Russian chemical companies to invest more into plants
Chemical industry remains as an essential pillar of the Russian economy. Ministry of industry and trade expects the branch to grow for at least 4%. Only in autumn the production of the chemical branch had a 5,3% increase, significantly exceeding the overall industry indicator at 1,3%. On top of that, a lot of new projects are being planned or worked on. All in all, the situation looks quite promising for German companies specialized in constructing chemical plants.
Chemical companies resident in Russia actually gain double benefit: from the slightly improving domestic economy as well as from the weakened ruble, which allows them to offer low export prices. Chemical imports however have become more expensive. As a result, foreign suppliers have slowly but surely lost their market shares to the local competitors.
It won’t be long before even more modernizations and capacity increases start to come. Thankfully only a few raw materials for the chemical industry in Russia have high import dependency, mostly some intermediate products such as active substances for the pharmaceutical industry or pigments for the production of paints and lacquers.
Foreign investment in the Russian economy is expected to increase in the medium term. Weak ruble, huge domestic market and sufficient supply of raw materials and energy sources are not the only reasons for that. Russian policy of import substitution is an important factor as well. In line with this policy, products made in Russia will be preferred at government tenders over foreign ones. Furthermore, public administration tries to support and encourage investors on all possible levels.