Belarus may face cement shortage due to project delays

Belarus may face cement shortage due to project delays
Published: 20 June 2011

Belarus may face a shortage of cement in the coming years due to a delay in the fulfillment of contractual obligations by Chinese CITIC Group Corporation, a state-owned investment company, who signed an agreement with the Belarus government a few years ago to modernise the country’s production base by building new lines.  The total value of the contract is estimated at more than US$1.3bn.

New production facilities are set to be launched at two of Belarus’ largest cement facilities – Krichevcementnoshifer and Belarusian Cement Plant – with the aim of increasing production to over 9.1Mta. However, according to representatives from Belarus’ Ministry of Architecture and Construction however, the scheduled commissioning of new capacities is in jeopardy due to the "low qualification of Chinese experts, provided by CITIC Group”. Meanwhile, Alexander Jacobson, chairman of the Belarusian State Control, noted that construction work is only 40 per cent complete.

Total cement production in Belarus is currently estimated at 4.5Mta while domestic demand is around 6.5Mt. According to initial state plans, the launch of the new lines should should increase production by 5.5Mta by 2012.

The contract with the CITIC Group was signed in 2008. At the same time, several other companies were cited as potential investors including Russia’s Eurocement and Siberian Cement as well as Inteko. Local businessmen, the Samawi brothers, also expressed an interest in investing funds in the Belarussian cement industry.

The local cement market has also attracted interest from global cement majors including HeidelbergCement and Lafarge. The latter considered the acquisition of Krasnoselskstroymaterialy in the late 1990s and HeidelbergCement was also ready to invest in Belarus at one point, however, neither deals came to fruition.