Russian govt to take action against monopoly in building materials industry

Russian govt to take action against monopoly in building materials industry
Published: 31 October 2007

The state council for the implementation of priority national projects has exposed signs of monopolism in the sphere of building materials production, according to local press reports.

“There are instances of monopolisation in the industry and adequate measures are to be taken,” the chairman of the commission for the market of affordable housing under the state council, Alexander Braverman said on Tuesday.

“There is the Eurocement company, which takes the commanding position. At a certain moment in the past it concluded an agreement with the Federal Anti-monopoly Service (FAS). Time is ripe to look into how this agreement is being implemented and to take proper action,” he said.

The government will consider the possibility of introducing short-term measures allowing for the reduction of customs duties on the import of cement during certain seasons.

“Such a short-term measure will allow for eliminating shortages at a time when they are most likely and to live through this period until we have eliminated monopolism in this market,” Braverman said.

As far as the export of cement is concerned (which currently stands at 3.5Mta, while production ranges 54-55Mt) the government may consider the possibility of raising the customs duty on the export of cement.

“In principle, there is such a measure on the list of customs control measures, and we shall consider it,” he said.

Braverman also promised that the Russian government will ask natural monopolies to speed up the connection of building materials manufacturing companies to electric power and gas distribution networks, as well as the creation of infrastructures linking them to railways.

Also, he believes that natural monopolies must have clear action plans for cooperation with investors, which will help considerably reduce the costs of obtaining connection to distribution networks.