Steppe Cement’s Revenue Falls As Kazakhstan Cement Consumption Drops
Steppe Cement, a construction materials producer in Kazakhstan, reported that revenue fell as cement consumption in the country contracted, although the company maintained its market share.
Revenue for the year ended 31 December 2016 fell 8% to 17.94m tenge (KZT), compared to 2015 and sale volumes were down 4% to 1.57m tonnes of cement.
The average price, excluding VAT, for delivered cement slipped 4% to KZT 11.42 per tonne, mostly due to competition among local companies and the start-up of two dry kilns in the country during the year.
While, the average ex-factory price stood at KZT 9,596 per tonne, this was 6% below 2015 levels, and represented $28 per tonne based on 2016’s average exchange rate of 340 for revenue versus 208 in 2015.
During the year, cement market consumption in Kazakhstan is thought to have fallen 8% to 8.9m from 2015. The country imported 500,000 tonnes of cement in 2016, down from 1.2m in 2015, and exported 400,000 tonnes, up from 100,000.
In the fourth quarter, the company tried to maintain higher prices at the expense of market share, and it said that this strategy may be revised depending on the market reaction and the market share in 2017. However, the company’s market share remained broadly stable at 17% during 2016.