The Russian glass market reacts to the crisis with enlargements

In 2021, the flat glass market will grow by 7-8% due to the strengthening of the positions of the largest players, but this will not solve the accumulated problems and will not eliminate the emergence of new ones.

In 2021, 11 factories producing flat glass are operating in Russia. All of them are located in the European part of the country: four plants in the center, five in the Volga region and two in the south. Behind the Ural ridge and in Siberia there are no glass production facilities, and the North-Western District is still doing without its own glass.

The Russian glass market has been actively growing for more than fifteen years, but in the last three to four years, glass production has begun to decline. Apparently, in 2017-2018. the market has reached a turning point. After 2017, when the historically maximum volume of sheet glass was produced - 258 million sq. m, - the demand for glass began to decline, and the industry was going through difficult times, but for two years in a row it held out without any particular shocks. In 2018, production decreased by 5.7%; in 2019, output remained at the previous level. But in 2020, according to a study by the ABARUS Market Research agency, output fell immediately by 7.3% - this is the largest drop in production for the entire period under review.

It turns out that for a long time the market held back a lot of accumulated problems, but the coronavirus pandemic was the last straw and provoked a collapse. Several businesses were on the verge of bankruptcy, others were mired in debt. One of the major problem assets was saved - the Caspian sheet glass plant was bought out by the Salavatsteklo group, thanks to which the holding can increase its share from 20-21% to 27-28%. Thus, the Salavatsteklo group, which now calls itself the market leader, will bypass AGC holding (whose share is 26%) in 2021 and will take first place. The third remains the Guardian group, whose market share in 2021 is close to 20%.

The acute phase of the crisis is probably over. Housing construction, the main consumer of flat glass, is actively supported by the state. Thanks to all this, in the second half of 2020 and in 2021, glass production began to recover. As a result, market players believe that the bottom of the crisis has been passed, and growth is expected again in 2021 - about 7-8% more than in the troubled 2020.

However, internal problems have not yet been resolved, and in addition, the external economic situation may also become more complicated. Nowadays, Russian glass production is largely exported. Some factories export up to 50% of their production volumes abroad. A sharp jump in exports took place in 2013: Russian glass went in large quantities to Kazakhstan, Belarus, Uzbekistan, Tajikistan, as well as to Ukraine (the only glass factory was closed there). Until 2017, exports grew continuously until they reached the maximum level - 66 million sq. m. But after 2017, a period of recession begins.

In 2018-2019 deliveries to Belarus, Ukraine, Kazakhstan, Uzbekistan are still growing, but exports to European countries began to decline noticeably. In “covid” 2020, exports rose again, but it is not known how long. The main alarming trend is that in the coming years, export directions to the CIS countries may be curtailed. First of all, due to the commissioning of the long-awaited Kazakh plant near Kyzylorda. If it is finally launched in 2021, then the republic will no longer need to purchase Russian glass for many years. In addition, Kazakhstan will be able to supply its glass to neighboring countries, and thereby take away Asian sales markets from the Russian Federation.

Source: https://marketing.rbc.ru/