THE RUSSIAN MARKET FOR ROOFING
AND WATERPROOFING MATERIALS:
WHAT LIES AHEAD?
NTC “Gidrol-Krovlja” ©, Moscow, Russia, 2008
The Russian market for roofing and waterproofing materials:
what lies ahead?
AGENDA
1. A Crisis and the main Russia’s macroeconomic indicators
2. The current state and trends of the Russia’s construction market
3. The review of the Russia’s waterproofing materials market:
•
production
•
changes in consumer and producer prices
•
exports and imports
•
market size
•
single ply polymer membranes market
4. The forecast of market development for the period until 2013
NTC “Gidrol-Krovlja” ©, Moscow, Russia, 2008
2
The Russian market for roofing and waterproofing materials:
what lies ahead?
Development of Russia’s GPD
vs. crude oil price
Former President Putin, 17/06/2010:
“Russia begins to come out of a
recession”
Annual average oil "Urals" price
100
21,1
80
49,8
16,3
27,6
50
0
60
-50
-66,0
40
-100
2005
2006
2007
Urals price
%, p.a.growth
10
%, p.a. growth
USD / barrel
100
2009
2010F
index (2004=100%)
Weaknesses of Russia’s economy:
GDP
8,1
7,7
6,4
5 2,0
2008
3,1
5,6
2,9
0,9
2,1
0,2
1,1
0
-5
EU-27
Russia
-10
-7,9
2005
GDP: + 4,0…4,4% (-7,9% in 2009)
industrial production index: +2,5% (-10,8%)
inflation rate: +7…8% (+8,8%)
permanent investment: +2,5% (-16,2%)
index of real wages: +3,6% (-2,9%)
2006
2007
2008
NTC “Gidrol-Krovlja” ©, Moscow, Russia, 2008
2009
overdependence on commodity production
and exports
low labor productivity
poor infrastructure
excessive regulation of businesses
corruption
weak rule of law
2010F
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The Russian market for roofing and waterproofing materials:
what lies ahead?
Permanent investment
%, p.a.growth
30
20
10
3,6
21,1
16,7
10,9
6,2
9,1
5,5
0,9 2,5
0,0
0
-1,9
-10
-20
-16,2
2005
2006
2007
2009
2010F
Russia
5,1
10
%, p.a. growth
EU27
2008
Industry production index
5
4,9
6,8
6,3
1,5
4,1
2,7
0,6
0
-1,9
-5
-10
-9,3
-15
-14,8
2005
Percentage change compared to the previous year, work.day adj.
(sources: Eurostat, Rosstat)
NTC “Gidrol-Krovlja” ©, Moscow, Russia, 2008
2006
2007
EU-27
2008
2009
2010F
Russia
4
The Russian market for roofing and waterproofing materials:
what lies ahead?
18,1
TOTAL CONSTRUCTION OUTPUT
18,2
12,8
13,2
10
1,8
3,6
2,1
0
-3,1
-10
EU27
-4,4
-1,0
-8,7
Russia
-16,0
-20
2005
2006
2007
2008
2009
2010F
Percentage change compared to the previous year, work.day adj.
(sources: Rosstat, Eurostat, Euroconstract, FMI Corp.)
20
9,5
3,8
10
%, QoQ growth
%, p.a. growth
20
-0,1
0
-10
-3,2
-7,3
-20
-9
-8,8
-10,7
-19,3
-19,3
-6,4
-17,2
-7,6
-8,1
-10,7
-30
Q3-08
Q4-08
EU27 - total
Q1-09
Q2-09
Russia - total
Q3-09
Q4-09
EU27 - building
Q1-10
Q2-10
Russia - building
Percentage change compared with the same quarter of the previous year, work.day adj.
(sources: Rosstat, Eurostat)
NTC “Gidrol-Krovlja” ©, Moscow, Russia, 2008
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The Russian market for roofing and waterproofing materials:
what lies ahead?
CONSTRUCTION MATERIALS: PRODUCTION and PRICES
PRICE INDEX
80
CONSTRUCTION MATERIALS – TOTAL:
production index
%
60
М12-09
М11-09
М10-09
М9-09
М8-09
М7-09
М6-09
М5-09
М4-09
М3-09
М2-09
М1-09
50,4
54,3
48,9
38,2
20
22,0
0
2005
2006
inflation rate
-15
54,4
32,0
40
-5
61,2
56,0
2007
2008
construction
2009
construction materials
-11,1
Changes of end-of-period index, 2005=100%, versus prior period , producer price (source:
Rosstat)
-25
-23,5
-35
Russia
EU-27
120
108,9
90
Percentage change compared with the same month of
the previous year, 2005=100%, work. day adj.,
(sources: Rosstat, Eurostat)
30
0
61,2
56,0
60
67,3
19,0
64,1
43,4
2006
2007
58,5
64,7
55,8
35,2
27,7
18,0 19,0 20,0
48,9
2008
2009
reinforced and precast concrete products
cement
rolls roofing&waterproofing materials
all construction
materials
NTC “Gidrol-Krovlja” ©, Moscow, Russia, 2008
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The Russian market for roofing and waterproofing materials:
what lies ahead?
ROOFING AND WATERPROOFING MATERIALS: PRODUCTION
9,7
5,8
5
%, p.a.growth
In 2009:
ANNUAL OUTPUT
output
of
waterproofing
materials
declined dramatically by about 20%

-1,3
-5
the number of enterprises decreased by a
third

-15
-20,0
-25
2006
2007
2008
2009

capacity utilization rate fell by 17%
Percentage change compared to the previous year, exclud. underlayment felts (sources:
Rosstat, Russian Union of Industrialists and Entrepreneurs, NTC”Gidrol-Krovlja”)
61,8
%, QoQ growth
60
30
26,4
27,1
QUARTERLY OUTPUT
40,6
25,0
11,1
AVERAGE PERCENT UTILIZATION OF
CAPACITY
18,3
9,4
80%
0
60%
-30
-18,5
-60
-12,4
-24,1
-11,7
-32,6
43,9%
46,7%
2005
2006
51,8%
57,8%
40,2%
40%
20%
-69,8
-90
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2
2007
2008
2009
2010
0%
2007
2008
2009
Percentage change compared with the same quarter of the previous year,
exclud. underlayment felts (source: Rosstat)
NTC “Gidrol-Krovlja” ©, Moscow, Russia, 2008
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The Russian market for roofing and waterproofing materials:
what lies ahead?
ROOFING AND WATERPROOFING MATERIALS:
PRICES
PRODUCER PRICE INDEX
for the different price brackets
PRODUCER and CONSUMER PRICES INDEX
65,6
%, p.a.growth
25
80
60
20
15
50,4
10
5
21,9
0
40
20
%, change in the index
30
0
2006
2007
2008
2009
producer price, YoY
consumer price, YoY
producer price index
consumer price index
inflation rate
Percentage changes of end-of-period index and growth compared with prior year,
2005=100%, (source: Rosstat)
NTC “Gidrol-Krovlja” ©, Moscow, Russia, 2008
24,3
25
24,1
20
15
10,1
10
5
8,0
0
M7-09
M9-09
high
M2-10
high-mid
M4-09
low-mid
M6-10
low
Percentage changes of end-of-period index, June 2009=100%,
(source: Rosstat)
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The Russian market for roofing and waterproofing materials:
what lies ahead?
EXPORTS
Kazakhstan
37%
the
Transcaucasian
countries 7%
Moldova 5%
In 2009:
the Central
Asian countries
8%
• export volume amounted to 58,6 mln.sq.m
• compared with 2007, it declined by almost
20%
• the materials were mainly exported to the
former Soviet republics (67% of exports)
Mongolia 5%
others 1%
Ukraine 9%
EU-27 28%
Sweden
11%
Share of exports,%
(source: Rosstat)
Finland
10%
Bulgaria
9%
Slovakia
4%
others
5%
Poland
22%
the Baltic
countries
39%
NTC “Gidrol-Krovlja” ©, Moscow, Russia, 2008
9
The Russian market for roofing and waterproofing materials:
what lies ahead?
IMPORTS
mln.sq.m
2,0
In 2009:
1,99
• imports total amounted to 4,9 mln sq.m
(1,2% of domestic consumption)
1,5
0,85
1,0
0,5
0,51
0,02
0,12
0,38 0,34
0,16 0,11
0,37
bituminous
others
France
Italy
China
Norway
Finland
Switzerland
Germany
0,0
• compared with 2007, imports declined by
40%
• share of single ply membranes in imports
exceeded 75%
• the main supplier of bituminous materials
was Finland, polymer materials – Germany
and Switzerland
polymer membranes
NTC “Gidrol-Krovlja” ©, Moscow, Russia, 2008
10
The Russian market for roofing and waterproofing materials:
what lies ahead?
MARKET SIZE
CHANGE OF MARKET FOR ROLL ROOFING AND WATERPROOFING MATERIALS
in RUSSIA in 2005-2009 (excl. underlayment films)
in mln. sq.m
2005
2006
2007
2008
2009
production
494
523
574
567
454
exports
57,1
65,2
73,2
69,0
58,6
imports
11,1
8,6
12,0
11,3
4,9
apparent domestic consumption
448
467
513
509
400
CHANGE OF APPARENT DOMESTIC CONSUMPTION
100%
%, p.a.growth
20%
10%
CHANGE IN PRICE BRACKETS STRUCTURE
9,9%
80%
4,1%
40%
-21,5%
-20%
-30%
2008
2009
Percentage change compared to the previous year (exclud. underlayment felts)
NTC “Gidrol-Krovlja” ©, Moscow, Russia, 2008
7
20
18
65
55
high
highmid
63
66
lowmid
low
20%
0%
2007
8
60%
0%
2006
15
21
19
-0,7%
-10%
10
10
5
10
9
2007
2008
Q1-Q2
2009
Q3-Q4
2009
Shares of the different price brackets
(in production; exclud. underlayment felts & organic felts for BUR)
11
The Russian market for roofing and waterproofing materials:
what lies ahead?
SINGLE PLY POLYMER MEMBRANES MARKET
DOMESTIC CONSUMPTION
10,7
10,5
12,0
mln.sq.m
10,0
7,3
8,0
6,5
6,2
7,8
6,8
6,0
4,0
CONSUMPTION OF MATERIALS BY POLYMER
TYPES (2009)
2,0
0,0
2006
2007
2008
2009
2010F
2011F
1%
2012F
2%
DOMESTIC PRODUCTION (mln.sq.m)
and SHARE OF IMPORTS (%)
98,0%
98,2%
95,5%
8%
2,9
89%
54,0%
0,1
0,2
2006
2007
domestic production
NTC “Gidrol-Krovlja” ©, Moscow, Russia, 2008
TPO
EPDM
PVC
others
0,5
2008
2009
share of imports
12
The Russian market for roofing and waterproofing materials:
what lies ahead?
PRODUCTION AND COMPSUNTION OF
WATERPROOFING MATERIALS (in mln.sq.m)
(Ministry of economy development, June 2010)
INITIAL FORECAST
600
500
400
GOVERNMENT’S SCENARIO FOR THE RUSSIAN
ECONOMY DEVELOPMENT FOR 2010-2013
556
538
510
584
454
450
400
471
482
503
300
2009
2010
production
600
2011
2012
2013
apparent domestic consumption
Growth, %
YoY
2009
2010
2011
2012
2013
Annual
average oil
"Urals" price,
USD/barr.
61,1
75
75
78
79
GDP growth
92,1
104
103,4
(104,2)
103,5
(103,9)
104,2
(104,5)
Industry
production
89,2
102,7
(107,6)
103,2
(103,9)
103,1
(103,8)
104,2
(104,9)
Capital
invesments
83,8
102,9
(102,5)
108,8
(110,1)
106,3
(103,5)
108,1
(107,4)
Real wages
97,2
103,6
102,5
102,4
103,1
The values in parentheses are the corrected forecast
made in September, 2010
CORRECTED FORECAST
500
558
508
400
454
400
465
405
486
419
434
478
300
2009
2010
2011
NTC “Gidrol-Krovlja” ©, Moscow, Russia, 2008
2012
2013
13
The Russian market for roofing and waterproofing materials:
what lies ahead?
Thank you for the attention
NTC “Gidrol-Krovlja” ©, Moscow, Russia, 2008
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