.2
14.11.12.900A Tuff, basalt, porphyry, and other undressed stones, coarsely 138.4 145.3
dressed, and sawn into blocks and slabs, thousand m3
14.11.12.901A Tuff, basalt, porphyry, and other crushed stones (commercial 104.9 105.2
grade), thousand m3
14.12.10.300 Plaster and anhydrite (native or synthetic), thousand tons 813.4 1153.8
14.12.10.310 Plaster, thousand tons 321.4 336.9
14.12.10.500 Limestone (except for crushed limestone aggregate and 19275.2 21275.0
limestone cut to size), thousand tons
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14.12.20.100 Chalk, thousand tons 1217.0 1513.6
14.12.20.300 Uncalcined dolomite (except crushed dolomite aggregate), 8.5 10.8
thousand tons
14.12.20.500 Calcined and fired dolomite, thousand tons 218.5 243.0
14.12.20.700 Agglomerated dolomite (including petrolized dolomite), 982.8 1130.8
thousand tons
14.21.10A Sand, pebbles, gravel, and crushed stone for building, 40509.9 45580.8
thousand m3
14.21.11.900A Other building sands (except metal-containing sand), thousand 5365.6 5680.9
m3
14.21.11A Natural sands, thousand m3 6989.1 7445.5
14.21.12 Pebbles, gravel, and crushed stone, thousand tons 48310.9 54603.3
14.21.12.100A Pebbles, gravel, crushed stone, and silicon, thousand m3 27437.5 31289.2
14.21.12.131A Building gravel (including that used as concrete aggregate), 437.1 393.4
thousand m3
14.21.12.151A Building crushed stone, pebbles, and silicon, thousand m3 24861.1 28663.7
14.21.12.300A Crushed stone used as aggregate for concrete, for road 3384.6 3495.7
pavement, and for other building purposes, thousand m3
14.21.12.500A Marble aggregate, pellets, and powder, thousand m3 24.6 13.9
14.21.12.900A Aggregate, pellets, and powder of other stones, thousand m3 3655.8 4400.4
14.21.12A Pebbles, gravel, crushed rock, and crushed stone, thousand 34502.5 39199.2
m3
14.21.13A Building slag, thousand m3 295.8 354.0
14.22.11 Kaolin and other kaolin clays, tons 1176353.0 1468123.0
14.22.11.400 Kaolin, tons 1072790.0 1365502.0
14.22.11.410 Enriched kaolin, tons 169901.0 202291.0
14.22.12 Other clays, andalusite, kyanite, sylimanite, mulite; chamotte or 7163.6 7771.8
silica earths, thousand tons
14.22.12.300 Refractory clay, thousand tons 5006.1 5249.1
14.30.11.500 Carnallite, sylvite, and other natural potassium salts, tons 58397.0 20700.0
14.30.12.500 Native (unprocessed) or non-refined sulfur (including extracted 98727.0 75281.0
sulfur), tons
14.30.13 Other natural minerals for chemical industry, tons 23912.0 23648.0
14.40.10.000 Salt and pure sodium chloride, tons 2906379.0 3339370.0
14.50.10.000 Natural bitumen and asphalt, asphaltite and asphalt rock, tons 366.0 3.0
14.50.23 Natural minerals, not otherwise categorized, tons 1077137.1 1632057.9
14.50.23.130 Natural graphite, tons 10956.0 10833.0
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FIGURE 3-2. STRUCTURE OF RAW MATERIALS PRODUCTION IN 2004, HR MILLION
1000 926,8
900 838,5
800 722,9
700
594,9
600
Hr million
500
304,5
400
300,2
300 215,8
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Concrete, Cement, sand, crushed Podilsky Cement, Doncement, Yunigranit,
concrete rock, metal Starokostyantynivsky Special Quarry, OJSC Ivano-
products Frankivskcement, Kryvorizhstal
Plaster Plaster Mamalyhivsky Plaster Plant, OJSC Gipsovyk
products
Dry building Plaster, cement, binding OJSC Gipsovyk, OJSC Ivano-Frankivskcement
mixtures agents
Lime Limestone Olenivske OJSC DFDK
Paint Alkydes, dispersion, gas, Khimreserv, Sumykhimprom, Yantar, Khimprom,
dyes, solvents VAMP, Dnipropetrovsk Varnish and Paint Plant,
Dniprodzerzhinsk ZIP
Varnishes Acryl Products imported from Finland, Germany, Turkey
Wood Decidious and coniferous State forestries in the Vinnytsya, Kirovohrad,
products wood, mainly: oak, pine, Zakarpatska, Odesa, Mykolaiv, and Cherkasy
alder, and maple. oblasts
However, for production of many types of building — additives that regulate hardening of concrete
products, raw materials and stock are imported in and mortar;
large volumes, mainly from western Europe and
CIS states. For example, substantial amounts of — additives that increase strength and/or
chemical additives are required to make dry corrosion-resistance and frost-resistance of
building mixtures, and these are mainly imported concrete and reinforced concrete, which reduces
from the Euro-zone; manufacturers of varnish and concrete permeability;
paints products buy the required components — additives that add special properties to
(pigments, fillers, dyes, etc.) abroad. concrete and mortar.
One of the key problems of modern materials Application of additives is implemented in
science is creating new types of cement, accordance with DBN В.2.7-64-97 “Rules of
concrete, building mortars, and dry mixtures that Application of Chemical Additives in Concrete and
can provide high service properties over a long Building Mortar.” Additive widely used in Ukrainian
period of time. Making construction materials building include UPB, LST, PSK, PFS, Dofen, Z-3
would be unimaginable without application of and complexes on the bases UPB + SN, LST +
various chemical additives. Research is SN, Relaksol, PMF-BS, Dofen-M, and others.
underway in Ukraine today to develop competitive
domestic additives. More than a half the volume of concrete mix
produced by a wide network of concrete plants is
Concrete Additives used to make cast concrete or reinforced concrete
Using additives is an efficient way of regulating structures. Therefore, it is essential to provide
concrete’s rheological and physical-mechanical users with quality concrete additives, and use
properties. Foreign experience shows that more efficient pouring methods and concrete pumps. To
than 70% of the total volume of concrete laid uses ensure quality cast structure production and
chemical additives. Despite an increase in price of provide for convenient concrete mix pumping, it is
concrete, use of additives is economically essential to provide such important characteristics
justifiable thanks to improvement of a number of as unmixing capacity, dehydration, and water-
process variables and service properties. retention capacity. Chemical additives are called
on to improve these properties.
The national normative document DSTU Б.В.2.7-
65-97 classifies the additives for concrete and In erecting hydraulic structures, in irrigation and
building mortar based on mineral binders and drainage works, in road construction, in working
assesses their influence on concrete and mortar on widely spread and remote facilities in rural
properties. According to this classification, areas, there often emerges a need for prolonged
concrete and mortar additives, depending on transportation and laying of concrete. The “vital
application, are subdivided into: activity” of concrete mixes can be extended by
introducing hydrophilization and hydrophobization
— additives that regulate properties of concrete additives, e.g., UPB and UPB + HKZh-11. In this
and mortar mixes; case, application of hydrophilizing surfactants of
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various action types has the greatest effect on the The materials used for production of dry mixtures
preservation time and convenient concrete laying. are extremely diverse in their range and
properties. Each material adds certain properties
NK, NKM, NK+UPB, P, P+LST are used as frost- to mixtures and mortars.
resistant additives, applied when preparing
concrete in winter conditions. Use of surfactants in Experts categorize additives and components of
complex reagents makes laying concrete within dry building mixtures into several main groups:
the prescribed process period more convenient.
Complex additives improve concrete’s porous — organic adhesive substances;
structure and facilitate improvement of a number — mineral binding agents;
of its service properties (frost-resistance,
waterproofing). — fillers, including natural-disperse, natural
mechanical disperse, synthetic, reinforcing fibrous
Accelerated concrete hardening both under (natural mechanically disperse, and synthesized);
natural conditions and with heat treatment is of
great practical value. It helps to save energy and — water-retentive additives: water-soluble
material resources, and increase productivity. methylcellulose, bentonitic clays, including
Chlorous additives are the most efficient modified;
accelerants, but they have the major drawback of
causing corrosion of reinforcements. Development — fluidifiers, products of condensation of
of chlorine-free additives with high hardening naphthalensulfonic acid and formaldehyde, and
intensification capacity seems promising. At the complex additives on their basis;
same time, both domestic and international
— antifoaming agents, materials produced on the
experience shows that fluidifiers combined with
basis of organic silicon compounds, higher fatty
surfactants of groups 3 and 4, electrolytes, and
alcohols, and amines;
active mineral agents, allow for not only
significantly intensifying concrete hardening, but — pigments, nonorganic (by chemical
also produce quality, high-strength concrete. composition these could be grouped into oxides –
pigment titanium dioxide, ferrioxide and
Use of chemical additives is also an efficient
chromoxide pigments, salts, Prussian blue) and
method of producing concrete with special
organic (phthalocyanine pigments: blue, green,
properties, including corrosion resistance,
and red colors);
electrical conductivity, and protective properties
with regard to steel reinforcements, embedded — emulsifiers, cationic and anionic surface active
items, etc. There are, however, virtually no special agents;
additives produced for these applications on the
Ukrainian market at present. — setting regulators for building mortars made of
dry mixes: accelerants (mainly, salts of alkaline
The way to increase the efficiency, versatility, and and alkaline-earth metals and of hydrochloric or
multifunctionality of additives in cement systems is carbonic acids) and setting retardants
to apply complex additives based on the (polysaccharides, adhesives of animal origin);
prevailing action of one additive; or multifunction,
complex modifiers with equal contributions from — hydrophobisators: microemulsifying, water-
each component into the summary action; and soluble concentrates of silicone microemulsions
complex additives based on the synergy of and powders on a silane/siloxane base.
individual actions on the cement system. Another
promising direction for further improvement of As a rule, powder raw materials of varying
concrete and reinforced concrete technology also dispersity are used for making dry building
involves making high-efficiency chemical additives mixtures; however, to make certain types of dry
mixtures, use is also made of fibrous materials
for concrete based on specially developed
products from environmentally safe raw materials, with a preset fiber length or gravel size of 3 mm-
including for casting technology for self- 10 mm.
compacting concrete, andnhigh-grade and The above materials have a number of common
special-purpose concrete. Newly developed properties, which are equally important for all
additives should be agreed with the head materials (density, porosity, volume weight) and a
organization of the State Building Committee of number of specific properties, which allow for
Ukraine responsible for use of additives in evaluating the feasibility of their use for the
concrete. or with the Technical Committee on desired purpose (e.g., water-retentive capacity).
Construction Materials, and must be entered in
the existing normative documents on use of Mineral Binders and Fillers
chemical additives in concrete.
Mineral binders and fillers are the main
Additives and Components of Dry Building components for dry mix production. The largest
Mixtures grade sand and fine crushed rock of 3-10 mm
Prepared by BIZPRO 85
may be used as filler in dry mixes intended for adding fluidifiers to dry building mixtures improves
renovation of concrete and reinforced concrete the mix’s building and process properties, and that
structures. it is only the emergence of modern fluidifiers that
has made it possible to produce self-compacting
Water-Retentive Capacity Regulators and self-leveling mixtures.
Water-soluble methylcellulose is used for making Modifiers for Dry Building Mixtures
dry building mixtures. Methylcellulose is capable
of preserving its properties after being dissolved in Despite the fact that the main processes of
water, after repeated dehydration and formation of building mortar’s properties are
dispersion/powdering. The viscosity of determined by interactions within the system of
methylcellulose solutions is within 400 to “mineral binder - aggregate - water”, adding
40000 Mpa.s. It depends on molecular weight, homorganic and organic modifiers into this system
concentration of methylcellulose in the solution, can change properties of practically all materials.
temperature, and chemical modification. With Mortars can be made with preset properties and
higher temperatures, viscosity of methylcellulose that are intended for use under diverse, even
solutions is decreasing. As viscosity increases, extreme, conditions. Use of modifiers in dry
the water-retentive capacity is growing. The same building mixtures allows for changing, within a
effect is observed when increasing the wide margin, the process properties of mortar
methylcellulose concentration in the solution from mixes and mortar’s building and technical
0.1% to 0.3%. properties. It has also opened an opportunity for
applying thin-layer technology and machine
In making dry mixtures, using bentonitic clay application technology. The range of such
modified with organic bases is also additives is extensive today. They include
recommended. They have a lesser impact on the surfactants, water-soluble polymers, water
water-retentive capacity of building mortars than dispersions of polymers, electrolyte additives, and
does methylcellulose. others.
Fludifiers Use of modifiers in mortar and concrete has a
The key advantage of fluidifiers is that with the long history. Adding vegetable oil, animal blood,
same water-to-cement ratio, they significantly egg whites, dairy products, and tree bark
improve the flowability of concrete and mortar, concoctions into lime concrete and mortar has
without impairing the strength of hardened mixes. made it possible to preserve the churches of the
Use of fluidifiers in the composition of dry building ancient Russian towns of Vladimir and Suzdal,
mixtures, in combination with other modifiers, mosques in Bukhara and Samarkand, and the
allows for creating high-strength, self-leveling famous Charles Bridge in Prague.
building mixes intended for both manual and With the emergence of hydraulic binding agents,
mechanized laying. the modifiers used by builders of old receed into
Depending on the chemical base, fluidifiers are the background and were undeservedly forgotten.
subdivided into the following types: Only in the 1930s did use of modifying agents in
concrete and mortar reappear in building, albeit at
— fluidifiers based on sulfurized melamine- a new scientific and technological level. In many
formaldehyde compounds and derivative industrially-developed countries, the percentage
complexes; of concretes and mortars produced with modifying
agents approaches 90%-95%
— fluidifiers based on sulfurized naphthalene-
formaldehyde compounds and derivative The special feature of using modifiers in dry
complexes; building mixtures exists in the technology of their
application. If in making concrete and mortar,
— fluidifiers based on modified lignosulfanates; additives are introduced as solutions, dispersions,
emulsions, and suspensions, for dry building
— fluidifiers based on water-soluble carboxylated
mixtures, additives are applied as powders only,
polymers.
which in addition to the general requirements for
Experts note that the benefits of using any specific modifying agents must also have low
fluidifier cannot be determined unambiguously. hygroscopicity and be distributed uniformly in dry
The effect of using fluidifiers in dry buildings and wet mixes.
mixtures might change, depending on the cement
Class one modifying additives, which are
mineral composition, its specific surface,
regulators of rheological properties, are those
properties of fillers, aggregates, and modifiers,
most widely used in the production of dry building
and on compatibility with the components that
mixtures. Additives of this class are used for
comprise a specific product. It might also depend
modifying dry building mixtures for virtually any
on conditions of hardening, as well as on the cost
application.
of fluidifiers used. The only certain thing is that
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The second class of modifying agents, which are however, with the exception of sand, are
setting and hardening regulators, is used for characterized by variability of their chemical
modifying repair compounds, flooring mixes, composition, especially in terms of their main
mixes for mechanized application, dry building components, and an increased content of
mixtures based on plaster binders, etc. polyvalent metal oxides, primarily ferric oxides
(Fe2O3). This problem can be overcome by
The modifying additives of the third class, which development of qualitatively new methods of raw
are structure regulators, are used for modifying materials enrichment, which would allow bringing
repair, water-proofing, plastering, and other them to the required stable condition in terms of
mixes. chemical composition. This task requires
Fourth class modifiers give special properties to innovations towards a targeted research
mixes and are used for the compositions of dry approach, using basic physical-chemical research
building mixtures that must comply with special and modern production facilities for
functional requirements in terms of their comprehensive development of raw materials that
application or service environment. will comply with ecological requirements, ensuring
their preparation and delivery to users, as well as
Ukraine is rich in deposits of sand, dolomite, preparation of normative documents regulating
chalk, kaolin, and pegmatite—the raw materials quality requirements.
used for glass production. The said raw materials,
3.2. MODELS FOR SUPPLYING RAW MATERIALS USED BY ENTERPRISES IN THE SECTOR
Based on experts’ estimates, proportions between of products; therefore, it makes no sense to
the raw materials used for various types of “averae” the opinions of representatives of
products are different today: different subsectors.
As regard changes in the raw materials situation The classical model of raw materials supply for
over the last three years, experts have split almost construction materials production is a situation in
equally among those who believe that the which the manufacturer places its production
proportion of domestic raw materials increased facility near raw material sources. Therefore, each
somewhat and those who argue that the company (especially a large one) strives to have
proportion of foreign raw materials increased quarries and pits for extracting various minerals,
significantly. Apparently, this is due to the fact that or other raw materials facilities, among its assets.
different raw materials are used for different types
TABLE 3-3. ORIGIN OF RAW MATERIALS FOR PRODUCTION OF CONSTRUCTION MATERIALS
Product Proportion of foreign raw Proportion of domestic raw
materials, % materials, %
Acrylic 80 20
Alkyds 30 70
Asbestos 100 0
Dyes 100 0
Clay 0 100
Oak, pine, alder 0 100
Sand 0 100
Feldspar 30 70
Solvents 10 90
Glass 0 100
Process additives 90 10
Cement 0 100
Slurry coal 0 100
Crushed rock 0 100
This is done not just to save on raw material and because some types of raw materials have to
costs, but also in view of the transportation factor, be imported, rail seems the transport of choice for
an extremely important for producers of such supplies. It ensures transportation of large
construction materials. It is worth mentioning volumes in any form and offers moderate freight
certain particularities about raw materials cost. Ukraine does not as yet have a well-
transportation in the context of construction established just-in-time system. As Ukrainian
materials enterprises. producers experience no problems with
availability of raw materials, the greatest supply
As that enterprises that produce and process the bottlenecks are caused by transportation.
raw materials are quite distant from each other,
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Makers of primary building materials mostly use
rail for receiving raw materials and delivering
100
finished product. Rail transport, in turn, is locations, the cement industry would still use rail.
controlled by the state and does not depend on Today, 11% of Yugcement output is delivered by
any of the parties involved in deliveries. cement truck. this proportion will increase to 25%
Therefore, in case of delays, the producers cannot by the end of the year.
influence the delivery speed.
Spokespersons for the Ukrcement Association
Having suffered from lack of rail cars, cement say this problem concerns all cement producers
plants have decided to switch to trucks. that use the railways. Kryvyi Rih Cement, owned
Dyckerhoff (Ukraine), which owns three cement by Heidelberg Cement, also started building its
plants in Ukraine, has spoken of creating its own own fleet of cement trucks several years ago.
truck fleet.
Motor transport is another widely used means of
A spokesman for Dyckerhoff (Ukraine) says transportation. It delivers smaller-sized loads in
(Ekonomicheskiye Izvestiya of 9 June 2006) the comparison with railway transport, but is more
railway is no longer able to cope with increased flexible. Here too, however, obstaclesinfluence the
cement production volume. The company speed and cost of deliveries, including bad roads,
invested €1 million in creating its own truck fleet, demands for informal payments at border
which is based at the Yugcement Plant in crossings or on the road, and delays on the
Mykolaiv. The idea has caught on with other border (queues, customs fees, etc.). To avoid
enterprises. Company representatives claim that complicated and expensive import procedures,
cement trucks are economical for deliveries of up producers prefer to buy raw materials and inputs
to 200 km. For transportation to more distant from wholesale distributors.
3.3. STRUCTURE AND EFFICIENCY OF ENERGY RESOURCES USE
Making construction materials requires significant materials is improved and appropriate new
amounts of energy. This requires significant production methods are developed; one of the key
financial outlays and influences the cost of goods. ways of reducing fuel consumption in cement
Therefore, the majority of producers are now production is reducing the sludge moisture
striving to improve the production process, content.
modernizing and re-equiping their facilities to
more efficiently use energy resources and reduce Electric power is the main type of energy for the
energy consumption. Different methods of absolute majority of companies in the construction
reduction are used in each industry segment. For materials sector. It is used by 79.3% of
example, in the glass production segment, they companies. A significant number of enterprises
improve raw materials processing methods and are also using natural gas. Other types of energy
material production (oxygen enrichment); in (petroleum products, coal, etc) are only used by
production of roofing materials, the structure of individual enterprises.
According to respondents, energy accounts for for 10% of production costs. For another 26.7% of
about 16.3% of production costs on average (the enterprises, energy costs account for 11% to 20%
proportion varies by segment from 1% to 55%). At of total production costs. For the remaining 24.4%
the same time, it should be noted that for almost a of enterprises, energy costs account for over 20%
half of enterprises (48.9%), these costs account in the total production costs.
Prepared by BIZPRO 88
FIGURE 3-3. SHARE OF ENERGY COSTS IN TOTAL PRODUCTION COSTS, PERCENT OF
ENTERPRISES
11.1
13.3
48.9
The share of energy costs in the total structure of enterprises (31.3% and 23.8%, respectively) have
production costs is significantly lower for small costs at a level of 11% to 20%. Also, large
enterprises, where 62.2% of enterprises keep enterprises have the highest proportion of those
these costs at a level below 10%, whereas a (23.8%) for whom such costs exceed 30.0%.
significant part of medium-sized and large
FIGURE 3-4. SHARE OF ENERGY COSTS IN PRODUCTION COSTS FOR ENTERPRISES OF
DIFFERENT SIZES, PERCENT OF ENTERPRISES
Large
33.3 23.8 19 23.8
enterprises
Up to and including 10%
11-20%
Medium-sized
43.8 31.3 15.6 9.4 21-30%
enterprises
31-55%
Small
62.2 24.3 8.15.4
enterprises
Half the enterprises (50.0%) could not decide Among entrepreneurs who answered this
what magnitude of energy price rise would have a question, a significant proportion are convinced
significant impact on their competitiveness. This that even a moderate increase of energy prices
appears to be due to the fact that the majority of could impact their competitiveness. In particular,
construction materials companies are using nearly half of those who answered this question
electric power as the main energy carrier. (49.2%) would expect their competitiveness to
Electricity is relatively cheap in Ukraine, so a deteriorate even after an energy price increase of
significant number of entrepreneurs are not too 10% or less. Only 23.0% of enterprises said the
sensitive about its impact on production costs limit for staying competitive is above the 20%
and, accordingly, they have never made any energy price-hike mark.
estimates of how higher electricity prices would
influence their businesses.
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FIGURE 3-5. ENTERPRISES’ ASSESSMENT OF WHAT ENERGY PRICE RISE WOULD DAMAGE
THEIR COMPETITIVENESS, PERCENT OF ENTERPRISES
23.0
49.2
Large and medium-sized enterprises have the If energy prices rise, entrepreneurs say their main
highest “safety margin.” Where a threat to methods for reducing production would be
profitability starts with an 20% rise in energy improving the manufacturing process and their
prices for 40% of large enterprises and for 36.4% equipment. Some 41.9% of entrepreneurs
for medium-sized enterprises, there are only 6.9% answered that way. Another 30.5% hope to switch
small enterprises in the same position. More than to cheaper energy carriers, and 22.9% intend to
half small enterprises (55.2%) would suffer even forgo buying new equipment or expanding
given an energy price rise of less than 10%. production.
The majority of enterprises are taking some steps towards a more economical use of energy at
to introduce energy-saving measures, with 36.8% present; however, only 22.2% of enterprises are
of them actively engaged in such efforts and neither implementing nor planning to implement
another 29.9% implementing individual steps. such steps.
Some 33.3% of enterprises are doing nothing
FIGURE 3-6. STEPS TAKEN TOWARDS A MORE ECONOMICAL USE OF ENERGY, PERCENT OF
ENTERPRISES
Prepared by BIZPRO 90
Large enterprises are more proactive in the fact that large companies are greater
introducing energy-saving technology. Some consumers of energy and have a greater share of
88.0% of them are taking either active or certain energy in their production costs. The large
steps in this direction, as compared to 60.0% of companies are, accordingly, interested in reducing
medium-sized enterprises and 61.6% of small these costs to maximize their profits.
enterprises. This appears to be connected with
FIGURE 3-7. STEPS TO IMPLEMENT A MORE ECONOMICAL USE OF ENERGY RESOURCES
AMONG ENTERPRISES OF DIFFERENT SIZES, PERCENT OF ENTERPRISES
The main steps undertaken by companies for – innovation and improvements in the production
energy economy include: process;
– energy-saving modes of equipment operation; – support of state energy-saving program, etc.
– modernization of equipment and units; It should be noted that entrepreneurs primarily
concentrate on improving processes and
– installation of new type of boilers and use of equipment that could reduce their energy-intensity
boilers for waste incineration; (36.9% of enterprises), using cheaper energy-
– using energy-saving technology and improving carriers (26.2% of enterprises), and saving raw
the quality of lighting fixtures; materials and inputs (20.5% of enterprises)
TABLE 3-6. WAYS OF REDUCING PRODUCTION COSTS AS ENERGY PRICES RISE, PERCENT OF
ENTERPRISES
Activities Percent of
enterprises
Improving processes and equipment 36.9
Changing to cheaper energy-carriers 26.2
Saving raw materials and inputs 20.5
Deciding to forgo procurement of new equipment, expansion of 19.7
production, etc.
Savings on payroll 9.8
Raising prices of products 6.6
Let us consider the issue of implementing using them in other industries, implementation of
energy-saving technical, using some examples the state energy-saving policy has two main
from construction materials industry segments directions:
(Guide “Energy-Saving Technologies,
Equipment, and Technical Solutions” / State The first direction involves economy in the
Committee of Ukraine for Energy Economy, SE production of construction materials (introduction
International Center for Energy Efficient of energy-saving processes, materials, and
Technology, Kyiv, 2004). equipment, using waste energy, etc.);
Prepared by BIZPRO 91
The second direction provides for increasing the
production of energy-efficient structural and
heat-insulating, and heat- and sound-insulating,
105
materials. Using these saves energy (in housing refractories. Recommendations have been
and industrial construction, shipbuilding, the developed and published for test-bench selection
airframe industry, the power industry, of refractories for building furnace components,
technology, etc.). including flat-roof burners. These ensure efficient
burning, as well as zone regulation of glass
The Energy Saving Program is based on manufacturing thermal conditions.
developments by leading research institutions,
including industry institutes: the Scientific and Launching glass manufacturing systems
Research Institute of Construction Materials and equipped with recuperators or regenerators
Products (NDIBMV), the State Institute for made of refractories, which preheat air for
Design of Construction Materials Industry burning, reduces fuel consumption by 10%-12%,
Enterprises (Pivdendiprobudm), the Ukrainian and by up to 30% for new furnaces.
State Institute of Glass (UkrDIS), and the
LvivbudmNDiproekt Scientific and Design Thus, use of high-quality refractories and efficient
Institute. furnace linings extend the service life of furnaces
to 5-7 years and reduce fuel consumption by
GLASS INDUSTRY 10%-15%. Consumption of electric power falls by
3%-5%.
Reconstruction and Modernization of
Building Glass Production Lines Implementation of Heat Insulation of Process
Units in Glass Industry
Today, the float process is used to produce 90%
of the world’s building plate glass. According to The UkrDIS Institute has developed guidelines
this process, molten glass, at a temperature of regulating implementation of heat insulation for
about 10000 C, is poured on a molten lead concrete process units at existing and new
surface, where it spreads and floats due to facilities. The guidelines contain information on
difference in density, which makes it possible to the traditional and the new high-efficiency heat-
produce a zero-defect surface. insulating materials, on optimal approaches to
heat-insulation, on thermal calculations of
Reconstruction and modernization of float insulation, and on economic indicators. Heat
process plate glass lines at CJSC Lysychansk insulation measures allow for a 10%-15%
Proletariy Glass Plant has to a reduction in reduction in glass production fuel consumption.
process loss and an increase in production of
quality glass by 6%. The specific fuel rate has Use of Secondary Cullet for Manufacturing
fallen by 4.1%. Glass Products
The plant has launched an industrial- Increased use of secondary cullet reduced
technological complex for manufacturing safety energy-intensity accordingly: 5% is equivalent to
glazing, i.e., building-grade hardened glass 30 kg - 60 kg of equivalent fuel, per ton of
(heat treatment is used here to improve impact finished product.
strength and resistance to temperature
variations, which is relevant for the production of A decision has been made to build a facility for
energy-efficient glass units and structural making foam glass of secondary cullet in
glazing). Ukraine. Research has been conducted; the plan
is to build a line in one of the shops of the
Thanks to modernization and implementation of Slovyansk Integrated Ceramics Plant. Foam
effective technology solutions (automatically glass is an efficient material for heat-insulation. It
controlled burners, new recuperators for heating combines properties of heat-, fire-, and hydro-
air supplied for furnace firing, sealing of furnace insulation, as it has a specific density of 140 to
loading areas, heat-insulation of furnace 220 kg/m3 and is nonhygroscopic. Use of foam
components) in the vertical glass pulling glass in building projects reduces heat losses by
manufacturing system at Shop No.3 at Budsklo 2.5 to 3 times, and a block 120 mm thick has the
Ltd., in Kostyantynivka, the company has same heat-insulating properties as brickwork that
renewed production of sheet glass, 2 mm thick. is about 950 mm thick. Heat-insulation for roof
Fuel consumption has fallen by 3% and electric coverings seems to be the most efficient use for
power consumption by 1.2%. foam glass.
Introduction of Energy-Efficient Glass Developing Glass-Making Technology for
Furnaces Using Ukrainian Refractories Energy-Efficient Glazing
The Ukrbudmaterialy Corporation participated in Given Ukraine’s climate, heat-insulation in winter
putting into production the Vilnohirsk Zircon is the most important function of transparent
Refractories Plant. The industry institutes UkrDIS construction. Heat is lost through windows by
and Pivdendiprobudm developed designs for means thermal conductivity, convection, and heat
modern glass furnaces based on Ukrainian radiation. To minimize heat losses due to thermal
Prepared by BIZPRO 92
conductivity and convection, multiple glazing is
used. The recently invented multiple-glazed unit
107
has become an integral component for modern Plans are to launch and implement modern
windows. Glass units have high heat- and sound- transfer lines for making a wide range of ceramic
insulating properties thanks to the two or three tiles, using imported equipment, at the CJSC
glass sheets tightly sealed along the perimeter, Kharkiv Tile Plant and OJSC Lviv Ceramic Plant.
with layers of dry air or inert gas inside. Further Specific consumption of fuel for interior tiles is to
improvement of the heat-resistant properties of be reduced to 4.7 kg/m2, and for floor tiles to 8.0
windows by increasing the number of glass kg/m2.
sheets is not economically justified. To this end,
energy-saving types of glass are being Phased reconstruction of shops at the CJSC
developed and applied, including k-glass with Slavuta Budfarfor Integrated Works is underway.
special “hard” coating and I-glass with special They are to be equipped with imported and
“soft” coating. Ukrainian machinery.
To give float glass the heat-saving properties of Thanks to implementation of efficient fibrous
k-glass, a thin layer of metal oxides is applied on refractories and thermal insulation of tunnel
the glass surface when it is still on the production furnaces, and to reduced material-intensity of
line (by means of pyrolysis spraying); for i-glass linings for furnace cars, specific fuel
properties, a multilayer coating of successive consumption for production of sanitary ware has
layers of silver, other metals, and dielectrics is been reduced to 480.0 kg/ton.
applied to finished cold glass by means of Introduction of Modern Driers for Nonmetal
vacuum deposition. Industry
Plans are to implement technological innovations Work continues to modernize production of
devised by the Ukrainian State Institute of Glass enriched kaolin by launching energy-efficient
(UkrDIS) and the Scientific and Production Rubin driers at CJSC Hlukhovetsky Mining and
Association and launch production of polished Enrichment Integrated Works and CJSC
plate glass with multifunctional properties using Dniprokaolin. The new driers are based on a
the pyrolysis method. new way of drying raw kaolin in direct contact
To reduce consumption of energy for air- with natural gas combustion products. This
conditioning, special sun glass is used (mass would reduce fuel consumption in kaolin
dyed glass, as well as certain types of coated production by 10%-15%.
glass). NONMETAL INDUSTRY
Other promising energy-saving areas of Institute Introduction of Modern Equipment, and the
research include methods for producing glass Expanding Range of Stone-Working Industry
with selective absorption across the whole light Products
spectrum.
A process line based on Italian stone-breakers
The developments include copper-haloid for production of paving blocks and road pitchers
photochromic glass, a technology for producing has been put to work at OJSC Yantsevsky
the heat-absorbing float glass, and a method of Granite Quarry.
applying coatings based on sol-gel method.
Research is underway to develop technologies OJSC Novoselytsky Quarry has renewed making
for physical coating application, in particular marble blocks by installing modern rope sawing
multilayer systems of electrochromic coating. equipment, which allows for higher yields of
blocks from the solid mass due to reduced
The Institute has developed the technology for losses, and because less energy is used for their
applying a film-forming solution to large-size subsequent dressing.
glass. This sun-protective coating does not
require rare materials, and the resulting film has Plans are to rebuild the stone-breaking sections
an optical transmission of 75%, and good at CJSC Holovynsky Granit Quarry and OJSC
mechanical and climatic properties. Malobuzukivsky Quarry.
Given the acute shortage of fuel and energy Thanks to the above measures, specific electric
resources in Ukraine, UkrDIS designs that will power consumption is expected to fall by 5%-
reduce heat losses by 15%-20% has special 10%.
relevance.
CERAMIC INDUSTRY WALLING AND BINDING MATERIALS
INDUSTRY
Phased Modernization of Existing Production
Lines, and Introduction of Modern Equipment Resource-Saving Technology and Equipment
for Production of Building Ceramics for Making Efficient Walling
Ceramic walling (bricks and blocks), thanks to its
high architectural, technological, and comfort
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properties, holds a significant share of total
walling construction materials volume, despite
109
the fact that making it requires relatively high Using Waste from the Coal and Power
energy inputs. Industry for Production of Wall Materials
To reduce energy consumption in ceramic tile The industry has significant production capacity
production, the following step are planned: for processing man-made waste. Given
appropriate economic incentives and an
- to implement transition from traditional plastic- increase in the range of construction materials
making to making products from lower-humidity produced, their use could be increased to
mixes and to semi-rigid making, which would 14.5%-20% of the total amount of raw materials
increase productivity of process lines, ensure in the next three to five years.
more voidage, improve product appearance,
expand the range of ceramic products, and The research and development efforts of the
reduce the fuel and energy required for mass institutes NDIBMV, Pivdendiprombudm,
preparation of mix and drying and firing of LvivbudmNDiprojekt, and others, as well as the
ceramics; production experience of industry enterprises, all
indicate that using coal-containing waste as the
- to continue providing enterprises with tooling main raw material, as well as as a fuel and
for the plastic and semirigid presses needed for mineral additive to clay in the production of
production of conditional economy (density ceramic bricks, reduces fuel consumption for
1400-1600 kg/m3) and economy (up to 1450 1,000 equivalent bricks by 20% to 70%. For
kg/m3) ceramic bricks and stones with voidage example, the CJSC Kolomyya Construction
of 22%-32%; 25%-45%, and walling units with Materials Plant Authority is firing bricks using
voidage of up to 55%. natural gas, at a rate of 100-110 kg of equivalent
Technical re-equipment and intensive fuel and waste coal, which contains 70-90 kg of
implementation of ceramic brick producton using equivalent fuel for 1000 equivalent bricks. The
plastic-making is carried out at an accelerated industry-wide level of commercial fuel use for
pace at walling subsector enterprises. In the production of ceramic bricks amounts to 175
particular, OSCJ Budmaterialy, based in Bila kg for 1000 equivalent bricks, which points to the
Tserkva, reduced its specific fuel consumption advisability of additional processing of man-
by 2.6% in 2003, thanks to kiln reconstruction made raw materials.
and optimization of brick-firing conditions. Estimates show that the majority of walling
OJSC Bolekhiv Construction Materials Plant enterprises are capable of processing waste
Authority, JV Brick Plant Ltd., based in without significant capital investment or
Zymohirya, and OJSC Kirovohrad Brick Plant installation of additional equipment for preparing
have started making bricks with voidage of 22%- waste coal. The technology developed by
37%, and ceramic blocks with voidage of up to industry research institutes, based on optimal
40%, which corresponds to the following compositions of mixes, does not require
proportion of reduction of fuel and energy additional specialized equipment for filtering
resources and raw materials: an increase of emissions either.
voidage by 1% reduces costs by 0.7%. According to the estimates made by the
NDIBMV has developed new, nontraditional Ukrbudmaterialy Corporation, 19 brick
process equipment for making ceramic bricks by enterprises were already capable of processing
semidry pressing. 250,000 to 350,000 tons in 2004-2005, which
corresponds to an increase in the use of waste
The equipment lowers energy use by 25%, and by 5-7 times for the industry in general. Taking
unit capital costs and production costs by up to into account the renewal of brick production and
20%. The quality of raw materials preparation a further increase in output in 2007-2010, it
and good product pressing conditions are also would be possible to use 800,000 to 1,200,000
provided for. tons of coal and power industry waste per year.
Technology for Firing Low-Grade Solid Fuel Development and Implementation of New
Energy-Saving Thermal Units and Burners
A number of technical solutions and an
integrated unit base for maneuvering the New energy-saving thermal units and burners
dominant types of fuel in Ukraine are expected to have been developed:
be implemented in the walling industry.
- a chamber dryer for transverse reversible
According to Pivdendiprobudm estimates, blowing of ceramic products with movable
stabilization of production, with improved furnace turbolator (reduction of heat losses for
productivity, would reduce consumption of fuel evaporation of 1 kg of moisture to 900-1100
types in short supply at brick plants by 20%. ccal/kg against 1500-1800 ccal/kg for existing
dryers);
Prepared by BIZPRO 94
- a tunnel furnace for firing ceramics, providing construction materials and porous concrete
energy use reduction by 10%-20% compared to products.
the furnaces currently in operation. This is
achieved thanks to automation of the firing The energy-intensity of porous concrete,
process, use of high-efficiency thermal including fuel costs, is 2-2.5 times lower than the
insulation, good design, improved sealing, and energy-intensity of ceramsite concrete and 1.5
efficient use of secondary heat; times lower than fuel and energy consumption in
making ceramic bricks.
- energy-saving gas burners, a standard range
of which rated from 8 to 16 m3/sec has been The heat-resistance of porous concrete with a
developed by NDIBMV and the Gas Institute of density of 400 to 600 kg/m3 is 1.5-2.5 higher
the Ukrainian National Academy of Sciences. than that of traditional wall materials, which
Low and medium pressure burners are intended reduces consumption of energy resources for
for the firing systems in tunnel and circular maintenance of buildings by more than 20%.
furnaces in wall ceramics-making, and in shaft Structural and heat-insulating products with a
and rotating furnaces for firing limestone. The density of 400-600 kg/m2 and “thermoblocks”
developed gas burners have passed state tests with a density of 250-400 kg/m3, according to
and have been recommended for gas fired units. researchers, will take leading places in the
The experience of using these gas burners at a range of construction materials on the Ukrainian
number of enterprises confirms the possibility of market. This is consistent with the state
reducing consumption of natural gas for firing of industrial policy of energy-savings and
products by 15%. The new system of firing overcoming the resource-intensive nature of
should be implemented taking into account the production.
properties of specific raw materials, furnace The design capacity of the OJSC Obukhiv
construction, and its thermotechnical and Porous Products Plant has been boosted by
aerodynamic parameters. more than a third. The company is completing
The Pivdendiprobudm Institute has designed a second-phase construction of a facility with an
new tunnel furnace for “self-firing” of ceramic additional capacity of 80,000 m3 of porous
bricks from raw materials made up of 100% of concrete products per year.
waste coa. This contains 14% of carbon, whose Production is being renewed and output of
burning in the furnace provides for brick self- porous concrete blocks increased at OJSC
firing without use of primary fuel. Using the extra Bilhorod-Dnistrovsky DEZNB, OJSC
heat in the firing zone at a rate of 1.13 · 106 Sylikatobeton in Sumy, and OJSC Zhytomyr
ccal/hr is also foreseen. Integrated Plant of Silicate Products.
Development of Production of Porous THE POLYMER, HEAT-, SOUND-, AND
Products and Their Use in Mass-Scale HYDRO-INSULATING INDUSTRY AND THE
Building ROOFING MAProduction Technology and
Porous concrete is a promising wall-building Use of Modern Construction Materials for
material made of sand, cement, lime, and Energy-Efficient Buildings and Structures
aluminum powder (afoaming agent) using the The OJSC Zhytomyr Integrated Plant of Silicate
autoclave hardening method. This material has Products has launched production of extrusion
high heat-resistance and heat-storage foam polystyrene on a line with a capacity of 17.5
properties, is capable of significantly reducing m3 per year. This is a new class of heat-
energy-consumption during its production and in insulating materials, which thanks to their water-
buildings and structures, and provides for more resistance, high mechanical strength, and
comfortable housing. Porous concrete is an structural stability against impact of external
environmentally-clean material, emitting no toxic factors serve as reliable protection against
substances. the comfort coefficient is 2, which is extreme atmospheric conditions. According to
second only to wood, which has a coefficient of preliminary estimates, application of foam
1 (to compare, ceramic bricks’ comfort polystyrene boards 50 mm thick for heat
coefficient is 10). insulation of structural elements of buildings and
In 1996, new standards were institututed for structures would reduce heat losses 2.7 times.
heat resistance of external filler structures. The OJSC Chernivtsi Heat-Insulating Materials
These exceed heat- resistance of buildings Plant has started making structural basalt heat-
made of traditional walling by nearly 2.5 times. insulating materials for buildings. The company is
For further development of construction and to expanding and modernizing its production. Basalt
ensure compliance with heat resistance Technologies Ltd. in Irpin, Kyiv oblast, and CJSC
standards, the only option is to make a transition Bilychi Teplozvukoizolyatsiya Plant are renewing
to multilayer structures, using light heat-efficient production.
Prepared by BIZPRO 95
The NDIBMV Institute has developed a process Production of dry building mixtures with special
for expanded production of perlite, as well as of concrete additives and modifiers seems
products made on its basis, using raw materials promising. Such concrete will be used for
from the Berehove deposit. A mobile perlite plant making thin-wall structures. It weighs 2-3 times
has been designed, and the first pilot unit less than high-strengths, helps reduce a
installed at the Lipetsk Steel Plant in Russia. The building’s energy-intensity.
integrated equipment allows for producing perlite
sand directly on the production or building site. SANITARY WARE INDUSTRY
The perlite is to be used for concrete products, Introduction of Efficient Heaters and Metal
dry building mixtures, and as fill heat-insulation. Hardware for Windows and Doors
The density of expanded perlite sand is 80-120
kg/m3, so products made of expanded perlite CJSC Luhansk Foundry and Mechanical Plant
(boards, blocks, plaster) serve as high-efficiency, has launched production of enhanced heat-
heat- and sound-insulating materials. Heat irradiation heaters of lower metal-intensity and
conductance of products with densities of 80-250 modern design, in models MS-140 and RO-80.
kg/m3 amounts to 0.04-0.09 W/mcm.
OJSC Simferopol Santekhprom has started
The OJSC Slavuta Ruberoid Plant is using making fittings for windows and balcony doors
progressive technology to increase production of with single-, double-, and triple-glazing, as well
high-quality, European grade soft roofing at a as more than 50 models of locks and hardware
line rated for 12 million m2 per year. Work has with electroplating or polymer coating based on
started on installing the second production line. energy-saving technology.
The company was the first in Ukraine to launch
production of Teplozvukoizol heat-insulating, INDUSTRYWIDE ACTIVITIES
acoustical material; technology for making
Use of Waste Energy
bitumen roof tiles and other efficient water-
proofing materials has been implemented. The Activities are underway to install glass furnaces
production is based on modern technology, equipped with heat-utilizing units. The
which provides for exclusion of an energy- effectiveness of this approach has been
intensive process of bitumen oxidization and confirmed by the operational experience of the
reduction of fuel consumption to 60 kg of CJSC Lysychansk Proletariy Glass Plant (where
equivalent fuel and electric power to 34 kWh of the annual volume of using waste energy has
electric power per 1000 m2 of soft roofing. reached 16,700 Gcal, the equivalent of saving
2,700 tons of equivalent fuel).
OJSC Obukhiv Porous Products Plant has
started production of modified special-purpose There are systems for utilizing heat of gases
building mixtures for seamless (glued) wall discharged from walling industry furnaces. For
laying, which exclude cold layers. The efficiency instance, the OJSC Kherson Integrated Plant of
of such mixtures has been proven by building Walling and Binding Materials is annually
practices. This tendency in the construction producing up to 10% of process heat in its heat-
materials industry is developing rapidly, not only utilization units.
in terms of increased use of the mixtures, but
also thanks to creation of a domestic raw Introduction of Fuel and Energy Control and
materials industry. Metering Devices, Conducting Energy Audits
and Energy Management, and Developing
Manufacturers of dry building mixtures are Technologically Justified Consumption
satisfied with the products of OJSC Standards
Pryborzhavske Construction Materials Plant
Authority (marble powder), OJSC Gipsovyk, The above steps are expected to help reduce
based in Kamyanets-Podilsky (separated fuel consumption in making construction
plaster), OJSC Novoselivsky Mining and materials by 3%-5%. The experience of the
Concentration Integrated Plant (ground quartz industry’s best companies testifies that savings
sand), and OJSC Obukhiv Porous Products can be achieved without significant capital
Plant (hydrated lime). outlays.
Prepared by BIZPRO 96
4. SALES
Manufacturers are striving to occupy their niches However, if a manufacturer is uninterested in
or win the maximum market share. In addition to controlling the distribution process, he can also
manufacturing, they need to develop product work with regional distributors, who resell goods
sales channels. to other wholesale chains.
The primary sales channels for construction In addition to the above sales channels, markets
materials manufacturers are building and bazaars are still active in this sector. They sell
organizations, wholesale distributors, specialized goods to retail customers. Each sales channel has
stores and construction materials supermarkets. its strengths and weaknesses, and each company
Large companies are also creating their own sales selects a system that suits it best.
networks and sell products through own
representative offices. Based on survey data, direct sales to end users
from the warehouse and sales on an individual
Some distributors of construction materials work order basis were the most popular sales channels
directly via manufacturer warehouses and sell in 2005, with 68.0% of enterprises selling their
construction materials in large batches to building produce in these ways. Second place belongs to
contractors. This is positive, because it offers the distribution via wholesale agents, with 49.2%4 of
chance to maintain control over sales channels, enterprises selling their products in this manner.
develop specialized knowledge about producst, Retail intermediaries and direct sales through
and work in close cooperation by setting up enterprises’ own retail chains were used by about
training seminars and bonus systems. Such a third of companies (32.0% each).
practices are effectively reduce the number of
intermediaries and trade surcharges.
FIGURE 4-1. PRODUCT SALES CHANNELS, PERCENT OF ENTERPRISES*
68.0
Also, there are some differences, depending on networks; but among medium-sized companies
company size. If direct sales through warehouses only 23.8% do, and among small enterprises
and on an individual order basis are used in 30.2% do. The same correlation is also true for
almost equal proportions by enterprises of all sales via wholesale traders, with small enterprises
sizes, the share of enterprises using selling being the least likely to resort to their services
through its own retail chains is smaller for small (41.5%), while 50.0% of medium-sized enterprises
enterprises. For example, 48.1% of large do and 63.0% of large enterprises.
enterprises sell their produce through own retail
Prepared by BIZPRO 97
FIGURE 4-2. PRODUCT SALES CHANNELS USED BY ENTERPRISES OF DIFFERENT SIZES,
PERCENT OF ENTERPRISES*
Medium-sized
50.0 35.7 23.8 69.0
enterprises
As seen from the figure, the larger a company is, the advantage of the maximum possible number of
greater the number of sales channels it uses. This channels.
can be explained by differences in production volume. As regards shares of various sales channels used in
For small enterprises with smaller production the sector in general, direct sales to end users from
volumes, a limited number of sales channels might be warehouses and sales on an individual order basis
sufficient. Large enterprises, however, to ensure sales account for the largest share of finished product sales
of their large production volume, have to take (50.0%). Then come sales through wholesale traders
(25%).
FIGURE 4-3. PROPORTIONS OF VARIOUS CHANNELS IN SALES OF CONSTRUCTION
MATERIALS PRODUCTS, PERCENT OF PRODUCTS
1.5 Agents - wholesale traders
24.2
Manufacturers of dry building mixtures use depending on the manufacturer (The Kontrakty
traditional sales arrangements. The majority of Ukrainian business weekly (No.22 of 30 May
enterprises engage large distributors with 2005).
wholesale warehouses as partners.
In recent years, however, the geographic structure
The majority of manufacturers have about five of sales is changing, with large manufacturers
products that generate continued sales, even based in Kyiv starting to expand to the provinces.
though total ranges are much wider. The At the same time, regional leaders are moving in
percentage of sales to building companies, the opposite direction, occupying the capital city
bypassing intermediaries, varies from 0 to 30,
Prepared by BIZPRO 98
market. Small firms, as before, operate within their Kontrakty Ukrainian business weekly (No.22 of 30
local regional markets. May 2005):
The sales structure on the dry building mixtures
market can be represented as follows (The
FIGURE 4-4. DRY BUILDING MIXTURES SALES CHANNELS
HOW THEY SELL DRY MIXTURES
Building
companies
Renovation Private
teams up to individuals
20 persons
Both construction materials manufacturers and extensive dealer networks by promoting materials
traders have strengthened their positions in the that can be “easily” sold at non-specialized
last three or four years. Relations between market building stores, including dry mixes, plasterboard,
players are becoming more civilized with every varnishes and paints, miscellaneous building
passing year. However, there remain numerous chemicals, etc. Specialization is unimportant in
problems in how sales are organized. The number this segment. The main benefits of working with
and complexity of these problems depend on dealers are as follows: they know their local
several factors. First, they depend on the markets; they have established sales systems;
country’s general economic development. there is savings when it comes to maintaining of
Second, on a company’s financial capacity and offices, warehouses, etc., in the regions.
business management techniques. Third, they
depend on the level of development of companies According to a majority of companies, the
(distributors and dealers) and on competition in disadvantages of working with dealers are as
specific submarkets within the building industry. follows (O. Rudenko, “Budibuilding 2003” //
Biznes, 18 August 2003 (No.33), pp. 126-129):
The latter two factors are decisive when a first, there is always a possibility that another
company is selecting distribution channels. The supplier might entice a dealer (however, given an
survey indicates the difficulties they have to face extensive sales system, it is unlikely that all its
and their criteria for arranging how their goods are participants would reject the business of one
sold. Not infrequently, companies use radically supplier for another simultaneously); secondly, it
different arrangements for promoting their is impossible to directly influence dealer activities
products. Also, depending on a multitude of or control prices (which tends to lead to dumping);
factors, some companies are using several there is no customer feedback; there is insufficient
distribution channels simultaneously, i.e., pursuing information about regional market developments.
a mixed sales system. Things could be smoothed over by developing an
effective pricing policy. Also, operators believe it
Dealers and Distributors would be useful to hold informational meetings
The role of powerful trading companies is growing with dealers. Besides, the most prudent suppliers
as the building industry is evolving. Naturally, the are trying to support the sales process, research
majority of manufacturers are interested in markets, etc., using trade representatives and
working with strong distribution companies. The merchandisers. These, as a rule, occupy staff
lack of such companies, however, often drives positions within the company. Approaches can
producers to get involved in direct distribution. vary widely. Some companies set up non-trade
offices; others do without special offices.
Large producers could potentially have 20 to 50
dealers. As a rule, companies are developing
Prepared by BIZPRO 99
Proprietary Sales Units 2. Chain stores specializing in sales of individual
groups of goods and department stores.
As a rule, these are branches or affiliated
enterprises. 3. Small stores with a trade area of up to 500 m2.
A manufacturer or a large importer might want to 4. Trade outlets at open-air building markets –
establish its own sales entity under the following stalls, containers, small specialized stores or
circumstances: pavilions.
1. There are no mature trade companies on the 5. Large building stores with a comprehensive
market. 2. Special after-sales servicing is product range (departments: sanitary ware,
required. This might include various finishing construction materials, flooring, tiles, garden
materials, or articles for whose installation special plants, garden and house tools and accessories,
calculations and contract supervision is needed. universal house goods, doors, wallpaper, and light
fixtures), operating based on the DIY format.
The key benefits of sales through branches are
control of network pricing policy, reliable market In experts’ opinion, the Kyiv market is the most
information and hence the possibility of more mature. The above formats are sufficiently
accurate sales planning, availability of a developed in it. The regions are seeing an
company’s own skilled staff, and warehouse and evolution of trade practices and a constant
office facilities. reshuffling of formats, even though sustainable
market arrangements are on the rise. The market
Here, however, is the main drawback of this is developing, some facilities are seeing
system, namely the need to outlay money to transformations, and customer requirements are
establish a branch and to keep spending money changing. For example, there open-air markets
to maintain it. Primary investment might run from are declining. Civilized trade formats are
several thousand dollars to $15,000, depending developing and improving (e.g., DIY-format trade
on the branch activity (store, office with outlets are emerging with floor areas over 4,000
warehouse, etc.) and method of its establishment. m2). With the advent of foreign operators, there
There might be problems with recruiting will be a more definitive market structuring (e.g.
appropriate staff. Besides, managing the network METRO on the food market).
and doing warehouse inventory and logistics lead
to problems. There are two segments on the civilized trade firm
market: professional (whose target audience is
Franchising medium-sized and small building organizations
Many construction materials traders consider this [B2B]), and mass market (whose target audience
approach promising. The advantages include is end users, investors who are independently
expanding a company’s network under the same producing materials and contracting
trademark, without substantial expenditures. professionals).
However, according to the operator data, a The professional segment is represented in
franchising network is less profitable than a Ukraine by two formats. The most common is
company’s own branches. Besides, there are showroon+warehouse (21 Stolittya, Budivelni
difficulties in maintaining performance standards Rishennya) and store warehouse. The
among franchising network participants. showroom+warehouse type consists of a store
The Ukrainian building market is developing (showroom) and warehousing premises or a
rapidly: by 5%-30% per year for trade in distribution center (Tvoya Kimnata). The
construction materials; and by 20%-40% in weakness of this model is the significant increase
supplies for building organizations in amount of time required for purchase. As is
(http://news.elcomart.com/print/Stroitelnotorgovyj_ quite often the case, goods are represented in
format). Overall market growth is due to the showrooms as display only (often, the stock of the
gradual transition of builders to European required product in the warehouse is insufficient).
standards. At the same time, large building Advantages of this format include convenient
concerns can work with a manufacturer or presentation of goods by categories, and
distributor directly, which puts large cash flows availability of the whole range in large volumes in
outside the trade sector. a warehouse shop, which allows for minimizing
time needed for the purchase.
Experts identify the following trade formats on
the market in general: There are also regional markets that are quite
diverse and that can be segmented by the degree
1. Store depot (both single outlets and chain of their maturity. For example, there is only one
facilities) – a commercial facility with floor area of warehouse store in Poltava, with a floor area of
800 m2 to 6000 m2, which works with B2B clients, 3,000 m2. It targets professional builders.
about 60%-80% of sales and B2C (business to
customer) customers – about 20%-40%).
118
- optimize logistics; quote several areas in which an open-air market
cannot compete with civilized trade formats:
- reduce distribution costs;
- conditions of product preservation are not
- work more flexibly with inventory; complied with;
- conduct advertising and promotion campaigns - prices are constantly growing due to small
more efficiently. procurement batches, compared with the contrary
The segment of small stores with a trading floor trend for supermarkets;
areas of up to 500 m2 is very densely populated - safety;
on the market. Given the great demand for
construction materials and a non-saturated - there are no guarantees of quality, with
market, they could coexist in harmony with larger counterfeit goods being quite common (some
formats. markets attract low-income social categories).
It seems reasonable to subdivide trade outlets into Except for warehouse chains, the building
department stores and specialized stores. Their supermarket format is the most capital-intensive
advantage is proximity to the customer (in the first one. Today, this format is employed by
case) and the wide range of goods presented supermarkets like Nova Liniya, Oldi, Domostroi,
within one category (in the second case). and Epitsentr in Kyiv. There are no specialized
Department stores try to accommodate a greater building supermarkets in many of the regions.
range of popular products in convenient This format is relatively new for the construction
packaging. These operators only rarely work with materials market. Experts say that the operational
manufacturers directly. They resort to the services conditions and cost structure of DIY outlets in
of large warehouse stores and wholesale centers. western Ukraine are such that they cannot offer
These stores are similar to food discounters. the lowest prices. Their main competitive
advantage consists in the wide range of goods
The capital has seen the emergence of large theyoffer, and the main earnings are from smaller
construction materials hypermarkets, which articles: house and garden items, house wares,
accumulate the widest possible range of goods interior decoration items.
under one roof. Increasingly, retailers are
expressing concern about the share held by small Competition on the market is becoming more
building stores. They believe that, unless they intense. The entry barrier is rising, and only
specialize, they could be forced out of the market. foreign investors prepared to invest about $50
They quote the example of Hungary, where million in network development may compete on
following the arrival of large construction materials an equal footing. Today, it is important to decide
trade players, such as Obi, Kastorama, Bauhaus on permanent partners and make long-term
AG, and others, local chains had to move from contracts. These are signs of the development of
selling a general range of products to specializing. civilized trade and qualitative growth. The
foodstuffs retail sector is developing more
In addition to areas within general open-air intensively, as food is bought on a daily basis. The
markets, there are four specialized building market will stabilize into a format where 10,000-
markets: 15,000 product mix items are sold. As trade
1. Lisovyi (Yunist). There are about 1,500 people outlets develop, requirements for exclusive
employed on the market today; one stall takes up designs will increase accordingly. Therefore,
about 2 m2 in area. The Epitsentr hypermarket is demand will grow for exterior and interior
located nearby. structural components. At the same time, basic
structural components will be procured in large
2. Shpalernyi (wallpaper) market on the Circular batches (and for several sites).
Road (speed tram route terminal);
Lack of available sites for placing commercial
3. Petrivka (small, civilized market). facilities is becoming a problem. There are many
new good that are new to customers; even
4. Heroyiv Dnipra. experts might have trouble getting to know them
all. Therefore, some 20 to 30 persons have to be
According to available information, there are plans
present on the trading floor at the same time,
to build a trade center with a total area of about
which would be unusual for Western companies.
18,000 m2 on the site of today’s Yunist market.
In addition to needing advice, very frequently
Only the first floor will be designated for selling
customers are physically unable to carry
goods typical of today’s construction materials
everything they buy out with them. If a trader
market, tools, household and electrical goods,
works with a building company, the issues of
home appliances and sanitary ware. The
additional service, discounts, etc., come up. The
Shpalernyi market is constantly shrinking due to
majority of companies have to develop their own
problems with product range and prices. Experts
logistics departments, expand support facilities for
Some market experts note that the present retail Local players in the construction materials retail
trade structure varies significantly depending on sector have found the correct retail enterprise
the region of Ukraine. In Kyiv, markets, format. It includes consolidation and increasing
specialized chains, and building supermarkets all retail facility size. New facilities are being opened,
have approximately equal shares. Also, the share the market is changing, and competition is
of the civilized retail segment is increasing every becoming more intense; the general direction of
year. In Dnipropetrovs’k, specialized chains hold segment development, however, is not likely to
the main market share. There are no classical change. The behavior of Western companies is
building supermarkets as yet. However, judging notable here. They are looking at the market, but
by the information available, Western construction are still reluctant to enter. Local companies are
materials retailers are on their way soon, and their prepared for changes on the market. Many of
certain to take their place. In Odesa and Kharkiv, them have elaborated development plans, which
the lion’s share of the market is held by the include expanding to the regions. For Nova Liniya,
famous “bazaars”: Malyna and the Seventh Dnipropetrovs’k, Donetsk, and Kharkiv seem the
Kilometer in Odesa, and Barabashovka in most promising.
Kharkiv.
Experts believe that 50%-60% of retail trade in
The Kyiv region seems to be growing out of the Kyiv is conducted through building supermarkets.
cheap goods segment, and there is in progress a The remaining retail is still handled by open-air
transition to higher quality and, accordingly, more markets and small and medium-sized shops. The
expensive categories. For example, at the same situation is similar in other large cities. In smaller
time as demand for high-quality finishing materials cities, small specialized stores are still popular.
is growing, the popularity of imported and more With the advent of larger operators, life will
expensive accompanying materials is growing. become increasingly more difficult for small
Given the growth rate of sales of accompanying retailers, and they will continue to be forced out of
materials, both building supermarkets and the market. In large oblast centers with
specialized shops targeting master builders are populations of over one million, shops of this size
developing rapidly. This is primarily a function of are likely to capture more than 70% of
the fact that building and renovation normally construction materials sales.
require many different materials, and it is much
more convenient to buy them at one location. Significant growth on the building market and an
Supermarkets attract customers with their wide increase in retail trade make this market
choice and moderate prices; however, they do not especially attractive for both Ukrainian and
always offer additional services and discount western investors. We are today seeing market
programs. These outlets are more convenient for redistribution by sales structure, with the gradual
people who are doing renovations themselves, or disappearance of small operators, and a
for professional builders with smaller volumes. noticeable segmentation of trade between DIY
and professional outlets. There is also rapid
growth in the size of market operators.
- fashioned and linear glass edge trimming; Located on the plant site is a laboratory
accredited according to the UkrSEPRO system. It
- hardening of customer glass. has the necessary equipment to conduct tests and
trials. The plant has all the required certificates,
The enterprise is certified for compliance with the confirming compliance of its products to the
quality management system to international
requirements of DSTU BV 2.7-110-2002 (GOST
standard ISO 9001:2000. 30698-2000).
Budsklo Ltd. The plant makes over 4,000 varieties of safety
The plant was founded in 1897 as glass for all means of transport. Special emphasis
Kostyantynivsky Glass Plant, to produce glazing is on using safety shaped glass in construction
glass and other glass products. and architecture. Rapid development of the
construction materials market has pushed up the
The enterprise manufactured 18 million m2 of demand for building-grade laminated glass and
glazing glass by the vertical pulling method in increased-strength glass, which is made of
1990. It shut down operations in 2001. imported and Ukrainian raw materials. The
enterprise makes laminated glass for multiple-
Budsklo Ltd. was created thanks to attracting a glazed units and stalinite glass, both transparent
foreign investor (a German Marvol firm) and a and tinted.
change of its form of ownership in 2002. In a short
period of time, the company has built a glass- Special attention is devoted to supplying the
making furnace, and modernized equipment for Cherkasy and neighboring regions with a full
glass band pulling, equipment for glass range of plate glass.
processing and packaging, etc.
PRODUCERS OF DRY BUILDING MIXTURES
The plant is now making 600-630 m2 of glazing
glass per month. The glass enjoys good market
demand.
127
House-Building Factory enterprises, in the course capacity 100,000 tons. In 2003, the company
of privatization. It registered the Budmaister brand launched a second line closer to raw materials
the same year. sources (in Kamyanets-Podilsky). The plant’s
present capacity is 500,000 tons per year (the
Based on RAFIZ company design and equipment, plant has five lines, including four plaster lines and
a new plant for making building mixes with a one cement line). The production capacity of
production capacity of 50,000 tons per year was ready-mixed dispersion polymers in Kyiv in 20,000
built in 2001. The same year, the company tons annually.
implemented a quality management system and
obtained an international certificate for quality The key types of products manufactured by the
management system to international standard ISO company:
9001 (1994 edition).
- cement-based fillers and primers;
The present capacity of the dry building mixtures
plant is 50,000 tons per year. - plaster-based fillers;
129
capacity is 150,000 tons of finished products per the Kyiv region. Its production capacity is 50,000
year; however, the design allows for further tons of dry building mixtures per year.
expansion of production capacity. The total
production capacity of Henkel Bautechnik Main types of products:
(Ukraine), according to estimates, will reach - plaster and cement dry building mixtures;
270,000 tons per year after the second plant
achieves its full capacity. - liquid components.
The Henkel Bautechnik (Ukraine) Company Product range:
presents products under the Ceresit, Thomsit,
Moment, and Metylan trademarks on the - cement mixes;
Ukrainian market.
- plaster mixes;
Initial investment production amounted to 12
- fillers;
million German marks. Some 40% of that was
spent on construction, and the balance was used - floor mixtures;
for procurement and installation of equipment
imported from Germany and Italy. Additional - plastering mixes for heat-insulation and sound-
investments of over €2 million were made during proofing;
the next three years.
- mineral paints;
The company has invested €6.5 million in the
second plant, including €4 million for procurement - primers;
of machinery and €2.5 million for construction, - emulsions.
establishment of a quality control laboratory, and
site improvements. Bion-Impeks Ltd.
The plant’s present product range covers a wide The Bion-Impeks company was established in
spectrum of goods for building and renovation: 1993 and started manufacturing dry building
mixtures in 1998. In 2001, the company decided
- finishing materials (a diverse range of tile to launch production of acrylic water dispersion
adhesives, mixes for jointing); paints and primers; water dispersion paints
appeared under the Sim Gnomiv TM. The
- materials for flooring – Ceresit and Thomsit;
company has now developed new types of acrylic
- façade systems, including systems for heat- water dispersion paints. In 2003, the company
insulation of residential and commercial launched its third product– pentaphthalic enamel
properties; paints.
Helios Ltd. implemented and certified a system of Rated capacity: 80,000 m3 per year.
quality management to international standard ISO
9001:2000 in June 2005. The plant makes porous concrete blocks: 588 х
288 х 200 mm, 588 х 288 х 100 mm.
The company manufactures a wide range of
Capacity utilization:
products for building and renovation:
- 111,600 m3 produced in 2004;
- cement for tiles, marble, heat-insulating systems,
plaster boards, plaster and foam concrete blocks; - plant capacity utilization 139.5% in 2004;
- plaster; - production growth rate was 105.4% in nine
- filler; months of 2005 vs. nine months in 2003.
133
- foam concrete D-350-400; - cement mortar М-50.
TABLE 5-2. PLANT’S CAPACITY UTILIZATION
Lime-sand bricks Lime
Production in 2003 30.1 million eq. bricks 41,600 tons
Production in 2004 33.6 million eq. bricks 44,040 tons
Production in nine months of 2004 25.7 million eq. bricks 35,660 tons
Production in nine months of 2005 19.0 million eq. bricks 45,700 tons
Plant rated capacity utilization, percent 24.8 47.2
Plant rated capacity utilization in 2004 26.8 48.9
Production growth rate in 2004 vs. 2003 111.6 percent 105.9 percent
Production growth rate in nine months of 2005 vs. nine 73.9 percent 128.2 percent
months in 2004
- imported equipment in excellent condition; - 47.25 million equivalent bricks produced in 2002;
- 53.8 million equivalent bricks produced in 2003;
- Plant No.15 put into production in Kharkiv,
capacity of 30 million equivalent bricks per year; - rated capacity utilization of 89.7%;
- production growth rate of 113.9% in 2003 vs.
- certified to ISO 9001:2000. 2002.
Description of plant’s production: Plans:
- Ceramic facing bricks in wide range of colors, - increase high-quality brick capacity;
DSTU BV.2.7-61-97; - launch a plant in Kyiv oblast.
TABLE 5-3. SBK PERFORMANCE IN 2004-2005
2004 2005
Total sales, million equivalent 81.2 86.5
bricks
New sales, $ million 13.6 16.2
EBITDA, $ million 6.6 7.4
EBITDA (margin), % 49% 46%
Net profit, $ million 4.3 4.9
Net profit (margin), % 31% 30%
Source: “Proizvodstvo stroitelnykh materialov v Ukrainye: obzor strategiy vykhoda na rynok” (Production of Construction Materials in
Ukraine: Review of Market Entry Strategies), National Investment Alliance, February 2005.
Sylikatobeton Ltd., Sumy
Company’s profile:
TABLE 5-4. COMPANY DESCRIPTION
Lime-sand brick shop Porous concrete blocks shop
Capacity 89,4 million equivalent bricks 140 million equivalent bricks per year
per year
Complete process plant Made in Poland, condition Universal-60 production line, technical
satisfactory condition satisfactory
Autoclaves Passing autoclaves, seven 5 units, 3,6 m х 27
units, 2х40,4, condition
satisfactory
Five presses Made by LASCO, Germany
The company started active operations on the - electric dinas – 5577 tons
Ukrainian market in August 1996, establishing its
- glass dinas – 6454 tons
daughter company KNAUF-Marketing and
creating a joint venture based at the Stroimak - air-heating dinas – 10005 tons
Construction Materials Plant in Kyiv in 1997.
- dinas lightweight - 1528 tons
At the end of 1997, the company presented its
plan for reconstruction of the Stroimak plant and - ladle non-fired refractories – 18899 tons.
implemented full technical reconstruction of the
Steel plants are the main customers for refractory
plaster board shop. That reconstruction has been
conducted thanks to investments of more than 30 products.
million German marks. The plant was put into Siversky Dolomite Ltd.
production in February 1999.
Products:
PRODUCTION OF CERAMIC REFRACTORY
PRODUCTS - metallurgical fired dolomite
Makroindustriya Ltd. with Foreign Investments The plant was put into production in 1952. The
plant underwent two renovations during its career.
Products: ceramic tiles The main one was performed in 1983 and
consisted of replacing obsolete rotary furnaces
4,000 m2 of tiles per day
with new-generation furnaces based on Japanese
2 million ceramic borders per month technology. This made it possible for the plant to
reach a world-class cement production level.
The company imports tile blanks (biscuits) already Today, the company has a Japanese batching
fired from Spain. unit, a rotary furnace with cyclic heat exchanger
and a calcinator. The rated capacity of the rotary
Raw materials: furnace is 125 tons per hour. Today, a production
- frit (special glass composition supplied as capacity of 130 tons per hour has been achieved.
powder or pellets);
The plant produces high-quality cement:
- ceramic paints;
- Portland cement
- clay;
- Portland cement with additives
- kaolin;
- sulfate-resistance slag Portland cement.
- chemical additive liquid to improve glazing.
OJSC KRC can produce cement in accordance
The plant is certified to ISO 9001:2000. with the European standards EN – 197.
Karpatska Keramika Ltd. As of 2001, OJSC Kryvyi Rih Cement has been
part of the international company
Products: 48 varieties of ceramic tiles, two grades. HEIDELBERGCement Group, which owns over
96% of the company’s stock. The OJSC KRC has
The tile base (biscuit) is imported from Poland. implemented a system of conformity with the
Rated production capacity: 2,400 m2 per day. HEIDELBERGCement Group’s standards.
- Rated capacity; 300,000 tons of lime per year; - 13,800 tons produced in nine months of 2004;
- Facility has centralized gas service. - 16,700 tons produced in nine months of 2005;
- concrete slabs; Zhytomyr oblast and the city of Kyiv are the main
markets for the company’s products.
- mosaic stairs;
PRODUCTION OF PAINTS
- concrete duct products;
Jobi Ltd.
- artificial marble.
Jobi Ltd. was founded in 1998 to implement
Rated capacity is 60 m3 per hour. production of water dispersion paints in Ukraine,
for the first time. Germany’s Jobi Farbwerke
The main raw materials are bought from the
GmbH, a company that has been in the varnishes
following producers:
and paints sector since 1965, participated.
- cement from OJSC Mykolaivcement; Modern equipment, advanced technology, and
highly-skilled personnel – all have contributed to
- granite aggregate from quarries in Rivne, the successful production of the initial five types of
Zhytomyr, and Vinnytsya oblasts; Joby paint produced in Ukraine. The paint’s
quality meets German standards. A new series of
- sand from the Yasnyska sand pits in Lviv oblast.
Malton brand products was launched in late 2000
The plant’s laboratory controls aggregate quality to strengthen the company’s market position.
and quality of finished products. The company’s complete product range now
Beton Servis Plant comprises more than 100 products, including
water dispersion paints, primers, dyes, plaster,
There are several production units at the plant: and ornamental coating.
- A reinforced concrete unit produces The company is continuously trying to optimize
prefabricated reinforced concrete troughs, hollow- price and quality and offer products that meet the
core floor panels, stairs, beams, foundation needs of both professional builders and DIY
blocks, etc.; users.
- A concrete mixer unit is a modern installation Joby Ltd. products are offered through the
producing a complete range of concrete mixes; network of the company’s regional dealers
throughout Ukraine, as well as in many
- A rebar shop produces reinforcing cages, neighboring countries.
embedded items, net for brickwork, etc.
The company has modern equipment and a
Standart-IF number of modernized lines, which allow it to
Products: produce 15,000 tons of paints, primers, dyes,
acrylic plasters, and special ornamental coatings
- poured heat-insulating foam concrete; for external walls and interiors.
A plant laboratory was established at the - production of polyethylene water, gas pipes, and
company in 2003. The company launched pipes for cable laying;
production of water pipes made of PE 80 to - manufacturing of equipment for production of
international standard GOST 18599-2001. A plastics products.
permit was secured for production of gas pipes
with a diameter of up to 315 mm. The range of Products:
shaped products has been expanded. Since
2003, Ukrpolimerkonstruktsiya has been - film for greenhouses;
providing its customers with welding equipment. - stretch film;
Introduction of a three-shift operation and
The company has certified its quality The company manufactures a wide range of
management system to ISO-9001, version 2001 roofing materials and water-proofing polymer
international standard. bitumen; APP and SBS modified roll roofing
materials under the Spoli TM, which replace the
Goods and services: traditional ruberoid; sound-proofing materials;
Spoliizol, waterproofing materials; and Spoligont
Classical parquet bitumen roof tiles.
Parquet laying The facility has a modern Italian plant, using raw
Ornamental borders materials imported by leading European
manufacturers. A plant laboratory certified by
Geometrical parquet UkrSEPRO guarantees the highest ruberoid
quality. In 2003, the company was certified to
Palace parquet international quality management system ISO
9001:2000.
Parquet rosettes
OJSC Lutsk Cardboard and Ruberoid
Eurodoors and eurowindows
Integrated Plant
Furniture
The company is Ukraine’s largest producer of felt
Related goods roofing and polymer materials.
KhP Klenovyi Lyst Ltd. The plant was put into production in 1973 and
rated for the following production capacity:
Products: classical block parquet with high-grade
wood finish, and guaranteed humidity of 8%-2%. - 125 million m2 of felt roofing materials;
The products are intended for export. - roofing felt 50,000 tons.
A new block parquet line is capable of producing In 1993, the company launched production of
up to 100,000 m3 of block parquet made of linoleum with a heat- and sound-insulating
precious woods, including oak, beech, ash, nonwoven base with annual capacity of 3 million
maple, and other varieties. m2.
Steel made by the Ruukki concern is the Certificate of conformity for steel bent shapes of
primary raw material for the shaped sheets grades CW-50, CW-75, CW-100, UW-50, UW-75,
manufactured at Ruukki plants. UW-100, UD-27/28, CD-27/60;
The company exports its products to Moldova, ARSENAL metal roofing tiles and professional
Armenia, Transdniestria, and Georgia. flooring are made of galvanized steel with polymer
coatings of polyester and flat polyester.
Maister-Profi Ltd.
All Arsenal-Center products are made using
The Maister-Profi Plant has been operating on Italian equipment, which means European quality
Ukraine’s building market for five years now. standards are achieved.
The rated capacity of metal roof tiles line is 2 Arsenal-Center exports 30% of its products.
million m2. The company has a high-tech line
manufactured by Japan’s Toyo Engineering Inc. Product range:
The plant is used to produce metal roof tiles under
- Metal roofing tiles
the Tarti brand, of Lux and Standard types. The
plant has been certified to ISO 9001:2000 - Professional flooring
international quality control system.
- Water drain systems
Maister-Profi products are exported to
neighboring and other countries. - Heat insulation
The company has developed SHINGLAS flexible - steel water drain systems;
roof tiles. All products have Ukrainian and - metal roof tiles;
international certificates (ISO 9001 and ISO
9002). - module shares;
Pruszynski-Ukraine Ltd. - fitting elements;
Products: - shapes;
- professional flooring; - steel industrial buildings.
- façade modules;
5.3. LEVEL OF COMPETITION AND COMPETITIVE ADVANTAGES OF VARIOUS COMPANIES IN
THE INDUSTRY
Based on State Statistics Committee data, there materials as their core activity). Nearly half of
were about 9,000 enterprises on the construction these enterprises operate in the “production of
materials production market as of January 1, 2005 other nonmetal mineral products” sector.
(including 5,500 enterprises that produced these
TABLE 5-8. NUMBER OF ENTERPRISES IN THE SECTOR IN 2004 (WITH SALES OVER HRO)
Core Percentage Total in the
activity of sector
enterprises
Extraction of minerals (building stone, limestone, plaster and 430 7.7% 635
chalk, clay shale, sand and clay)
Wood sawing and planing, wood impregnation 1197 21.5% 2733
Production of varnishes and paints 226 4.1% n/a
Rubber and plastics industry (production of rubber products, 1447 26.0% 1898
plastics processing: plates, pipes, and shapes made of plastics;
plastic equipment for building; other plastics products)
Production of other nonmetal mineral products (production of 2261 40.7% 3463
glass and glass products; ceramic sanitary ware; ceramic
refractories; ceramic tiles; clay bricks, roof tiles; cement, lime,
and plaster; concrete and plaster products; stone dressing;
other mineral products)
Total 5561 100.0% 8729 (less
varnish and
paint
production)
Looking closer at the production of other nonmetal concentration of companies is among producers
mineral products subsector, the highest of concrete and plaster products.
In 2000-2004, the number of enterprises whose - Stone dressing (from 268 to 366 enterprises);
core activities were in the following subsectors - Production of other mineral products (from 164
increased: to 193 enterprises).
- Extraction of building stone (from 185 to 208 The number of manufacturers decreased for only
enterprises); one classification code, namely, “production of
- Extraction of sand and clay (from 149 to 182 ceramic tiles” (from 55 to 40 enterprises).
enterprises);
As regards entrepreneurs’ own assessments of
- Wood sawing and planing, wood impregnation the level of competition in the construction
(from 801 to 1197 enterprises); materials sector, the majority of them (50.9%)
- Processing of plastics (from 878 to 1266 believe that it is quite high. In particular, 32.0% of
enterprises); entrepreneurs describe it as high and 18.9% as
- Production of bricks, clay roof tiles (from 326 to very high. At the same time, about a tenth of
418 enterprises); entrepreneurs (10.6%) disagree that the level of
competition in their markets is high (4.9%
- Production of concrete and plaster products describe it as low and 5.7% as very low).
(from 879 to 929 enterprises);
FIGURE 5-1. ASSESSMENT OF THE LEVEL OF COMPETITION ON THE CONSTRUCTION
MATERIALS MARKET, PERCENT OF ENTERPRISES
2.5 5.7
4.9
18.9
32.0
Entrepreneurs believe the key methods of product quality compared to the competition (this
competitive activity on the domestic market are is the key to competitive advantage for 49.6% of
setting the most attractive price (52.1% of enterprises). Only a relatively small percentage of
surveyed entrepreneurs believe that their pricing enterprises rely on developing unique products
is their competitive advantage); ensuring proper (14.3%) or modifying existing products (10.1%) to
operations of sales channels (51.3% of gain competitive advantage.
enterprises favor this approach), and better
TABLE 5-3. FACTORS HELPING PRODUCERS REMAIN COMPETITIVE ON THE DOMESTIC
MARKET, PERCENT OF ENTERPRISES
Factors Percent of
enterprises
Competitive pricing 52.1
Established sales channels 51.3
Superior product quality compared to the 49.6
competition
Ongoing research of market demand 28.6
Product specifications 22.7
Improved production technology 22.7
Renewal of product range 21.8
Improved product design 16.0
Company’s products are unique 14.3
Modification of products 10.1
Source: Survey of 122 enterprises in the construction materials sector
The same factors (competitive prices, established entrepreneurs, the basis for competitiveness on
sales channels, and superior product quality foreign markets for those companies that operate
compared to competition) are, according to on them.
The ratios of production costs at enterprises of and 77.7% for small enterprises. However,
different sizes differ. In particular, large medium-sized enterprises are ahead of the two
enterprises have the highest share of other groups in terms of costs of semi-finished
expenditures for raw materials and inputs products for their own production and finished
(84.4%), compared to 65.6% for medium-sized products for their own production needs.
Large enterprises are the main exporters, with (21.4% conduct export transactions at present),
66.7% of the total engaged in export right now or and 21.1% for small enterprises (only 11.5% are
having been engaged in it in the past (55.6% are involved in export business at present, and 78.8%
pursuing export business at present). That have never been involved in export).
percentage is 40.4% for medium-sized enterprises
FIGURE 7-2. INVOLVEMENT IN EXPORT TRANSACTIONS AMONG ENTERPRISES OF DIFFERENT
SIZE, PERCENT OF ENTERPRISES
78,8
59,5
55,6
Enterprise is exporting its products
This situation is explained by the different which to search for foreign partners and can retain
opportunities enterprises of different sizes have such partners with attractive offers. Also, foreign
available to them. Large enterprises have large partners are more likely to collaborate with large,
production volumes, part of which can be well-known, reliable companies, rather than with
exported. small and obscure enterprises, where the
likelihood of default on obligations is higher.
Volumes are naturally smaller for small
enterprises, and they could export only small The main markets for exporting companies
batches, which is not economical. Besides, large include CIS countries (with 83.3% of all exporters
companies have greater financial resources with
The majority of enterprises have been present on (experienced by 45.8% of exporters) and the
the above markets for not more than five years; administrative and bureaucratic barriers in
however, there are companies that have been Ukraine (37.5% of enterprises). Only 20.8% have
working on CIS, European, Canadian, and U.S. experienced no problems when entering CIS
markets for 50 years. Further on, only exports to markets. It should be noted that few
CIS countries will be discussed, since too few entrepreneurs (8.3%) believe that Ukrainian
companies are exported to other markets. products are non-competitive abroad due to their
quality. However, a quarter of entrepreneurs
Among the main obstacles companies face when (25.0%) have doubts about the price
exporting to CIS countries, the most frequently competitiveness of Ukrainian goods.
named was the high level of competition
TABLE 7-2. OBSTACLES EXPERIENCED BY ENTERPRISES IN ENTERING CIS MARKETS,
PERCENT OF ENTERPRISES*
Percent of exporting
Obstacles
enterprises
High level of competition 45.8
Administrative and bureaucratic barriers in Ukraine 37.5
Administrative and bureaucratic barriers in target
29.2
countries
Product non-competitiveness by price 25.0
Product non-competitiveness by quality 8.3
Other 0.8
No obstacles 20.8
Source: Survey of 122 construction materials industry enterprises.
*The sum total of percent exceeds 100%, as several answer options could be selected.
Half of the enterprises (50.0%) that export to CIS themselves. Some 41.7% of enterprises entered
countries have found partners in CIS thanks to these markets thanks to participation in seminars
their personal contacts, and the same percentage and trade shows, 33.3% by using the Internet, and
of enterprises have been found by CIS partners 20.8% by working through business associations.
TABLE 7-3. EXPORTERS’ METHODS OF FINDING PARTNERS IN CIS MARKETS, PERCENT OF
ENTERPRISES*
Methods of finding partners Percent of
exporting
enterprises
Personal contacts 50.0
Partners approached my company themselves 50.0
Participation in seminars, trade shows, etc. 41.7
Through the Internet 33.3
With the help of databases 20.8
Through foreign missions, chambers of trade, embassies 20.8
Through business associations 20.8
Source: Survey of 122 construction materials industry enterprises.
*The sum total of percent exceeds 100%, as several answer options could be selected.
The great majority of exporting enterprises Ukrainian (82.1% of enterprises) and imported
(82.1%) export the same products that they make raw materials and inputs (50.0% of enterprises).
for the domestic market, while only a little more
than one third of enterprises (35.7%) manufacture Production of export goods from domestic raw
special or adapted products for export. Some materials has a clear prevalence here, with 89.7%
21.7% of enterprises exported both products of enterprises making their export produce from
intended for the domestic market and especially Ukrainian raw materials, and only 20% using raw
manufactured/adapted products. materials of foreign origin; 16.7% of enterprises
use raw materials under give-and-take
Nearly all exporting enterprises (89.7%) are arrangements, and 11.5% of enterprises use both
exporting finished products, while 13.8% of domestic and foreign raw materials when
enterprises export raw materials, and 24.1% manufacturing goods for exports. Such a
export semi-finished items. Thus, there is some preference for domestic raw materials can be
(smaller) part of enterprises that export both explained by their sufficient production volumes
finished products and raw materials and inputs. In and acceptable prices.
particular, from among enterprises exporting
finished products, 19.2% export semi-finished The volume of construction materials export is not
products, and 11.5% also export raw materials. very large in financial terms, with about a quarter
of exporting enterprises having exported less than
In making construction materials intended for Hr250,000 worth of products each in 2005. Less
export, the exporting enterprises use both than half the enterprises (42.8%) exported less
than Hr1 million worth of goods.
TABLE 7-5. EXPORT SALES IN 2005, PERCENT OF ENTERPRISES
Export sales Percent of
exporting
enterprises
Up to Hr100,000 19.0
Hr 100,000 to Hr500,000 23.8
Hr500,000 to Hr1.0 million 14.3
Hr1.0 million to Hr10.0 million. 28.6
More than Hr25.0 million 14.3
Source: Survey of 122 construction materials industry enterprises.
The manufacturers indicate the following main in the course of their subsequent activities in
barriers for entry into foreign markets: foreign markets (at least at present). Further
obstacles to expanding production are identified
- non-competitiveness of products in terms of by the respondents as follows:
quality;
- lack of information about demand for exported
- administrative and bureaucratic barriers in products in foreign markets;
Ukraine;
- difficulties in finding partners;
- administrative and bureaucratic barriers in target
countries. - uncompetitiveness of products in terms of
quality;
The manufacturers, however, are facing obstacles
not just at the time of their market entry, but also - price barriers;
Enterprises have no
plans to export
products
Undecided
55,4
Large enterprises are most inclined to export in exports, compared to 31.0% of medium-sized
the future, with 53.8% of them planning future enterprises, and 28.3% of small enterprises.
Large
53,8 34,6 11,5
enterprises Enterprises plan to export products
Small
28,3 62,3 9,4
enterprises
Support
Partially support
20,2 20,2 Don't support
Difficult to tell
10,9 Heard nothing about this
2,5
Some 44.0% of large enterprises fully support percentages of those who categorically oppose
WTO accession, as do 46.3% of medium-sized joining this organization are 20.0%, 17.1%, and
enterprises and 47.2% of small enterprises. The 20.8%, respectively.
FIGURE 7-6. SUPPORT FOR UKRAINE’S JOINING THE WORLD TRADE ORGANIZATION AMONG
ENTERPRISES OF DIFFERENT SIZE, PERCENT OF ENTERPRISES
Support
Don't support
Medium-sized
46.3 22.0 17.1 9.8 4.9
enterprises
Difficult to tell
The proportions of support for Ukraine’s joining 63.0% of entrepreneurs (41.2% support such
the European Union are approximately the same entry fully and 21.8% partially), while 22.7% do
as those for joining the WTO. Full or partial not support it. Some 10.9% of enterprises have
support for joining this association is pledged by not decided on their position yet.
41.2 Support
Partially support, partially don't
Don't support
21.8 22.7 Difficult to tell
Heard nothing about this
10.9
3.4
FIGURE 7-8. SUPPORT FOR UKRAINE’S JOINING THE EUROPEAN UNION AMONG ENTERPRISES
OF DIFFERENT SIZES, PERCENT OF ENTERPRISES
Support
Similarly, there prevails a generally positive surveyed entrepreneurs fully support entry, and
attitude nationwide to Ukraine’s joining the 18.5% support it partially). Some 24.4% of
Common Economic Space (42.9% of the entrepreneurs oppose joining this association.
FIGURE 7-9. SUPPORT FOR UKRAINE’S JOINING THE COMMON ECONOMIC SPACE (CES),
PERCENT OF ENTERPRISES
42,9
Support
Support
Opinions regarding the possible consequences of improvement in the condition of their companies,
joining all the above organizations are quite 29.4% expect it to worsen, and 33.9% are
diverse. With regard to the possible convinced than no changes will occur.
consequences of Ukraine’s joining the WTO and
EU, the opinions split almost equally. 28.2% of More positive expectations have developed with
entrepreneurs expect WTO accession to improve regard to Ukraine’s joining the Common Economic
the situation for their companies, 27.3% expect Space, with only 16.8% of the surveyed
the situation to worsen, and another 31.8% entrepreneurs believing that joining this grouping
believe that nothing will change. would have a negative impact on their companies.
Some 33.6% expect improvements in their
Expectations are roughly the same for entry to the situation, and 35.5% believe nothing would
European Union: 22.9% of entrepreneurs expect change.
33.0 34.0
29.5 29.5
28.2 28.2
Situation will
24.8 improve
22.3 21.4
Situation will not
change
16.2 16.0 17.0
Situation will
worsen
Difficult to tell
Well informed
Consequences for own
9.4 38.5 38.5 6.0 7.7
company
Insufficiently informed
Consequences for
6.8 41.0 39.3 5.1 7.7
furniture industry Absolutely uninformed
Assessments of the possible consequences of materials sector, 75.0% expect improvements for
Ukraine’s WTO accession depend to a significant their company; and among those who are very
degree on the level of awareness of the well informed about the consequences of
respondents. Notably, the level of awareness has Ukraine’s WTO for individual enterprises, 54.5%
a positive influence on approval of country’s expect improvements).
joining the WTO.
However, no such correlation exists for a lesser
In particular, among those who believe degree of awareness and insufficient awareness.
themselves to be very well informed regarding the Both those insufficiently informed and sufficiently
consequences of WTO accession for the country informed expect positive changes at their
in general, 71.4% are convinced that the enterprises in equal proportions.
accession would have positive consequences for
their enterprises (among those who consider Among those who expect a worsening of the
themselves to be very well informed about the situation for their companies, there are more who
impact of WTO accession on the construction believe themselves to be well informed about the
consequences of WTO accession at all levels.
7. ISO 10013-95. Guidelines for Developing 22. DSTU ISO 9001:2000 Quality Control
Quality Manuals. Systems. Requirements.
8. ISO 14001-96. Environmental Quality 23. DSTU ISO 9004-2001 Quality Control
Management Systems. General Systems. Guidelines on Operational
Requirements and Application Improvements.
Recommendations.
24. DSTU ISO 10011-1-97 Guidelines on
9. ISO 14004-96. Environmental Quality Quality System Verification. Part 1.
Management Systems. Development and Verification.
Operational Methods Manual.
Also, there is a significant correlation between the enterprises, 56.1% have all the products
level of mandatory standardization and standardized and 57.1% have all their products
certification in Ukraine, and the size of an certified. For large enterprises, these indicators
enterprise. The lowest level of both mandatory are 85.2% and 63.2%, respectively. Also, the
standardization and certification is among small smallest proportions of large enterprises are
enterprises, where 48.1% and 49.0% of neither standardized nor certify their products
enterprises have all their produce standardized (only 3.7% and 14.8% of such enterprises,
and certified, respectively. Of medium-sized respectively).
Part of products
subject to
Medium-sized
56.1 24.4 19.5 certification
enterprises
Products are not
subject to
Small enterprises 48.1 19.2 32.7 certification
Part of products
subject to
Medium-sized
57.1 14.3 28.6 certification
enterprises
Products are not
subject to
Small enterprises 49 21.6 29.4 certification
Apparently, this is due to the fact that, first, large However, the level of international certification of
companies are more concerned about their Ukrainian enterprises is very low. Only 26.1% of
reputations. Second, they export more (exporting enterprises have certificates for their goods and
is more difficult without certificates, and demand is 23.5% for quality management systems. Some
lower for such products). Third, they use better 70.4% of enterprises lack international certificates
equipment and make products of higher quality, for goods or for quality management systems.
so it is easier for them to obtain the required
certification.
TABLE 8-2. LEVEL OF INTERNATIONAL CERTIFICATION OF UKRAINIAN ENTERPRISES IN
CONSTRUCTION MATERIALS SECTOR, PERCENT OF ENTERPRISES*
Level of international certification Percent of
enterprises
International certificate for goods 26.1
International certificate for quality management system 23.5
Neither of the above 70.4
Source: Survey of 122 construction materials enterprises.
*The sum total of percent may exceed 100%, as several answer options could be selected.
This situation is primarily connected with export 77.3% have ISO series certificates, and 22.7%
activity. Enterprises operating exclusively on the have certificates of other series.
domestic market do not really need to secure
international certification, as their products sell A smaller percentage of enterprises plan to certify
without it. However, export-oriented large their management systems to ISO in the future. In
companies are forced to certify their products to particular, 8.3% of enterprises have already
international standards to be able to sell in foreign started the certification process for quality
markets. This can be a matter of prestige, as management systems. Another 13.3% plan to
having an international quality certificate lets a certify their quality management systems in the
company present its goods as high-quality ones. future, and 15.8% are as yet undecided on the
matter. The remaining enterprises (62.5%) have
Among enterprises that have international no plans to certify their quality management
certificates for quality management systems, systems.
The proportions of enterprises that have not enterprises (only 18.5%). Also, the proportions of
attracted any investments are not much different those that attracted investors from Ukraine and
for small and medium-sized enterprises, at 45.1% other countries (except CIS) are somewhat higher
and 50.5%, respectively; however, this for large enterprises, even though this difference
percentage is significantly smaller for large is not very significant.
The overwhelming majority (84.1%) of enterprises invested in technology, and 33.3% invested in
that have invested in production are spending buildings and structures.
money mainly on equipment. Some 39.1%
84.1
In technology
In equipment
39.1
33.3 In buildings and structures
Other
7.2
In technology
Medium-sized In equipment
33.3 81.0 28.6
enterprises In buildings, structures
Enterprises that attracted external investments did The methods of attracting Ukrainian and foreign
so in monetary form (92.3% of such enterprises investors are nearly the same. The most effective
received investments in cash). The second largest methods of attracting a client in 2005 included:
proportion of investments were made in
equipment (46.2% of enterprises received this - acting through business associations;
type of investment), with technology being third - acting through embassies, missions, etc.;
(30.8% of enterprises received investments in the
form of technology). - at seminars, business meetings, conferences,
etc.
Methods for Ukrainian and foreign investors are
almost the same. The most effective methods for - using databases, via the Internet;
attracting investors in 2005 included seminars,
business meetings, conferences, and through - acting through business acquaintances in
entrepreneurs’ circles of friends. Ukraine;
TABLE 8-5. REASONS FOR NOT USING EXTERNAL INVESTMENTS IN 2005, PERCENT OF
ENTERPRISES*
REASONS PERCENT OF
ENTERPRISES
SUFFICIENT OWN FUNDS/RESOURCES FOR DEVELOPMENT 49.5
MY COMPANY IS NOT ATTRACTIVE FOR INVESTORS COMPARED TO OTHER 11.2
COMPANIES IN MY INDUSTRY
THE INDUSTRY IN WHICH MY COMPANY OPERATES IS NOT ATTRACTIVE 7.5
FOR INVESTORS
IT IS DIFFICULT TO FIND AN INVESTOR 24.3
THERE IS NO BUSINESS PLAN FOR INVESTORS 2.8
I AM NOT SATISFIED WITH INVESTORS’ REQUIREMENTS AND THE HIGH 16.8
OBLIGATIONS I WOULD HAVE BEFORE THEM
OTHER 6.5
DIFFICULT TO SAY 7.5
Source: Survey of 122 construction materials enterprises.
*The sum total of percent may exceed 100%, as several answer options could be selected.
The greatest proportion of those who have (19.6%) of companies who believe themselves to
enough of their own funds for investing is among be unattractive for investors. The group of
small enterprises (54.3%) and large enterprises medium-sized enterprises had the largest
(52.4%), and the smallest is among medium-sized proportion of companies that have had difficulties
enterprises (42.5%). The group of small in finding external investors (40.0%).
enterprises also has the largest proportion
FIGURE 8-7. REASONS FOR NOT USING EXTERNAL INVESTMENTS IN 2005 AMONG
ENTERPRISES OF DIFFERENT SIZE, PERCENT OF ENTERPRISES*
Small
54.3 19.6 6.513.02.510.9
enterprises No business plan for investors
Overall, completion of these procedures was not procedures created problems of medium
very problematic for enterprises. The average complexity for comapnies. The most complicated
score of the difficulty of completing all these were procedures related to licensing (average
administrative procedures is less than 3 on the score of 2.9) and obtaining of permits (average
scale of 5, where 1 means insignificant problems score of 2.5). Import-related procedures appear to
and 5 significant problems. In other words, these be the easiest.
Licensing procedures appear to be the most registration was the simplest (average score 2.0).
difficult for large enterprises (average score 2.7), For small enterprises, the procedures related to
as do inspections by supervisory agencies licensing and certification and standardization
(average score 2.5), whereas export- and import- were the most difficult (average score 2.6), and
related produces were the easiest (average score the export and import procedures were the easiest
1.9). For medium-sized enterprises, licensing (average scores 1.7 and 1.5, respectively). In
procedures also appear the most difficult (average general, medium-sized enterprises are the most
score 3.5), as do export procedures (average critical of administrative procedures.
score 3.0), whereas registration and re-
As regards registration and re-registration, the When completing import-related procedures, there
enterprises noted long queues, red tape, wastage are such problems as significant time loss,
of significant amount of time, unstable conditions excessive prices, a huge number of required
and system complexity, corruption, documents, problems with customs, a great
procrastination, and limited reception hours. number of supervisory agencies, difficulties in
finding required information, and procrastination in
In terms of obtaining permits, enterprises issuing documents.
complained about long queues, red tape, wasted
time, poor performance of officials, high prices, Inspections by supervisory agencies created such
interference with business, corruption, large problems as irrelevant nit-picking, red tape,
numbers of documents, frequent changes in significant losses of time, excessive prices,
legislation, delays and procrastination in excessive frequency of inspections, inspections’
registration, incompetence. interference with conducting business, corruption,
an excessive number of supervisory agencies,
Complaints about the licensing procedure excessive requirements, procrastination in issuing
included long queues, red tape, wastage of great documents, and no advance notification about
amounts of time, an imperfect legislative inspections.
framework, and intentional stalling in completion
of the procedure. Entrepreneurs were asked to indicate in the
survey whether or not the conditions of completing
When completing certification procedures, various administrative procedures in 2005 have
entrepreneurs experience long lines, red tape, changed compared to previous years, and to
shoddy work by officials, high prices, complex specify what changes have occurred, if any. The
procedures, a large number of unnecessary overwhelming majority of entrepreneurs have not
conditions, and procrastination in issuing the felt any noticeable changes. Only 13.2%
documents. mentioned simplification of these procedures.
As regards export-related procedures, Another 12.4% are convinced that it has become
entrepreneurs complain about significant wastage even more difficult to obtain permits, and 64.5%
of time, excessive prices, the great number of have not noticed any changes.
documents and the complexity of the procedures,
corruption, procrastination in issuing documents,
and the great number of supervisory agencies.
9.9 12.4
64.5
Large enterprises are significantly more active in local government decisions their participation is
this respect, with 37.5% of them having even higher, with 56% of large enterprises taking
participated in discussing central government draft part.
resolutions that would impact their business. In
FIGURE 9-4. LEVEL OF PARTICIPATION OF CONSTRUCTION MATERIALS ENTERPRISES OF
DIFFERENT SIZES IN DISCUSSING DRAFT RESOLUTIONS THAT WOULD REGULATE ACTIVITIES
IN THE SECTOR, PERCENT OF ENTERPRISES
56.0
37.5
2.1
0.0
Small Medium-sized Large
enterprises enterprises enterprises
Another means of influencing decisions is making common, while another 21.8% rather agree with
informal payments to officials. Among the this statement. That is, more than half of
interviewed entrepreneurs, 16.4% fully agree with entrepreneurs believe such a problem exists,
the statement that such payments are quite while the other half disagree that it exists.
Absolutely agree
Rather agree
Rather disagree
30.0 21.8 Absolutely disagree
Difficult to tell
20.0
Source: Survey of 122 construction materials enterprises
Agree
Medium-sized Disagree
43.2 35.1 21.6
enterprises Difficult to say
The most common reason entrepreneurs gave depending on the enterprise. Where
unofficial payments to officials was to speed representatives of small enterprises estimate this
administrative procedures. This reason was share to be 3.9% on average, representatives of
indicated by 38.1% of entrepreneurs. Some medium-sized estimate it to be 5.8%, and
25.7% of entrepreneurs say informal payments representatives of large enterprises say it is close
had to be made in order to avoid obstacles in to zero.
completing administrative procedures. Another
24.8% of entrepreneurs believe the reason is that As regards the forms in which such payments are
officials demand such payments. Some 38.1% of made, cash payments are the most common (as
entrepreneurs could not (or would not) say why indicated by 60.7% of entrepreneurs who
such payments are made. answered this question). Second place is
occupied by in-kind payments (referred to by
The share of these payments of enterprises’s 26.8% of entrepreneurs), and third place involved
profits is not very large, 3.8% on average. making various voluntary payments (25.0% of
Besides, this assessment differed significantly entrepreneurs).
In-kind informal payments become more popular representatives of small enterprises. Also, no
as company size decreases. While 46.2% of representatives of large enterprises mentioned
representatives of large enterprises mention this making voluntary payments, whereas 34.6% of
form of payment, 35.3% of representatives of small enterprise and 29.4% of medium-sized
medium-sized enterprises do, and 11.5% of enterprise representatives did.
69.2 Cash
61.5
52.9
46.2
In-kind
34.6 35.3
29.4
23.1
Subscription to departmental
15.4 publications
11.5 11.8
0.0
Making voluntary contributions to
Small Medium-sized Large funds or paying into accounts of
enterprises enterprises enterprises organizations indicated by officials
5.0
Enterprise is a member of business
27.7 association
Large enterprises are engaged in business survey, 76.0% of large enterprises were
associations to a much greater degree than small members, compared to 19.5% of medium-sized
and medium enterprises. At the time of this enterprises and only 11.3% of small enterprises.
FIGURE 10-2. EXTENT OF PARTICIPATION OF ENTERPRISES OF DIFFERENT SIZES IN BUSINESS
ASSOCIATIONS AND GROUPINGS, PERCENT OF ENTERPRISES
Enterprise is a membe r of
busines s association
Large
76,0 4,0 16,0 4,0
enterpri s es Enterprise is not a mem ber of
busines s association, but was a
member previously
Me di um-si zed
19,5 7,3 70,7 2,4 Enterprise has never b een a
e nterpris es
member of business association
Of companies that are members of various enterprises involved in them. Some 39.4% of the
business associations, participation in industry said enterprises participate in associations of
business associations prevails, with 63.6% of enterprises of various industries/activity types.
Companies that are members of business participate in city business associations, and only
associations mostly participate in national 15.6% are members of international business
business associations. Some 59.4% of associations. Notably, only large and medium-
enterprises that are members of associations, sized enterprises are members of international
belong to type. Some 28.1% of enterprises belong business associations.
to regional business associations, 21.9%
TABLE 10-2. PARTICIPATION OF CONSTRUCTION MATERIALS ENTERPRISES IN BUSINESS
ASSOCIATIONS OF DIFFERENT LEVELS, PERCENT*
Association level Percent of
enterprises
National business association 59.4
Regional business association 28.1
Local business association 21.9
International business association 15.6
SOURCE: SURVEY 122 CONSTRUCTION MATERIALS ENTERPRISES.
*The sum total of percent exceeds 100%, as several answer options could be selected.
3206000000 Other colors; preparations indicated in Note 3 to this group 88507.6 98926.0 68825.8 94264,4 135265,2 167245,0
and different than the materials of product items 3203, 3204
or 3205; inorganic substances of grades used as
luminophors with clearly determined or undetermined
chemical composition
3207000000 Ready pigments, opacifiers and dyes, glassy enamels and 1592.4 2185.7 2062.7 2635,4 3378,1 3574,5
glaze, engobes (clip), liquid glossing agents and similar
preparations of the grades used for production of ceramic,
enamel and glass products; glaze frit, etc.
3208000000 Paints and varnishes (including enamels and polishes) 9966.4 9135.0 5364.6 7672,6 9702,5 10472,4
based on synthetic polymers or chemical modified natural
polymers, dispersed or dissolved in nonaqueous solutions;
solutions specified in Note 4 to this group:
3209000000 Paints and varnishes (including enamels and polishes) 108.6 228.8 228.7 503,6 845,2 1293,0
based on synthetic polymers or chemical modified natural
polymers dispersed or dissolved in aqueous solutions:
3212000000 Pigments (including metal powders and metal flakes) 94.5 71.7 61.9 738,8 603,5 274,7
dispersed in nonaqueous solutions, in the liquid, paste or
stiff mass form, of the grades used for production of paints
(including enamels); stamping foil; painting means
3214000000 Glazing putty, grafting clay, pitch cement, putty (for sealing) 349.2 1949.2 2081.8 2107,4 1692,5 1958,2
and other mastics; filler for paintwork, non-fireproof mixes
for preparing surfaces of façades, internal walls of buildings,
floor, ceiling, etc.:
3917000000 Pipes, tubes and hoses and their fitting parts (e.g., couplers, 3023.7 10240.9 12188.3 25740,9 43855,4 71273,2
bends, sleeves) made of plastics:
3919000000 Boards, sheets, strips, bands, film, and other flat plastics 1355.7 2144.2 22128.9 351,9 610,5 1488,4
products, self-adhesive, in rolls or otherwise:
3920000000 Other boards, sheets, film, band, and plates made of 10050.5 10214.6 13485.8 12335,9 18942,2 21870,3
plastics, non-porous, non-strengthened and non-laminated
(not multilayered), not combined with other materials,
without base, and not otherwise connected with other
materials:
3921000000 Other plates, sheets, film, and bands made of plastics: 5878.1 5945.0 3969.8 7140,4 14105,8 27524,1
3922000000 Baths, showers, sinks, bidets, toilet bowls and their seats 138.0 152.6 206.0 318,2 518,5 690,5
and covers, flushing tanks, and similar sanitary-hygienical
products made of plastics:
4008000000 Plates, sheets, bands, rods, and shapes made of uncured 1098.5 9965.2 7870.8 1596,7 852,1 2431,9
vulcanite:
4009000000 Pipes, hoses, and sleeves made of uncured vulcanite, with 1095.3 1411.3 1894.1 3364,5 4969,0 6369,4
or without fittings (e.g., gaskets, bends, couplings)
4400000000 Wood and woods products, charcoal 217435.2 229796.5 289638.0 400368,3 516459,6 533853,0
4401000000 Firewood in the form of logs, billets, brushwood, branches, 1228.1 540.7 304.8 4183,3 5184,6 10488,7
etc.; wood chips or shavings; sawdust, chips, shavings,
wood fragments, waste, and scrap agglomerated or non-
agglomerated, in the form of billets, bricks, pellets, etc.:
4403000000 Unprocessed lumber, disbarked or non-disbarked, coarsely 70178.0 56124.3 65610.2 88239,1 130208,8 136891,1
squared or unsquared:
4408000000 Sheets of single-layer plywood and veneers, and sheets for 3219.7 4842.0 7581.9 13481,7 20748,8 26959,1
glued plywood (glued or otherwise) and other types of wood
length-cut, sawn into parts or peeled, planed or non-planed,
with polished or unpolished surface, joined or unjoined
4409000000 Wood, plank timber (including unassembled parquet boards 3324.3 4191.8 7146.0 8331,4 10647,8 9628,2
and borders) as molded strips (with feathers, grooves,
matched, with chamfered edges, beading fillet joined,
shaped, rounded, etc)
4410000000 Particle boards and similar boards made of wood or other 3726.5 8283.0 10711.1 14910,2 24815,3 29128,6
wood-like materials, agglomerated or not agglomerated,
using resins or other organic binders:
4411000000 Fiber boards made of wood or other wood-like materials, 1289.9 1810.2 2251.4 2857,2 4046,9 3201,2
agglomerated or not agglomerated, using resins or other
organic binders:
4412000000 Glued plywood, veneered wood panels and similar materials 11458.0 15700.6 19154.9 24516,5 33398,8 39858,4
of layered wood
4413000000 Wood pressed as blocks, slabs, bars or shapes 910.0 663.4 520.7 412,1 260,4 275,6
4418000000 Joinery and carpentry products, building parts, including 1081.6 2426.0 3121.4 9786,5 12860,1 16469,8
porous wood panels, assembled parquet panels, roofing
shingles and batten:
4418100000 - windows, balcony doors, their frames, and finish casings: 72.6 330.6 433.2 1083,8 2890,4 4168,3
4418200000 - doors and their frames, platband, and thresholds: 312.2 227.4 237.8 331,4 554,9 652,1
6810000000 Cement, concrete or artificial stone products, reinforced or 2786.4 3064.9 2056.6 2602,6 7074,8 4595,4
non-reinforced:
6810110000 - - building blocks and bricks: 151.3 270.2 340.3 503,2 819,3 1058,8
6810111000 - - - made of light concrete (based on crushed pumice, 115.5 264.4 326.7 449,8 586,0 806,7
granulated slag, etc.)
6810119000 - - - other 35.8 5.8 13.7 53,4 233,3 252,1
6810190000 - - other: 138.2 133.8 360.9 332,4 434,2 287,6
6901001000 - bricks with mass over 650 kg/m3 0.0 0.0 0.3 1,0 0,0 0,0
6901009000- other 53.3 172.3 51.7 57,5 14,2 51,1
6902000000 Refractory bricks, blocks, tiles, and similar refractory 27008.2 25009.4 21138.2 20137,9 33073,1 32153,6
materials, except products made of siliceous stone powder
or similar siliceous rock
6904000000 Building bricks, floor blocks, load-bearing or facing tiles, and 104.1 44.8 238.8 604,2 1125,5 2424,6
similar ceramics products:
6904100000- building bricks 58.8 41.1 215.2 569,3 1091,0 2412,8
6904900000 - other 45.4 3.7 23.5 34,9 34,5 11,8
6905000000 Roofing tiles, chimney components, deflectors, ornamental 0.0 0.0 0.9 0,0 0,0 3,7
architectural and other building ceramic products:
6905100000 - roofing tiles 0.0 0.0 0.0 0,0 0,0 3,5
6905900000- other 0.0 0.0 0.9 0,0 0,0 0,2
6906000000 Ceramic pipes, insulating pipelines, water discharge lines, 1.1 13.8 0.9 12,9 1,2 15,5
and pipe fittings
6907000000 Ceramic non-glazed paving tiles and slabs, floor covering, 326.1 19.9 34.7 66,0 282,9 2893,5
and stone walls; ceramic non-glazed mosaic cubes, and
similar products with and without base:
6908000000 Ceramic glazed tiles and slabs for paving or floor covering, 1081.8 1071.6 1537.0 1534,7 3591,4 4046,4
stone walls; ceramic glazed mosaic cubes and similar
products
6910000000 Sinks, wash bowls, sink consoles, baths, bidets, toilet 3999.6 4772.3 8227.5 11646,3 15659,7 16088,0
bowls, flushing tanks, urinals, and similar sanitary ware
made of ceramics:
6910100000 - made of porcelain 3362.3 4631.8 8218.2 11618,2 15595,6 16050,9
6910900000 - other 637.3 140.5 9.3 28,1 64,1 37,0
7000000000 Glass and glass products 46060.0 60947.2 66657.5 130266,0 149058,1 65203,5
7003000000 Cast and rolled glass produced as sheets, plates or shapes, 367.6 173.0 34.8 218,4 230,2 173,0
with absorptive, reflective or non-reflective layer or without
such layer, however, not otherwise processed:
7006000000 Glass of product items 7003, 7004 or 7005, bent, cut, 266.1 163.7 468.4 673,6 1159,0 1888,9
engraved, drilled, enameled or otherwise processed,
however, not framed or otherwise combined with other
materials:
7007000000 Safety glass, including strengthened / hardened or 199.9 447.1 543.8 727,5 1096,1 1147,5
laminated glass:
7008000000 Laminated insulating products made of glass: 3.8 0.0 4.1 0,0 33,4 3,1
7009000000 Glass mirrors, framed or unframed, including rearview 652.0 520.1 487.8 653,3 841,5 408,5
mirrors:
7016000000 Paving blocks, tiles, bricks, dalles, roofing tiles, etc., made 8.2 1.0 6.8 18,8 85,8 17,0
of pressed or cast glass, wired or otherwise, for building or
for structures; cubes, square and other pieces of glass, with
or without base, for mosaics or other such decorations;
glass
7019000000 Glass fiber (including glass wool) and products (e.g., thread, 2531.6 3087.2 2168.1 3067,1 5063,9 7124,7
fabric):
for second half year of 2001 only
3207000000 Ready pigments, opacifiers and dyes, glassy enamels and 3422.1 4766.6 4674.1 5835,3 6911,8 7083,8
glaze, engobes (clip), liquid glossing agents and similar
preparations of the grades used for production of ceramic,
enamel and glass products; glaze frit, etc.
3208000000 Paints and varnishes (including enamels and polishes) 9067.7 9008.0 5173.3 6944,6 8397,7 7548,0
based on synthetic polymers or chemical modified natural
polymers, dispersed or dissolved in nonaqueous solutions;
solutions specified in Note 4 to this group
3209000000 Paints and varnishes (including enamels and polishes) 153.1 342.5 414.5 943,2 1320,6 1724,0
based on synthetic polymers or chemical modified natural
polymers dispersed or dissolved in aqueous solutions
3212000000 Pigments (including metal powders and metal flakes) 25.5 20.1 28.1 815,9 680,5 224,7
dispersed in nonaqueous solutions, in the liquid, paste or
stiff mass form, of the grades used for production of paints
(including enamels); stamping foil; painting means
3917000000 Pipes, tubes and hoses and their fitting parts (e.g., 709.2 4641.0 7237.6 14408,1 23917,5 34952,7
couplers, bends, sleeves) made of plastics
3918000000 Plastic flooring, self-adhesive or non-self-adhesive, in rolls 1.6 12.7 436.7 2494,1 3978,3 4759,0
or sheets; plastics covering for walls or ceilings as
specified in Note 9 to this group
3919000000 Boards, sheets, strips, bands, film, and other flat plastics 302.1 282.0 40.4 54,8 124,3 265,9
products, self-adhesive, in rolls or otherwise
3920000000 Other boards, sheets, film, band, and plates made of 4443.0 4796.6 5553.4 5140,4 7312,3 8818,1
plastics, non-porous, non-strengthened and non-laminated
(not multilayered), not combined with other materials,
without base, and not otherwise connected with other
materials
3921000000 Other plates, sheets, film, and bands made of plastics 2494.9 3566.8 2706.3 3038,3 5223,0 7920,2
3922000000 Baths, showers, sinks, bidets, toilet bowls and their seats 46.7 59.5 86.8 126,2 185,0 205,3
and covers, flushing tanks, and similar sanitary-hygienical
products made of plastics
4008000000 Plates, sheets, bands, rods, and shapes made of uncured 253.4 621.7 495.7 318,1 308,3 738,9
vulcanite
4009000000 Pipes, hoses, and sleeves made of uncured vulcanite, with 283.3 452.8 777.4 1143,0 1680,6 1730,6
or without fittings (e.g., gaskets, bends, couplings)
4401000000 Firewood in the form of logs, billets, brushwood, branches, 60414.4 30820.4 14665.2 164542,1 187092,8 342517,1
etc.; wood chips or shavings; sawdust, chips, shavings,
wood fragments, waste, and scrap agglomerated or non-
agglomerated, in the form of billets, bricks, pellets, etc.
4403000000 Unprocessed lumber, disbarked or non-disbarked, 1035861.9 898957.2 1197106.4 1553179,7 2140291,7 1958685,0
coarsely squared or unsquared
4404000000 Cooper’s wood; split logs; wood stakes and pales, pointed 1197.1 2609.6 10926.8 3722,3 1350,6 1673,4
but not length cut; squared or rounded wood, but not
turned, bent or otherwise processed, used for
manufacturing walking canes and umbrellas
4407000000 Sawn or length planed lumber, split or peeled, dressed or 589591.7 657533.4 799449.9 942740,6 1052098,3 966237,3
undressed, polished or unpolished, tongue-joined or not,
more than 6 mm thick
4408000000 Sheets of single-layer plywood and veneers, and sheets 4523.4 5076.2 6524.5 12168,7 14899,2 16309,6
for glued plywood (glued or otherwise) and other types of
wood length-cut, sawn into parts or peeled, planed or non-
planed, with polished or unpolished surface, joined or
unjoined
4409000000 Wood, plank timber (including unassembled parquet 10307.1 10126.1 13330.7 12933,4 16976,6 13945,1
boards and borders) as molded strips (with feathers,
grooves, matched, with chamfered edges, beading fillet
joined, shaped, rounded, etc)
4411000000 Fiber boards made of wood or other wood-like materials, 7117.3 10119.1 11909.4 14117,5 14577,6 9789,9
agglomerated or not agglomerated, using resins or other
organic binders:
4412000000 Glued plywood, veneers wood panels and similar materials 23046.8 33089.9 39354.3 47728,2 62839,1 68518,6
of layered wood
4413000000 Wood pressed as blocks, slabs, bars or shapes 1412.8 1524.9 1011.4 497,6 307,1 227,8
4418000000 Joinery and carpentry products, building parts, including 1978.4 3836.8 4996.0 7770,9 10819,0 12223,3
porous wood panels, assembled parquet panels, roofing
shingles and batten
4418100000 - windows, balcony doors, their frames, and finish casings 31.1 259.5 273.9 467,3 943,2 1266,8
4418200000 - doors and their frames, platband, and thresholds 494.2 326.5 372.3 278,0 381,3 281,7
6801000000 Paving blocks, border stone and paving slabs made of 7012.9 10834.1 15108.7 15977,6 15487,1 20768,9
natural stone (except shale)
6806000000 Slag wool, mineral silicate wool, and similar mineral wools; 1823.5 2972.2 2555.7 3833,4 4218,8 9205,8
layered vermiculite, expanded clays, foam slag, and
similar expanded mineral products; mixtures and products
made of heat-insulating or sound-proofing materials,
except products of product items
6807000000 Products made of asphalt or similar materials (e.g., 1181.1 1373.9 2049.4 4890,7 4702,2 6809,8
petroleum bitumen or coal-tar pitch)
6808000000 Panels, slabs, tiles, blocks, and similar products made of 2995.2 6628.8 1958.5 9771,0 31127,0 33933,9
plant fibers, straw or shavings, chips, particles, sawdust,
etc., agglomerated with cement, plaster or other mineral
substances
6809000000 Plaster or plaster-based mixes products 2247.7 3150.2 32996.0 16838,2 2925,6 1023,5
6810000000 Cement, concrete or artificial stone products, reinforced or 70200.3 67792.2 41950.2 48392,1 73309,3 63083,3
non-reinforced:
6810110000 - - building blocks and bricks: 5399.2 7875.4 8507.7 9862,6 13576,5 18381,6
6810111000 - - - made of light concrete (based on crushed pumice, 3188.2 7520.9 8166.0 9270,4 10953,2 14695,0
granulated slag, etc.)
6903000000 Other products made of refractory ceramics (e.g., retorts, 2754.4 2717.6 5848.6 13423,1 13024,7 9240,6
crucibles, firepots, muffles, nozzles, mufflers, supports,
cupels, pipes, tubes, casings, rods, bars), except for
products made of siliceous stone powder or similar
siliceous rock
6904000000 Building bricks, floor blocks, load-bearing or facing tiles, 2280.5 970.9 3737.2 7919,3 11043,2 22102,9
and similar ceramics products:
6904100000 - building bricks 2078.4 815.2 3582.6 7601,3 10635,2 22028,5
6904900000 - other 202.1 155.7 154.6 318,0 408,0 74,4
6908000000 Ceramic glazed tiles and slabs for paving or floor covering, 5212.5 5620.4 8860.9 7994,3 15553,7 14250,6
stone walls; ceramic glazed mosaic cubes and similar
products:
6910000000 Sinks, wash bowls, sink consoles, baths, bidets, toilet 9141.3 13912.5 19843.9 20969,7 21829,9 19847,0
bowls, flushing tanks, urinals, and similar sanitary ware
made of ceramics:
6910100000 - made of porcelain 7969.6 13600.9 19833.5 20931,7 21733,4 19806,4
6910900000 - other 1171.7 311.6 10.4 38,0 96,5 40,5
7000000000 Glass and glass products 201654.5 203734.17 210166.3 174861,3 176128,6 161371,1
7003000000 Cast and rolled glass produced as sheets, plates or 1084.6 848.0 150.6 819,6 510,8 393,1
shapes, with absorptive, reflective or non-reflective layer or
without such layer, however, not otherwise processed
7004000000 Drawn, blown or sheet glass, with absorptive, reflective or 9688.6 8382.0 9065.1 8366,9 11917,8 10669,6
non-reflective layer or without such layers, however, not
otherwise processed
7005000000 Thermically polished glass and glass with flat or polished 73654.2 88372.3 92950.5 59877,0 61390,3 57431,8
surface, in sheets with absorptive or reflective layer or
without such layer, however, not otherwise processed
7009000000 Glass mirrors, framed or unframed, including rearview 480.6 457.6 402.6 486,2 462,2 185,5
mirrors
7016000000 Paving blocks, tiles, bricks, dalles, roofing tiles, etc., made 47.3 2.3 2.5 43,4 104,4 23,8
of pressed or cast glass, wired or otherwise, for building or
for structures; cubes, square and other pieces of glass,
with or without base, for mosaics or other such
decorations; glass
7019000000 Glass fiber (including glass wool) and products (e.g., 1698.6 2042.3 1116.2 1434,2 2629,4 3486,7
thread, fabric)
Kaolin and other kaolin clays, calcined or not calcined 0.4 3.8 10.0 83.6 56.0
Other clays (except expanded clays of product group 6806), andalusite, kyanite, 260.5 1372.2 220.0 814.2 724.2
fibrolite, calcined or uncalcined; mulite, chamotte or silica earth
Fossil meal [mountain flour] (e.g., kieselguhr, tripoli powder, and diatomite) and 359.6 369.4 695.4 1131.7 1323.4
similar siliceous earth with specific weight of not more than 1, calcined or uncalcined
Pumice, emery, natural corundum, natural garnet and other natural abrasive 3.6 4.9 16.2 305.8 411.1
materials, thermally treated or untreated
Shale, coarsely dressed or undressed, sawn or not sawn, or otherwise separated 124.8 142.1 235.3 334.1 365.0
into rectangular or square blocks or slabs
Marble, travertine [calcareous sinter], ekausin and other types of limestone for 146.9 47.5 165.3 389.7 526.8
monuments or building with specific weight of not less than 2.5, and alabaster,
coarsely dressed or undressed, sawn or not sawn, or otherwise separated into
blocks and slabs
Granite, porphyry, basalt, sandstone, and other stones for monuments or building, 22.0 604.2 46.8 1146.1 1886.9
coarsely dressed or undressed, sawn or not sawn, or otherwise separated into
rectangular or square blocks or slabs
Calcined or uncalcined dolomite; dolomite, hewn or coarsely dressed, sawn or 861.6 1814.4 1794.8 2384.8 3179.4
otherwise divided into rectangular or square blocks or slabs; agglomerated dolomite
(including tarred dolomite)
Natural magnesium carbonite (magnesite); melt magnesia; sintered (agglomerated) 69851.1 65560.0 58347.9 67751.1 78520.8
magnesium with or without smaller amounts of other oxides, added before
agglomeration; other magnesium oxides, with or without additives
Plaster stone; anhydrite; plaster [in the form of calcined plaster or calcium sulfate], 3963.8 5317.7 7615.4 9542.6 10552.9
colored or uncolored, with or without smaller amounts of accelerants or retardants
Limy flux; limestone and limy stones used for making lime or cement 18.1 36.6 167.5 22.5 9.0
Quick lime, slaked lime, and hydraulic lime, except calcium oxide and hydroxide of 473.1 807.4 715.6 1042.4 1052.1
product group 2825
Portland cement, alumina cement, slag Portland cement, sulfate-resistant cement 2734.7 12346.8 4006.0 3528.0 6823.2
and similar water-hardened cements, colored or uncolored, ready-mixed or in the
form of clinkers
Asbestos 8045.3 11025.6 8731.3 13866.7 21038.4
Mica, including that split into irregular plates or splittings, mica reject 67.8 92.9 142.4 181.3 274.5
Natural steatite, coarsely dressed or undressed, sawn or not sawn, or otherwise 367.7 438.7 289.5 460.3 460.3
divided into rectangular or square blocks of slabs; talc
Feldspar, leucite, nepheline and nepheline syenite; fluorite [fluorspar] 8641.8 9929.4 8392.6 10673.7 8772.7
Mineral substances not included into other groups 974.1 1939.4 1832.0 2275.1 2712.2
2505100000 - siliceous sand and quartz sand 2050.3 3826.5 2855.5 4059.8 4287.8 4639.2
2505900000 - other sand 12361.4 11617.9 10580.7 9634.8 3385.6 246.7
2506000000 Quartz (except natural sand), quartzite, coarsely 314.3 114.1 226.7 443.0 536.8 588.4
dressed or undressed, sawn or not sawn, or
otherwise divided into rectangular or square blocks
or slabs
2507000000 Kaolin and other kaolin clays, calcined or not 0.3 16.9 21.4 93.5 179.2 202.9
calcined:
2507002000 - kaolin 0.0 11.7 21.4 73.4 158.1 65.8
2507008000 - other kaolin clays 0.0 0.0 0.0 20.1 21.1 137.1
2508000000 Other clays (except expanded clays of product 5667.2 33149.1 1350.7 2091.0 3225.3 2309.5
group 6806), andalusite, kyanite, fibrolite, calcined
or uncalcined; mulite, chamotte or silica earth
2509000000 Chalk 24969.3 30324.5 34493.3 33948.3 28908.2 30167.7
2510000000 Natural calcium phosphates [phosphorites], natural 214905.6 235886.1 111309.7 168456.5 391497.8 482898.6
aluminum-calcium phosphates, and phosphate
chalk
2511000000 Natural barium sulfate (barite); natural barium 16570.1 15013.8 15035.0 13350.6 20509.5 19812.0
carbonite (witherite), calcined or uncalcined, except
for barium oxide of product group 2816
2512000000 Fossil meal [mountain flour] (e.g., kieselguhr, tripoli 1226.9 1285.0 1702.5 2235.2 2531.0 2648.1
powder, and diatomite) and similar siliceous earth
with specific weight of not more than 1, calcined or
uncalcined
2513000000 Pumice, emery, natural corundum, natural garnet 7.8 1.4 151.8 6245.5 3885.5 307.7
and other natural abrasive materials, thermally
treated or untreated
2515000000 Marble, travertine [calcareous sinter], ekausin and 362.1 250.6 894.2 1315.5 1893.2 1556.5
other types of limestone for monuments or building
with specific weight of not less than 2.5, and
alabaster, coarsely dressed or undressed, sawn or
not sawn, or otherwise separated into blocks and
slabs
2516000000 Granite, porphyry, basalt, sandstone, and other 74.9 483.7 337.1 637.2 850.0 898.1
stones for monuments or building, coarsely dressed
or undressed, sawn or not sawn, or otherwise
separated into rectangular or square blocks or
slabs
2517000000 Pebbles, gravel, crushed rock or crushed stones, 7182.6 8204.8 20140.1 35426.0 72490.7 81416.4
which are normally used as concrete aggregate or
for paving motorways and railroad tracks, or other
types of ballast, thermally treated or untreated
pebbles and gravel, macadam
2518000000 Calcined or uncalcined dolomite; dolomite, hewn or 70092.9 124043.5 103007.9 139051.9 119073.3 115967.7
coarsely dressed, sawn or otherwise divided into
rectangular or square blocks or slabs;
agglomerated dolomite (including tarred dolomite)
2519000000 Natural magnesium carbonite (magnesite); melt 507168.9 483782.3 440327.5 487988.2 502039.3 482240.8
magnesia; sintered (agglomerated) magnesium
with or without smaller amounts of other oxides,
added before agglomeration; other magnesium
oxides, with or without additives
2520000000 Plaster stone; anhydrite; plaster [in the form of 163985.6 247809.7 349189.4 367978.9 495224.2 471526.4
calcined plaster or calcium sulfate], colored or
uncolored, with or without smaller amounts of
accelerants or retardants
2521000000 Limy flux; limestone and limy stones used for 2207.1 3099.2 27796.5 3650.0 150.9 46.0
making lime or cement
2525000000 Mica, including that split into irregular plates or 446.6 445.7 615.9 813.9 1050.7 799.4
splittings, mica reject
2528000000 Natural sodium borates and their concentrates 0.8 0.0 0.0 1.0 0.0 0.1
(calcined or uncalcined), except the borates
isolated from natural saline solutions; natural boric
acid with H2BO3 content of not more than 80 %
mass in equivalent dry substance
2529000000 Feldspar, leucite, nepheline and nepheline syenite; 64907.3 79062.1 73018.1 98607.2 91164.7 154839.4
fluorite [fluorspar]:
2530000000 Mineral substances not included into other groups: 6711.8 21426.2 27044.1 31460.8 27776.1 42652.4
Kaolin and other kaolin clays, calcined or not calcined 8744.3 10229.1 8133.4 9824.2 15881.1
Other clays (except expanded clays of product group 6806), andalusite, kyanite, 56036.5 61233.6 68921.0 81204.1 92922.3
fibrolite, calcined or uncalcined; mulite, chamotte or silica earth
Fossil meal [mountain flour] (e.g., kieselguhr, tripoli powder, and diatomite) and 58.5 113.3 139.1 181.4 167.1
similar siliceous earth with specific weight of not more than 1, calcined or
uncalcined
Pumice, emery, natural corundum, natural garnet and other natural abrasive 24.0 11.4 0.5 - 6.0
materials, thermally treated or untreated
Shale, coarsely dressed or undressed, sawn or not sawn, or otherwise separated - - - - 0.2
into rectangular or square blocks or slabs
Marble, travertine [calcareous sinter], ekausin and other types of limestone for 34.2 7.1 1.8 16.6 36.1
monuments or building with specific weight of not less than 2.5, and alabaster,
coarsely dressed or undressed, sawn or not sawn, or otherwise separated into
blocks and slabs
Granite, porphyry, basalt, sandstone, and other stones for monuments or building, 5581.6 5341.2 5930.7 7485.1 10131.4
coarsely dressed or undressed, sawn or not sawn, or otherwise separated into
rectangular or square blocks or slabs
Calcined or uncalcined dolomite; dolomite, hewn or coarsely dressed, sawn or 204.4 300.1 418.6 423.6 643.3
otherwise divided into rectangular or square blocks or slabs; agglomerated
dolomite (including tarred dolomite)
Natural magnesium carbonite (magnesite); melt magnesia; sintered 276.1 487.7 341.6 674.4 861.7
(agglomerated) magnesium with or without smaller amounts of other oxides,
added before agglomeration; other magnesium oxides, with or without additives
Plaster stone; anhydrite; plaster [in the form of calcined plaster or calcium sulfate], 159.4 188.8 370.5 1053.4 1427.1
colored or uncolored, with or without smaller amounts of accelerants or retardants
Limy flux; limestone and limy stones used for making lime or cement 2570.7 2578.7 2366.4 2363.2 3215.0
Quick lime, slaked lime, and hydraulic lime, except calcium oxide and hydroxide of 2.3 47.3 114.2 184.6 195.9
product group 2825
Portland cement, alumina cement, slag Portland cement, sulfate-resistant cement 16964.4 9628.2 17682.3 33625.9 48135.4
and similar water-hardened cements, colored or uncolored, ready-mixed or in the
form of clinker
Asbestos 47.6 44.8 66.0 56.5 6.6
Natural steatite, coarsely dressed or undressed, sawn or not sawn, or otherwise 51.7 24.4 24.8 18.2 13.2
divided into rectangular or square blocks of slabs; talc
Feldspar, leucite, nepheline and nepheline syenite; fluorite [fluorspar] 3.7 - 2.7 138.1 216.5
Mineral substances not included into other groups 1252.0 1057.1 1058.4 1461.6 1675.5
Natural barium sulfate (barite); natural barium carbonite (witherite), 0.0 0.0 4.5 0.0 0.5 0.0
calcined or uncalcined, except for barium oxide of product group 2816
Fossil meal [mountain flour] (e.g., kieselguhr, tripoli powder, and 359.9 390.0 448.0 572.5 446.4 436.0
diatomite) and similar siliceous earth with specific weight of not more than
1, calcined or uncalcined
Pumice, emery, natural corundum, natural garnet and other natural 220.0 13.5 3.0 0.0 59.2 0.0
abrasive materials, thermally treated or untreated
Shale, coarsely dressed or undressed, sawn or not sawn, or otherwise 0.0 0.0 0.0 0.0 1.5 0.0
separated into rectangular or square blocks or slabs
Granite, porphyry, basalt, sandstone, and other stones for monuments or 70465.4 62423.1 68472.9 79145.1 103608.8 122389.7
building, coarsely dressed or undressed, sawn or not sawn, or otherwise
separated into rectangular or square blocks or slabs
Pebbles, gravel, crushed rock or crushed stones, which are normally used 2013738.3 4118677.0 4840168.2 6518974.1 6193839.6 6985273.0
as concrete aggregate or for paving motorways and railroad tracks, or
other types of ballast, thermally treated or untreated pebbles and gravel,
macadam
Calcined or uncalcined dolomite; dolomite, hewn or coarsely dressed, 2608.5 7258.7 7275.0 8811.2 14942.5 11627.5
sawn or otherwise divided into rectangular or square blocks or slabs;
agglomerated dolomite (including tarred dolomite)
Natural magnesium carbonite (magnesite); melt magnesia; sintered 354.0 2144.5 2205.0 4699.1 5481.6 476.3
(agglomerated) magnesium with or without smaller amounts of other
oxides, added before agglomeration; other magnesium oxides, with or
without additives
Plaster stone; anhydrite; plaster [in the form of calcined plaster or calcium 18756.5 5977.4 12983.7 65088.0 117846.2 80282.2
sulfate], colored or uncolored, with or without smaller amounts of
accelerants or retardants
Limy flux; limestone and limy stones used for making lime or cement 530718.8 488377.7 367643.1 380601.9 466214.6 502684.0
Quick lime, slaked lime, and hydraulic lime, except calcium oxide and 70.1 1356.2 2824.3 2784.8 3431.6 1195.6
hydroxide of product group 2825
Portland cement, alumina cement, slag Portland cement, sulfate-resistant 881110.0 382296.4 658016.5 1167573.0 1356369.6 1478437.0
cement and similar water-hardened cements, colored or uncolored,
ready-mixed or in the form of clinker
Feldspar, leucite, nepheline and nepheline syenite; fluorite [fluorspar] 25.0 0.0 83.0 3451.9 5177.0 25620.2
Mineral substances not included into other groups 17379.3 14497.9 13308.9 16773.3 15203.6 14976.9
cost, Hr thousand
energy, Hr
Designer
Item #
1. GOST 12865-67. Expanded Vermiculite. 21. GOST 310.3-76. Cements. Techniques for
Measuring Normal Density, Setting Times, and
2. GOST 13578-68. Porous Filler Panels for
External Walls of Industrial Buildings. Uniformity of Volume Modification.
Specifications. 22. GOST 5742-76. Cell Concrete Heat-Insulating
Products.
3. GOST 15879-70. Glass Ruberoid.
Specifications. 23. GOST 9590-76. Paper-Laminated Decorative
Plastic. Specifications.
4. GOST 16549-71. Through Cast–Iron, Gland,
Coupler-Joint Stopcocks Rated for P <= 24. GOST 7251-77. Polyvinylchloride Linoleum of
10 kgf/cm2 with Water Drain Plug. Fabric Core Base. Specifications.
5. GOST 16914-71. Rubber Multilayer Linoleum – 25. GOST 12852.0-77. Cell Concrete. General
Relin. Requirements to Testing Methods.
6. GOST 17241-71. Polymer Floor Covering 26. GOST 12852.5-77. Cell Concrete. Vapor
Materials and Products. Classification. Permeability Factor Measuring Technique.
7. GOST 17584-72. Cast-Iron Sleeves and 27. GOST 12852.6-77. Cell Concrete. Sorption
Coupling Parts for Asbestos Cement Pressure Humidity Measuring Technique.
Pipes.
28. GOST 16381-77 (ST SEV 5069-85). Heat-
8. GOST 11118-73. Panels Made of Autoclaved Insulating Construction Materials.
Cell Concrete for External Building Walls. Classification and General Specifications.
Specifications.
29. GOST 19111-77. Molded Shaped Strip
9. GOST 18853-73. Swinging Wood Gates for Polyvinylchloride Products. Specifications.
Industrial Buildings and Structures.
Specifications. 30. GOST 22362-77. Reinforced Concrete
Structures. Tendon Jacking Force Measuring
10. GOST 18956-73. Rolled Roofing Materials. Techniques.
Ageing Test Technique under Influence of
Artificial Climatic Effects 31. GOST 22406-77. Wood Parts and Products for
Building. Technique for Measuring Conditional
11. GOST 18958-73. Silicate Paints. Humidity Permeability of Moisture-Resistant
Coatings and Impregnation.
12. GOST 19100-73. Glued Wood Structures.
Methods of Testing Glued Joints for Weather- 32. GOST 22695-77. Laminated Wall and Building
Resistance Sheeting Panels with Heat-Insulation Made of
Foam Plastics. Foam Plastics. Strength Test
13. GOST 19279-73. Polymer Cement Paints. Techniques.
14. GOST 2551-75. Rolled Roofing Felt and 33. GOST 22783-77. Concretes. Accelerated
Water-Proofing Materials. Packing, Marking, Compression Strength Measuring Technique.
Storage, and Transportation.
34. GOST 12730.0-78. Concretes. General
15. GOST 6927-74. Concrete Façade Slabs. Requirements for Techniques of Measuring
Specifications. Density, Humidity, Water Absorption, Porosity,
16. GOST 8411-74. Drainage Ceramic Pipes. and Water Permeability.
Specifications. 35. GOST 12730.1-78. Concretes. Density
17. GOST 8426-75. Clay Bricks for Chimneys. Measuring Techniques.
18. GOST 11052-74. Expanded Gypsum-Alumina 36. GOST 12730.2-78. Concretes. Humidity
Cement. Measuring Technique.
19. GOST 19570-74. Panels Made of Autoclaved 37. GOST 12730.3-78. Concretes. Water
Cell Concrete for Internal Load-Bearing Walls, Absorption Measuring Technique.
Partitions, and Ceilings of Residential and 38. GOST 12730.4-78. Concretes. Porosity
Public Buildings. Specifications. Measuring Techniques.
20. GOST 310.2-76. Cements. Grinding Fineness 39. GOST 12784-78. Mineral Powder for Asphalt
Measuring Technique. Concrete Mix. Test Techniques.
42. GOST 23009-78. Prefabricated Concrete and 64. GOST 18343-80. Pallets for Bricks and
Reinforced Concrete Structures and Products. Ceramic Stones. Specifications.
Conventional Designations (Grades). 65. GOST 1839-80. Asbestos Cement Pipes and
43. GOST 2694-78. Foamed Diamite and Diamite Unions for Free-Flow Pipelines. Specifications.
Heat-Insulating Products. Specifications.
66. GOST 19592-80 (ST SEV 6011-87, ST SEV
44. GOST 310.1-78. Cements. General Provisions. 6012-87, ST SEV 6013-87, ST SEV 1771-79,
ST SEV 1772-79, ST SEV 1773-79). Fiber
45. GOST 475-78. Wood Doors. General Boards. Test Techniques.
Specifications.
67. GOST 23972-80. Reinforced Concrete
46. GOST 7481-78. Wire Sheet Glass. Foundations for Parabolic Trays.
Specifications. Specifications.
47. GOST 14791-79. Non-Hardening Sealing 68. GOST 24022-80. Prefabricated Reinforced
Building Mastic. Specifications. Concrete Foundations for Columns of
Agricultural Buildings. Specifications.
48. GOST 15836-79. Bituminous-Rubber
Insulating Cement. Specifications. 69. GOST 24064-80. Rubber Cementing Mastics.
Specifications.
49. GOST 23464-79 (ST SEV 4471-84). Cements.
Classification. 70. GOST 24099-80. Decorative Slabs Based on
Natural Stone. Specifications.
50. GOST 23499-79. Building Sound-Absorptive
and Sound-Proofing Materials and Products. 71. GOST 24155-80. Reinforced Concrete
Classification and General Specifications. Structures of High Passenger Platforms.
Specifications.
51. GOST 23668-79. Stone Blocks for Paving.
Specifications. 72. GOST 24210-80. Flooring Polymer Roll and
Tile Materials. Sound-Insulating Properties
52. GOST 23735-79. Sand and Gravel Mixes for Measuring Technique.
Building Works. Specifications.
73. GOST 24316-80. Concretes. Hardening Heat
53. GOST 23789-79 (ST SEV 826-77 for test Release Measuring Techniques.
techniques). Plaster Binder. Test Techniques.
74. GOST 24404-80. Wood and Wood Materials
54. GOST 23790-79. Phosphate Fireproof Wood Products. Varnish and Paints Coating.
Covering. Specifications. Classification and Designations.
55. GOST 23835-79. Rolled Roofing Felt and 75. GOST 24434-80. Multilayer Panels with Heat
Water-Proofing Materials. Classification and Insulation Made of Foam Plastic for Building
General Specifications. Walls and Paneling. Foam Plastics. Shrinkage
56. GOST 23899-79. Reinforced Concrete Measuring Technique.
Columns for Parabolic Trays. Specifications. 76. GOST 24452-80. Concretes. Techniques for
57. GOST 10140-80. Heat-Insulating Slabs Made Measuring Prism Strength, Modulus of
of Mineral Wool on Bitumen Binder. Elasticity, and Poisson’s Ratio.
Specifications. 77. GOST 24476-80. Prefabricated Reinforced
58. GOST 12504-80. Concrete and Reinforced Concrete Foundations for Columns of
Concrete Internal Wall Panels for Residential Interspecific Application Frames for Multistory
and Public Buildings. General Specifications. Buildings. Specifications.
59. GOST 15825-80. Colored Portland Cement. 78. GOST 5087-80. Window and Door Handles.
Specifications. Types and Basic Dimensions.
60. GOST 16136-80. Heat-Insulating Perlite 79. GOST 539-80. Asbestos Cement Pressure
Bitumen Slabs. Specifications. Pipes and Unions. Specifications.
61. GOST 16297-80. Sound-Proofing and Sound- 80. GOST 6785-80. Reinforced Concrete Window
Absorptive Materials. Test Techniques. Stools. Specifications.
120. GOST 25880-83. Building Heat-Insulating 140. GOST 21519-84. Windows and Balcony
Materials and Products. Packing, Marking, Doors, Shop Windows and Stained Glass
Transportation, and Storage. Windows Made of Aluminum Alloys. General
Specifications.
121. GOST 25881-83. Chemical-Resistant
Concretes. Test Techniques. 141. GOST 21924.0-84. Reinforced Concrete
Slabs for Paving City Roads. Specifications.
122. GOST 25884-83. Glued Wood Structures. Construction and Dimensions (with Revision
Method for Measuring Strength of Glued Joints No.1-IUS N5-88).
at Layered Chipping.
142. GOST 21924.3-84. Reinforced Concrete
123. GOST 25898-83. Construction Materials Slabs for Paving City Roads, Reinforcements
and Products. Vapor Permeability Resistance and Mounting and Joining Products.
Measuring Techniques. Construction and Dimensions.
124. GOST 2697-83. Bitumen Roofing Felt. 143. GOST 26134-84. Concretes. Frost-
Specifications. Resistance Ultrasonic Measuring Technique.
125. ST SEV 4178-83. Wood Doors. Leaf 144. GOST 26138-84. Components and Parts
Plane Static Load Resistance Testing of Built-in Cabinets and Entresols for
Technique. Residential Buildings. Specifications.
126. ST SEV 4179-83. Wood Doors. 145. GOST 26149-84. Roll Flooring Based on
Perpendicular Leaf Plane Static Load Chemical Fibers. Specifications.
Resistance Testing Technique.
146. GOST 26150-84. Building Polymer
127. ST SEV 4180-83. Wood Doors. Impact Finishing Materials and Products Based on
Load Resistance Testing Technique. Polyvinylchloride. Specifications.
128. ST SEV 4181-83. Wood Doors. Planarity 147. GOST 26253-84. Buildings and
Measuring Technique. Structures. Technique for Measuring Thermal
Stability of Filler Structures.
129. ST SEV 4182-83. Wood Doors.
Dimensions and Rectangularity Error 148. GOST 26254-84. Buildings and
Measuring Technique. Structures. Techniques for Measuring Heat
Transfer Resistance of Filler Structures.
130. ST SEV 4183-83. Wood Doors. Heat
Transfer Resistance Measuring Technique. 149. GOST 26281-84. Heat-Insulating Building
Materials and Products. Acceptance
131. ST SEV 4184-83. Wood Doors. Air- Regulations.
Tightness, Etc., Testing Technique.
150. GOST 26301-84. Transom Items for
132. GOST 6428-83. Plaster Boards for Windows, Shop Windows, and Stained Glass
Partitions. Specifications. Windows Made of Aluminum Alloys. Types and
133. GOST 4.225-83. Sewer and Drainage Main Dimensions.
Ceramic Pipes. Range of Indicators. 151. GOST 4001-84. Rock Masonry Units.
134. GOST 4.227-83. Cast-Iron and Plastic Specifications.
Sewer Pipes and Shapes and Cast-Iron 152. GOST 6133-84. Concrete Masonry Units.
Unions for Asbestos Cement Pressure Pipes. Specifications.
135. GOST 3344-83. Crushed Rock and Slag 153. GOST 948-84. Reinforced Concrete
Sand for Road Building. Specifications. Lintels for Brick Wall Buildings. Specifications.
136. GOST 12730.5-84. Concretes. Water- 154. SniP 2.04.02-84. Water Supply. External
Tightness Measuring Techniques. Networks and Structures.
137. GOST 11024-84. External Concrete and
Reinforced Concrete Panels for Residential
and Public Buildings. General Specifications.
286. DSTU BV.2.7-26-95. Clayey Raw 304. DSTU BV.2.7-49-96 (GOST 10060.2-95).
Materials. Clay Drying Sensitivity Measuring Concretes. Accelerated Techniques for
Technique. Measuring Frost-Resistance under Repeated
Freezing and Thawing.
287. DSTU BV.2.7-27-95. Shell Limestone
Sand for Building Work. Specifications. 305. DSTU BV.2.7-50-96 (GOST 10060.3-95).
Concretes. Dilatometric Technique for
288. DSTU BV.2.7-28-95. Ceramic Roofing Accelerated Frost-Resistance Measurement.
Tiles. Specifications.
306. STU BV.2.7-51-96 (GOST 10060.4-95).
289. DSTU BV.2.7-29-95. Small Natural Fillers Concretes. Structural and Mechanical
Made of Industrial Waste, Artificial Fillers for Technique for Accelerated Frost-Resistance
Construction Materials, Products, Structures, Measurement.
and Works. Classification.
344. DSTU BV.2.7-98-2000 (GOST 21880-94). 360. DSTU BV.2.7-110-2001 (GOST 30698-
Mineral Wool Heat-Insulating Matting. 2000). Hard Building Glass. Specifications.
Specifications.
361. DSTU BV.2.7-111-2001. Plaster Board for
345. DSTU BV.2.7-99-2000 (GOST 22950-95). Partitions and Internal Wall Sheeting.
Enhanced Rigidity Mineral Wool Slabs Based Specifications.
on Synthetic Binder. Specifications.
362. DSTU BV.2.7-110-2002. (GOST 30698-
346. DSTU BV.2.7-100-2000. Active Mineral 2000). Hardened Glass. Building
Additives for Cements. Testing Techniques. Specifications.