It has been announced that HeidelbergCement will build a new cement plant in Volsk (Saratov oblast) Russia. Deutsche Bank has apparently acted for the group and is said to be involved as part-guarantor of this project. The plans call for setting up a state of the art production facility of about 1.5Mta. HeidelbergCement promises to create new jobs workplaces and to pay high wages to the local workforce many of whom currently work for the competition.
The town of Volsk is situated on right bank of the Volga. The new production facilities will be built on the site of the existing asbestos-cement product plant set up as far back as 1913 (and later renamed Kommunar). The basic process equipment of this elderly plant includes two 3.6 x 60m kilns with a capacity of 13tph each. The cement production capacity of the plant is 0.2Mta. It has never been revamped and is very much run-down. However, the attractiveness of this plant lies in the fact that it owns a quarry with large deposits of high quality limestone/chalk.
Some 2km from the Kommunar plant is a 2.5Mta wet cement plant, the profitable Volsk-Cement, owned by Holcim. The new plant is currently reviewing opportunities to upgrade the plant to a 2Mta dry-process line and has, over recent years, developed some lucrative markets along the Volga as well as shipping cement into neighbouring countries.
To make things worse, competitively speaking, in this same locality there is yet another cement-producing facility – Zhigulevskie Stroitelnye Materialy. However its site - the plant is built on a hill and thus cannot be expanded - plus the fact that the plant sits close to a local nature reserve and comes under increasing scutiny from the environmental watchgogs.
With Volsk-Cement supplying its cement to the area adjoining the Zhigulevskie Stroitelnye Materialy plant, and eating into its traditional market, the fate of this plant hangs in the balance, although it has access to some nearby good quality limestone reserves.
What will happen when HeidelbergCement’s new Kommunar plant starts producing cement that most probably will enter the regional market at prices cheaper than that of Volsk-Cement? Will Volsk now build a new 2Mta dry line too counter this competitive threat from HeidelbergCement?
Will HeidelbergCement also activate the Tersinskoe deposits with good clay and excellent limestone, which are only 5km away from the plant as a main raw material source? And not least, what are they going to do with the local farming community, many of whom have traditionally grown crops on the proposed quarry sites. As yet, more questions than answers.