Russia's Aluminium Product Manufacturers Have Nothing to Fear from Accession to the WTO, Assures Frost & Sullivan

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Russia's Aluminium Product Manufacturers Have Nothing to Fear from Accession to the WTO, Assures Frost & Sullivan

PR Newswire LONDON, Dec. 6, 2012

- Benefits will include access to a wider range of export opportunities

LONDON,Dec. 6, 2012/PRNewswire/ -- The application range for aluminium products is steadily expanding. To address changing end-user needs and survive intense competition, manufacturers are modernising their production facilities and broadening their product portfolios. In Russia, manufacturers have the added challenge of dealing with the country's accession to the World Trade Organisation (WTO).

New analysis from Frost & Sullivan (http://www.industrialautomation.frost.com),Analysis of Russian Aluminium Products Market, finds that the market generated 858,000 tonnes in 2011 and estimates this to reach 1,144,000 tonnes in 2016.

Two distinct categories – standardised and customised – comprise the Russian aluminium products market.

"The market for massive, standardised production is currently dominated by the three largest producers, Alcoa Inc. (including CJSC Alcoa SMZ (Alcoa SMZ) and CJSC Alcoa Metallurg Rus (Alcoa MR)), OJSC Kamensk-Uralsky Metallurgical Plant (KUMZ) and Krasnoyarsk Metallurgical Plant Ltd. (KRAMZ)," noted Frost & Sullivan Industry Analyst Monika Fechner. "On the other hand, the market has numerous smaller, specialised companies that manufacture higher, value-added products such as aluminium profiles, siding, or roofing."

Some end-users require standardised aluminium products. These, for example, might include foils used in the packaging industry or wires and cables used in the electronics industry.

In contrast, the construction industry with its diverse needs requires a high degree of customisation. Aluminium product manufacturers, therefore, have to find their own specialisations in order to develop their business.

However, fluctuating energy and aluminium prices pose a challenge to market participants.Russia has accessed the WTO in 2012 and increasing competition from imports is further challenging domestic companies.

"Local aluminium product companies are afraid that Russian accession to WTO will squeeze their share in the domestic market, due to the influx of more competitors and fiercer competition," explained Fechner. "O n the other hand, Russian companies which currently export only around 10 to 20 per cent of their production, mostly to other CIS countries, Asia and the Middle East, stand to gain access to a wider range of export opportunities."

Moreover, the rouble is expected to depreciate along with increased exports, making Russian products cheaper and more attractive to foreign end-users. After WTO accession, Russian manufacturers are also likely to spend less on imported foreign equipment, thereby reducing their operational costs.

If you are interested in more information on this study, please send an e-mail with your contact details to Julia Nikishkina, Corporate Communications, at [e-mail].

Analysis of Russian Aluminium Products Marketis part of theIndustrial Automation & Process Control Growth Partnership Services programme, which also includes research in the following markets: RussianDiamond Market, Russian Platinum Group Metals (PGM) Market and Russian Tubes and Pipes Market. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

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