Modern trends in the development of the glass industry in the Russian Federation

In 2018-2019 the export of flat glass from Russia fell due to a decrease in demand in European countries. But in 2020, exports to the CIS countries will begin to decline, as their own factories are opening there.

Currently, there are 20 glass factories in the CIS countries that produce primary sheet glass. Of these, 15 have float installations, the rest operate using the vertical pulling or rolling method. Through the efforts of these plants in the CIS, about 330 million sq. m of sheet glass. The overwhelming majority of products (over 90%) are produced in two countries - in Russia and Belarus (Gomelglass). Previously, about 8-9% of the production was in Ukraine, where the Lisichansk glass plant worked, but now it is closed.

New problems that arose in the first half of 2020 due to the spread of coronavirus infection around the world forced the governments of many states to declare quarantine regimes and impose restrictions, and therefore the demand for glass in both the primary and secondary markets decreased. The reduction was temporary, it mainly appeared in April-June, but it will not do without consequences. Thus, we can expect a decrease in glass production in 2020 by 9-10%.

A turning point has come in the Russian glass market. Until March 2020, most of the factories (except for problematic ones) were operating normally. But then the coronavirus entered the country, and a long-term self-isolation regime was introduced. Because of this, in April the production of flat glass fell by 50% compared to March and by 60% compared to April last year. In May-August, production returned to growth, but it will hardly be possible to compensate for the decline by the end of the year. Experts from ABARUS Market Research predict that in 2020 the production of flat glass will fall by at least 10%. This will be the first significant drop in 15 years. Several businesses are on the verge of bankruptcy and are dealing with debt.

But the CIS glass market is rich in positive news. In 2020, new players enter the market, the introduction of which was planned much earlier than the current crisis could have been predicted - a plant has already been built in Turkmenistan, and a long-awaited Kazakh plant will open near the city of Kyzylorda in the near future.

On the whole, this situation creates a difficult situation for Russia. The presence of excess capacity in the country became apparent after 2014, but it was the active export that kept Russian glass factories afloat. In 2018-2019 this advantage began to fade - exports declined annually and returned to the 2015 level. The most stable supplies were to the CIS countries.

Now, in conditions of economic constraints, most of the CIS countries are fully provided with glass, both their own and imported. Therefore, the growth in demand in the near future is likely to be moderately positive. And now, when export to Turkmenistan and Kazakhstan from Russia is about to lose its relevance, domestic glaziers will have to reorient themselves to sending glass to other countries.

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