The application range for aluminium products is steadily expanding. To address changing end user needs and survive intense competition, manufacturers are modernizing their production facilities and broadening their product portfolios. In Russia, manufacturers have the added challenge of dealing with the countrys accession to the World Trade Organisation.
Ms Monika Fechner analyst of Frost & Sullivan Industry said that the market for massive, standardised production is currently dominated by the three largest producers, Alcoa Inc, OJSC Kamensk Uralsky Metallurgical Plant and Krasnoyarsk Metallurgical Plant Limited. On the other hand, the market has numerous smaller, specialised companies that manufacture higher, value added products such as aluminium profiles, siding, or roofing.
Mr Fechner said that some end users require standardised aluminium products. These, for example, might include foils used in the packaging industry or wires and cables used in the electronics industry. In contrast, the construction industry with its diverse needs requires a high degree of customization. Aluminium product manufacturers, therefore have to find their own specializations in order to develop their business. However, fluctuating energy and aluminium prices pose a challenge to market participants. Russia has accessed the WTO in 2012 and increasing competition from imports is further challenging domestic companies.
She said that local aluminium product companies are afraid that Russian accession to WTO will squeeze their share in the domestic market, due to the influx of more competitors and fiercer competition. On the other hand, Russian companies which currently export only around 10 to 20 per cent of their production, mostly to other CIS countries, Asia and the Middle East, stand to gain access to a wider range of export opportunities.
