Kazakhstan: struggling economy hits cement industry

With a slump in oil prices, geopolitical tension between Russia and the West, and a slowdown in the Chinese economy, Kazakhstan’s GDP grew just 0.1 per cent YoY in 1H16. Following the decision of the central bank to partly float the currency, the tenge has fallen from KZT140 to the US$ to KZT340 over the past 30 months.

Despite these struggles, construction activity is frenetic in Astana, the country’s capital. US$2bn of government infrastructure projects are underway for Astana Expo 2017. However, the economic downturn has hit the cement sector in spite of ongoing construction projects. Consumption had grown 15-30 per cent YoY over the past decade, falling only once in 2009, but it is now expected to experience a decline YoY. Javier del Ser, CEO of Steppe Cement: "We anticipate cement demand nationwide to decline by up to five per cent YoY this year, from two per cent growth last year."