Coatings World - March 2017

Russia
March 2017 www.coatingsworld.com Coatings World | 53

past few years the company’s laboratory
during the studies of coating produc-
tion of competitors observed constant
fall of production quality. He added that
basically these products remain within
the quality parameters required by the
country’s legislation, but with increasing
frequency this quality slumps to the “bor-
dering level.”
Pogrebitsky admitted that
Lakokraska also takes some steps to-
wards reduction of production costs,
adding that the company is very careful
in applying for cost-saving innovations
and in fact changes in formulations are
approved only after multi-staged studies,
including in independent laboratories in
Russia and Belarus.

However, the reductionof costs seems necessary now, as amid harsh economic situation a significant part of customers switched to coatings in the economy segment and lower prices now are considered a crucial advantage.

Peter de Groot, general director of Hempel A/S in Russia, Ukraine and CIS Region stated that in Belarus some customers remain a challenge because they do not look at real costs, but rather look for price/kilo ratio in their tenders without considering coverage, performance or gains in productivity.

However, Hempel is confident that these customers will in the future consider and embrace the benefits of the company’s new technologies and make improvements in their productivity and quality of output, he added. In addition, there is a need to modernize a part of the Belarusian industry to take advantage of new paint technologies, as is done in Europe and in Russia.

At the same time, Tatiana Perez, the spokesperson of Belarus sales division of Hempel, said that some part of Belarus industry has passed modernization, including several machine-building plants, such as Gomselmash, Belaz, MTZ, MAZ, where new paintings lines have been installed over past several years.

There is no official information, but
estimations of independent consulting
agencies suggest that in 2014-2016 the
demand for coatings in Belarus reduced
nearly 10-12 percent, while the share of
economy segment rose from 41 percent
to 56 percent. This could be explained
by the not very high living standards in
Belarus, where average wages in 2016
were about $400 per person per month,
compared to almost $600 in Russia.

Import has no dominance

According to Russia’s consulting agency LKM Portal, in 2016 the Belarus coatings market has a level of self-sufficiency at 85 percent. At the same time, Belarus was importing primarily expensive coatings and exporting production of economy segment. For instance, LKM Portal hold up as an example the first quarter of 2013 when Belarus has exported 6,900 tons for $12 million and imported 5,200 tones for

$22 million.

According to Russia’s State Statistical Service, in 2016 Belarus has exported 23,500 tons of coatings to Russia for $26 million.

As a result, on average the cost of exported Belarus coatings is nearly 2 times lower, compared to imported products. This was because coatings in Belarus were 15 percent cheaper than in Russia and 30 percent than in Europe.

Over the past three years the situation
has not changed significantly and only
the gap between domestic and European
products slightly rose due to the devalu-
ation of the Belarus ruble.
According to estimations of
Lakokraska the company accounts now
for 29 percent share of domestic coatings
market, with nearly 30 percent to im-
porters and 41 percent to other country’s
manufacturers. Belarus is importing coat-
ings primarily from Russia and Europe,
in the first place Poland and Germany.
For instance, in 2013 LKM Portal has
estimated the share of importers in the
domestic market at 15 percent.