said Oleg Dorin of Saint-Gobain. - CCIFR

More documents

Recommendations

Info

22 RUSSIA–FRANCE A Saint-Gobain factory producing construction materials in Cognac, France. The company opened one of two factories in the Nizhny Novgorod region in 2006. solvency of Russian consumers, Baranov said. The situation in construction sector is far from stable: Since the beginning of the year, the industry has shown both positive and negative indicators. In March of this year, according to the state statistics service, the volume of residential housing made up 4 million square meters, which is 13.5 percent higher than in February of last year. But in February of this year, the result was much worse, as residential housing declined by 6.1 percent. “These seesaw movements exert a significant influence on the market for construction materials and don't allow companies to count on confident growth in the market or, consequently, on the growth of their own financial indicators,“ Baranov said. “Manufacturers also have the opportunity to increase their output thanks to the secondary market, which is the market for housing renovations, individual residential construction and construction of dachas,” he said. 800 700 600 500 400 300 200 100 “These tendencies can be explained by the fact that the population has experienced an improvement in its financial situation, there is a stability in income, a possibility to plan for the future, and so citizens can direct a part of their income to renovate their homes, and also to build houses and dachas,“ he added. “These types of work will require construction mixtures, among other supplies. And this growth can contribute to a growth of this segment by 5 percent to 9 percent per year,” Baranov said. FRENCH PLASTER OF PARIS This year, Saint-Gobain will begin construction in the Pavlovsk area of its second large factory in the Nizhny Novgorod region. It will produce drywall panels. Currently, this project is in the final planning stages, Thierry Fournier, the general director of Saint-Gobain Construction Material Rus, told Vedomosti in November 2010. According to Fournier, the company bought more than 10 hectares at the end of 2009 for Return Investors Net volume of foreign investments in the Nizhny Novgorod region (2005 -2010) $ MLN 2005 2006 2007 2008 2009 2010 SOURCE: Nizhny Novgorod region administration future development, and construction of the project is slated to begin in 2012. In June 2007, Jean Laronza, president of Saint-Gobain for Poland, Russia and Ukraine, promised to begin, in the second half of 2008, the construction of a factory with a capacity of 30 million square meters of drywall per year. Investments into the project would have totaled 2.9 billion rubles ($103 million), and costs would have been recouped in six years to nine years. The drywall was to be sold in the Nizhny Novgorod region and the surrounding regions. “All the parameters remain the same,” the company's press service said about the planned factory. “Saint-Gobain has adjusted its strategy due to the crisis on the market for construction material in Russia,“ Fournier said when explaining the delay. “Now, the crisis has changed direction.” According to a manager of one of Nizhny Novgorod’s construction companies, Saint-Gobain will begin processing gypsum at the Gomzovsky deposits in the Pavlovsk area of the city, extracting approximately 30,000 tons a year. According to Vladimir Volkov, general director of Stroiinvest Nizhny Novgorod, demand for drywall in the region fell 70 percent in the last two years, but in the future it will grow 30 percent a year. “The market in Russia will grow 15 to 20 percent a year in the foreseeable future,” said Volkov, manager of Volma, a producer of drywall in Volgograd. Drywall panels will continue to grow in popularity because right now the majority of residential buildings are delivered with an open PIERRE-ALAIN DORANGE / WIKIMEDIA COMMONS floor plan, said Safonov from Investkafe. “Drywall is a relatively new material for the Russian market, and without a question it has strong potential for growth,“ Baranov said. “It is already considered one of the most popular construction materials in Russia.” According to data provided by Knauf, one of Russia’s largest producers of drywall paneling, this material has numerous benefits. It has the ability to “breathe,” which means that it can take in excess moisture from the air and give it off when the air is dry; it is easy to install; “wet” processes are not needed during finishing; and it allows for the realization of the most varied types of architectural and design solutions, including creating curved surfaces. In addition, drywall is not only ecological but also provides a comfortable temperature indoors; it cuts construction costs by making the wall hanging faster; and it increases labor efficiency. Demand for drywall panels in the next few years will grow by 4 percent to 9 percent a year, Baranov said. FRENCH ROOF Fellow French investor Onduline, one of the largest world producers of construction material, launched its first Russian factory for producing wavy roofing sheets in Nizhny Novgorod in 2008, said Natalya Khoroshkova, manager of the marketing department at Onduline Construction Material. That’s the Russian daughter company of the French company. “We chose Nizhny Novgorod because of its convenient geographical location,“ Khoroshkova said. “It is not far from Moscow, on the intersection of major highways, which is very convenient for delivering our product to other parts of Russia.“ The factory’s capacity is 7.5 million sheets per year. The company has began construction of factory in February 2006, Onduline deputy general director Andrei Nezhkin previously told Vedomosti. The factory is located on an area of more than 10 hectares on the territory of Gorky Automobile Plant (GAZ). According to Nezhkin, the volume of investment in the project is $20 million of company money and borrowed funds. ‘We chose Nizhny Novgorod because … it isn’t far from Moscow, at the intersection of major highways,’ said Natalya Khoroshkova of Onduline. The company gets the bitumen and organic raw material that is necessary for production from Nizhny Novgorod and other Russian markets. Using cheap local raw materials and work force, as well as cutting back on costs on logistics and customs payments allows the company to significantly lower production costs, an Onduline employee said. “This material is ecologically clean, does not contain any health-harming asbestos, has a neutral color, and is very easy to install,“ said an employee of the marketing department of a Russian company that produces fiber-cement. But, at the same time, he said Onduline’s roofing products are less economical than regular slate and some forms of shingles in large construction projects. “Onduline’s main market remains the construction of individual homes,” he said. FUTURE PROSPECTS “Foreign investors, including French companies, will continue to actively invest in the creation of manufacturing in the Nizhny Novgorod region due to positive outlooks for demand of their products in the future, especially since local officials are actively working to create a comfortable investment climate in the region,” Timofeyev said.
Eighty percent of residential buildings are delivered without finished interiors, industry members said, which promotes the sale of construction materials to consumers. “There is a clear mechanism in place in the Nizhny Novgorod region for making decisions on investment projects,“ said the press office of the government in the Nizhny Novgorod region. Introducing its 'One Window' system for investors allowed it to reduce waiting periods for decisions and time filling out paperwork from about 1 1/2 to two years to only three months, it said. Within the framework of a meeting of the governor's investment board, the board members agree on the spot whether to accept or deny an investment project. Because of regulations that are in place, the region’s authorities narrow its field to a simple informal relationship between investors and authorities, which is much better, and very different from the way business is done in Russia’s other regions. The region has legislatively strengthened its system of benefits and guarantees for projects that are a priority for the region.“ As a result, the amount of foreign investments continue to grow in the region, investment in fixed capital has increased more than three times in the past few years, and the volume of saved investments increased in 2010 to 1.5 trillion rubles ($53 billion). To date, 4,500 investment projects have been approved, and 62 projects received the status of high priority, which gives investors correspondingly preferential treatment, COMPANY STATS Onduline - Construction Material (Nizhny Novgorod) Manufacturer of roofing sheets Owner: French manufacturer of roofing materials Onduline SA (100 percent) Financial results (company information for 2009): Revenue: 1.22 billion rubles ($43 million) Net profit: 311.1 million rubles ($11 million) MAXIM STULOV / VEDOMOSTI according to a prepared statement by the press office. “If businessmen in the West are turned off by the political climate, people who are acquainted with the Russian economy in practice are more concerned by the creditworthiness of partners and corruption in government agencies,” said Nikolai Solabuto, asset manager for the holding company of the brokerage firm BKC. Solabuto said the first main risk for business in Russia is credit risks and those risks related to the credit worthiness of partners. In second place are market or competitive risks (simply put, businessmen are concerned about strong direct competition from rival companies). In third place are regulatory risks related to the legal framework. In fourth place are currency risks and liquidity risks, followed by concern over corruption in the government. However, all of these risks in practice have not stopped the inflow of foreign investments to promising projects in Russia’s growing economy. This trend, according to experts, will be relevant in the foreseeable future, as well. Saint-Gobain Construction Material Rus Manufacturer of construction materials (drywall mixtures, drywall panels and isolating materials). Co-owners: French Saint-Gobain (87.4 percent), EBRR (12.6 percent) Financial results (company information for 2009): Revenue: 3.4 billion rubles ($121 million) Net profit: 156.5 million rubles ($5.6 million) 23
Page 3 and 4: Dear friends, For the second time i
Page 6: 6 RUSSIA-FRANCE L’Oreal Adds a Fr
Page 9 and 10: Winning the Gallic Car Wars in Russ
Page 11 and 12: class cars with a price starting at
Page 13 and 14: Jean de Gliniasty, France's ambassa
Page 15: BLOOMBERG A crane towering over a V
Page 19 and 20: By Federal District Marine Travel M
Page 21: struction materials sold in Russia.
Page 25 and 26: have since signaled that they may t
Page 28 and 29: 28 28 RUSSIA-FRANCE their expenses,
Page 30: 30 RUSSIA-FRANCE In addition to the

said Oleg Dorin of Saint-Gobain. - CCIFR

Create successful ePaper yourself

Delete template?

Save as template?