One of the key players in Russia’s cement industry, the holding company ‘Cemros,’ which owns a third of the market, has been forced to suspend operations at two of its facilities. The plants, located in the Belgorod and Ulyanovsk regions, are completely shut down. Another production site in the Lipetsk region has been switched to a reduced work week — employees are working only four days instead of five.
This is reported by Finway
Reasons for the Halt: Declining Demand and Competition
The official reason for the shutdown of the plants is cited as a sharp decline in demand for cement. The primary cause of this is the crisis in the residential construction sector, as well as increased competition from cheaper cement imported from Belarus and Iran. The company has been compelled to take unpopular measures to preserve the business while simultaneously reducing production and employees’ working hours.
Deeper Issues: Sanctions and Financial Instability
At the same time, experts emphasize that the true reasons for the crisis in the Russian construction industry are much deeper. High interest rates make it impossible for developers to secure financing, and the population is unable to obtain mortgage loans due to their inaccessibility. Additionally, international sanctions have significantly restricted access to modern equipment and technologies for Russia’s industry.
“It is precisely Putin’s aggression that has led to sanctions, rising interest rates, a collapse in mortgages, a decline in construction, and a shift of resources from the civilian economy to the defense industry. Despite the Kremlin’s claims of ‘stability,’ these processes are systematically undermining the Russian economy from within,” noted the Center for Political Analysis.
Thus, the situation surrounding ‘Cemros’ illustrates the extensive economic problems of the Russian Federation, which are caused by both external and internal factors. The construction sector, which has traditionally been a driver of economic growth, is now suffering from sanctions pressure, financial instability, and a loss of competitiveness in the domestic market.