Restructuring Moscow’s precast concrete industry

The 2018 FIFA World Cup in Russia has just ended, and yet Moscow is already seeing the beginning of a new development phase. More precisely, it is a restructuring phase: at Bauma CTT Russia 2018, which took place from June 5 to 8 at the Crocus Expo IEC exhibition cen-ter in the north of the Russian capital city, one could learn that construction companies such as the LSR Group are offering complete precast concrete plants for sale again, or that plants have already changed owners, such as the Morton plant near Moscow (cf. BFT International 08/2014, p. 36, 07/2015, p. 14, 03/2017, p. 34), and are now being restructured, some of them to a very far-reaching extent.

“The goal was to squeeze precast concrete production for as much profit as possible in the rel-atively short time window that had opened up,” said the sales representative of an internation-ally successful plant manufacturer, analyzing the situation in a discussion with the editorial team of the BFT International trade magazine. That was the reason why, in recent years, nu-merous plants located in the Moscow area were either newly built or equipped with entirely new plant technology. After the mega event, there are now overcapacities; the plants are to be restructured, if possible, to offer a different product portfolio that reflects the new market sit-uation. In some cases, plants are resold after the relatively short period of use. In other cases, new plant technology needs to be purchased.

More Russians, more Chinese

This fits in with the fact that representatives of consulting firms were visiting in large numbers at this year’s trade show. The consulting firms usually represent an alliance of several machine manufacturers, and thus often the entire range of plants required for precast concrete produc-tion – from mixers all the way to packaging machines; it goes without saying that the concept for the entire plant, or for the restructuring and repositioning process, is part of the offer.

Another trend of recent years has continued and can be read off from the exhibitor details of Bauma CTT Russia 2018: of the total number of 586 exhibiting companies, the majority was from Russia and China, followed by Germany, Italy and then Turkey.

This shift in the exhibitor numbers is in line with the perception of the exhibitors themselves who, when talking to the editorial team of the BFT International trade magazine, unanimously agreed that there were more Russian, Chinese and Turkish exhibitors at the trade show. Many of them credibly stated that this was not a problem for them in their quality and price seg-ments. However, some Western European manufacturers also admitted that Russian manufac-turers were stepping up their efforts and that the competitive pressure was increasing, especial-ly for easier-to-copy products.

This situation is exacerbated still further by the fact that the Russian manufacturers of precast concrete elements have hardly any access to the international capital market, and loans from Russian banks are unattractive because of the often horrendous interest rates. This results in an increased demand for the relatively cheap products from domestic manufacturers.

Almost 23,000 visitors

Even after the takeover of CTT by Messe München International and the change of name, Bauma CTT Russia continues to be the largest show of plants and machines for the construc-tion industry in the former Commonwealth of Independent States (CIS). According to organ-izer Messe München, the exhibition space inside and in front of the halls totals 60,000 m². Nevertheless, it cannot be denied that the outdoor area has shrunk significantly in recent years.

According to Messe München, the exhibitor and visitor numbers continue to be high and in-creased by 4% and even 10%, respectively, compared to the previous year. In total, the organ-izers counted 22,681 industry visitors coming to the Crocus Expo site on the four days of the trade show.

The organizers improved the attractiveness of the trade show by installing an outdoor demon-stration space that allowed manufacturers to present their site vehicles in a live demonstration. In addition, a conference was held on the “Construction equipment industry in transfor-mation: drivers of success”. The participants discussed, among other things, the current devel-opments in the Russian market for construction machinery.

The next Bauma CTT Russia will take place at the same venue from June 4 to 7, 2019.

Text: Christian Jahn, M. A.


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