Thermal insulation market in Russia contracted by 16% in 2015More information on this topic is presented in the PMR report:
- July 2016
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- Pages: 206
- Forecasts: 2016-2021
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As indicated by the results of PMR’s latest report, entitled “Building materials market in Russia 2016. Development forecasts for 2016-2021”, the thermal insulation materials market saw a reduction of almost 16% in 2015 after a 3.6% growth in 2014. As a result, the market dwindled to around 41 million m³ in 2015.
Until the early 2000s, the Russian thermal insulation market had been almost exclusively dominated by slag, rock and similar mineral wool products mostly because of the near-total lack of use of thermal insulating products in residential construction. During this period, slag wool products were largely used for the insulation of heat-supply pipelines. Fibreglass insulation products had been largely used for the same purpose, although because of the limited production capacities, these products were much less popular. In the early 2000s, about 6-7 million m³ of slag, rock and similar mineral wool products were produced every year, whereas production of fibreglass thermal insulation products came to only about 440,000 m³. Furthermore, according to PMR, at the beginning of the century existing production units for XPS and EPS sheets were limited in number, with a combined annual production capacity of up to 1 million m³.
Over the last decade, Russian companies have launched extensive modernisation initiatives on the market, replacing almost all production machines and equipment which had been in operation until the early 2000s and building new capacities from scratch.
Mineral wool products still lead the thermal insulation market in Russia, with rock and slag wool products being more popular than fibreglass insulation solutions. The smaller share of glass wool insulation owes its origins largely to the more limited domestic production capacity. There are only a handful of manufacturers of fibreglass insulation products in Russia with Knauf, Uralita Group and Saint-Gobain having a market share of more than 90% between them. The country’s leading manufacturer of fibreglass thermal insulation products is Knauf, which has, in Russia, two plants for the manufacture of glass fibre thermal insulation products with a combined capacity of 115,000 tonnes per year.
Despite the fact that the popularity of stone wool products in Russia has increased substantially over the last decade, the production of these products has remained markedly consolidated. The Central Federal District is responsible for almost half of the rock and slag wool products manufactured in the country.
As is the case in the stone wool subgroup, the Central Federal District dominates the production of XPS and EPS, too. Factories located in this district are, between them, responsible for around 45% of the country’s expanded polystyrene output. According to PMR, two manufacturers (Penoplex and Technonicol) are responsible for more than 80% of XPS production in Russia. At the same time, there are more than 100 manufacturers of expanded polystyrene across the country.
Until 2015 there had been observed substantial growth in the consumption of most thermal insulation products. The strong uptrend in consumption had been propelled primarily by extensive residential construction activity and increases in the purchasing power of the population. There has been a significant increase in the amount of housing listed in official records in Russia in recent years, even bettering the all-time annual completion levels recorded in the late 1980s. This was boosted mainly by strong mortgage market growth, increases in household incomes and a shortage of per capita housing space.
The consumption of EPS still substantially exceeds that of extruded polystyrene, but the gap is set to be reduced considerably in the near future. The extensive expansion of the production capacity of XPS in Russia has made possible an increase in the domestic production of this product. Positive GDP growth figures until 2015, substantial growth in residential construction activity and a steady improvement in the purchasing power of the population, have, between them, decisively supported an increase in the popularity of quality rather than quantity. Although thermal insulation solutions based on extruded polystyrene are more expensive than those based on EPS, extruded polystyrene, because of its better insulation properties, has received more praise from the public sector and the public in general. Because of its lightweight nature, imports of XPS are not economically feasible in most cases. The notable expansion in the domestic production capacity of XPS has permitted a considerable reduction in the prices of thermal insulation solutions based on XPS, making them increasingly price competitive with solutions based on expanded polystyrene. It is estimated that consumption of XPS in Russia contracted by 7.3% year on year in 2015, following an almost 3% increase a year earlier. At the same time, consumption of EPS rose by less than 2% in 2014 and was followed by a more striking, 19%, drop in 2015.
More information on this topic is presented in the PMR report:
Building materials market in Russia 2016. Market analysis and development forecasts for 2016-2021