Production of synthetic rubber in Russia has been growing steadily over the last few years. Though domestic demand remains low, the weak ruble provides an opportunity to increase export. With this respect, Russian producers have a stimulus to invest more in modernization and in expanding the product line. Launching local grades of special-purpose rubbers is exactly what the local converters expect. The basic criterion for success would be a lower price compared to imports, with similar quality. However, the industry clearly needs the government support. Loan and tax privileges, promotion of sales and exports – these are the conditions required for the Russian rubber market to develop rapidly.
Russian tire producers have increased their production over the past year due to ruble’s depreciation. The import prices soared, its volume fell sharply, and the Russian tires have won the additional demand. Meanwhile, the weak currency supported exports. Therefore, even the overall decline in the automotive industry in Russia did not have a negative impact on the segment.
The landmark event for the tire market in 2016 will be the launch of the Japanese producer's plant in Ulyanovsk. This will strengthen the competition in the middle-price tires segment for passenger cars. With respect to truck tires, the adoption of anti-dumping duties against Chinese products and the overall reduction of import enabled Russian plants to increase their production volumes. Agricultural and industrial tire sectors continue to develop. What will be the structure of the Russian market in 2016? How will the export attractiveness reflect on tires production?
The past year was not very successful for producers of industrial rubber products, as the segment directly depends on the country’s economy. But the 2016 has started positively: developments in the agriculture and in the extractive industries are contributing to higher consumption locally. At the same time, the lack of special grades of feedstock and advanced equipment restrains competition in the areas where consumer chooses high quality and stability of supply whatever the cost. What do Russian producers of industrial rubber products need for successful development in the current environment?