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Dear Colleagues,

Let me introduce the Cement Suppliers and Consumers Association that was founded in the summer of 2008.

I’m often asked – why create a new association today, considering that the market is experiencing considerable price fluctuations that put many cement suppliers to the verge of survival? Sceptics are cynical enough to assume that the Association has just another month or two left of life, since the independent suppliers-importers will have their “oxygen” cut off, and the producers hesitate to join it as they won’t manage to unite with their competitors.

This question already contains the ground for the answer, if not the answer itself. The Association was established by HONEST participants of the market, who are interested in the civilized and STABLE development of the cement industry. These companies are here to work for more than just a day.

Who will benefit, if the Russian market loses its reliable suppliers? Consumers or producers? Neither. Let’s look at the price of the war against the import that broke out at the end of May.

On the one hand, cement consumers may breathe a sigh of relief and enjoy a big number of offers – one better than another. And according to the payment conditions, you just get dizzy at suppliers’ generosity. But if today among these offers there are ones from normal suppliers (those who have cement), tomorrow, in case the honest importers leave the market, there will remain only offers from one-day firms, offering not cement, but “air”. The main thing to consider is that when investigating the endless chains of such dealers in attempts to return their hard-earned money, consumers will regretfully come to know that they were again trapped by cheaters and will thus willy-nilly get another bill receivable with a vague future on paying off.  

Now let’s get down to producers. They’re also losing from the “price war”. Russian cement industry has expended 80% of its funds. Vast investments are needed for the modernization and capacities to increase. Price fluctuations and uncertainty in supplies have resulted in the fact that some producers have started competing, not so much with import as with one another in prices, trading at the verge of survival just to “save the volumes”. In such terms it is basically impossible to save anything for modernization. It is today that the problem with volumes still exists, and tomorrow it’ll be gone, if we speak of high-quality cement. The consumption in Russia under any circumstances will keep growing by 10-15% per year (from 6 mln t to 9 mln tn t), which will inevitably cause deficit, if there’s no import, and a new price-hike. 

The goal of the Association is to create conditions for a predictable and stable market, so that not a single honest company, be it a producer, a consumer or a trader, has to end up losing. We must learn to live in peace and harmony with each other!

The Association is non-profit, but each member will take practical advantage out of it. Consumers will find reliable suppliers and special price offers, more profitable than for anybody else. Traders will get reliable consumers and support when negotiating with cement producers, as well as when searching for new cement and equipment suppliers overseas (an example of one of such events is the negotiations with Turkish producers on July 17, 2008 in Moscow). And what about Russian producers? Are they on the bottom of the Association’s list of priorities? No way! Here’s an incomplete list of what the Association can offer them: coordinated price policy (especially in periods of unstable or weak demand), issues of quality and production costs, help in attracting investments, search for equipment and modern technologies, use of foreign progressive experience when building new plants, programs for educating and recruiting new personnel, and, finally, - legislative work regulating the Russian cement industry. Also, special attention should be paid to the fact that the Association is open to all foreign companies, which are ready to be reliable partners with Russia. 

I’m inviting everyone, who observes the principles of honesty and openness in business, to join the Association!

Kind regards,

Victor Kovshevny,

President of the Association

The list of teh funders of the Association: