Construction chemicals market in Russia set to grow in 2011 - February 2011

The construction industry was one of the first to experience the adverse effects of a flagging economy. Numerous major construction projects were suspended. Non-performing loans in the banking system and the inability of private construction companies to access funding led many of them to bankruptcy. According to data from the Federal State Statistics Service, the gross value of the construction industry in 2009 was reduced by 13.2%, in stark contrast to the healthy growth rate of 12.8% in 2008. The total floor space of apartments completed in 2009 was 59.9 million m², 7% less than the figure a year before. In 2010, residential construction declined by a further 3%, to 58.1 million m².

The production of construction chemicals in Russia, driven by a booming construction industry, was growing strongly at an average annual rate of 25% between 2005 and 2008, registering 5.7 million tonnes in total in 2008. Imports of construction chemicals have also noticeably been replaced by locally produced products. Foreign companies have been investing in local production capabilities and capacities during this period, thus reducing dependency on imports to around 10% of overall consumption.