Nickolai Sobolev talks about his Association and import replacement in the construction materials industry

Nickolai Sobolev talks about his Association and import replacement in the construction materials industry
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Why the “National Union of Construction Materials and Structures Producers” Association, who is in the Association, what’s the difference between it and NOSTROY and NOPRIZ… the Executive Director of the new union, Nickolai Sobolev, discussed these questions with

— Let’s start with the questions: who created the “National Union of Construction Materials and Structures Producers” and why? Who’s in it and what are its tasks?

— The creation of the Association was initiated by a group of large developers and construction materials producers – “INTECO”, “MORTON”, “TechnoNICOL” and the Association of Ceramic Materials Producers. Each of them has similar problems in the industry, as well as their own problems. Of course, it is easier for the Ministry to deal with one aggregator of common interests. So, we had the idea to create a nationwide association, supported by the Ministry of Construction, Housing and Utilities, Ministry of Trade and Industry and ROSNANO. Our Association is not the integration of SRO like NOSTROY. It is rather an industry business union like RUIE (Russian Union of Industrialists and Entrepreneurs) which aims to deliver the opinions without any commercial interest to state authorities.

— The Union consists of…
— Every new member is admitted according to the Charter at a general meeting. The next will be in September – for admission of all candidates having sent an application recently. These may be separate enterprises and associations.

— Your Association was created recently, but it is already being criticized. Thus, the opinion of the existing associations, in particular of the NP “National partnership of associations and unions of construction materials producing plants”, is said not to have been taken into account while creating the Association. …
— In March we held consultations with many industrial unions and presented our plans to their leaders. The result was that they suggested we admit only already existing associations. But having assessed their business potential we understood that many of them worry only about their status. That’s why we admit all, including educational institutions. As far as the Partnership you’ve mentioned is concerned, personally I do not know it. Besides, if anybody creates his company or political party, does he ask other companies or parties for advice?

— Ok, it is clear. And what will your Association primarily deal with after the autumn congress?
— Free competition, the creation of a normal legal base, the use of best business practices and scientific achievements are among our priorities. Much attention will be paid to promotion. They say, “There is no prosperity without publicity”. But to start with, we shall develop, together with the representatives of Ministry of Trade and Industry, the Ministry of Construction, Housing and Utilities and ROSNANO, a concept of construction materials industry development strategy.
At the same time we shall audit norms and regulations of the construction materials production industry. And the third aspect is the support of industry science. In particular, we want to have success in the creation of a scientific-manufacturing cluster on the basis of Moscow State University of Civil Engineering. Now, for example, there is no training in some necessary disciplines because of methodical shortcomings.

— Which ones?
— For example, composite materials science. It is not on the list of priority disciplines, thus specialist training does not get enough financing. So, we want to expand the list.

— And how will your activity be financed?
— First of all, membership dues & fees. Our one-time entry fee is 100,000 rubles, as is the annual fee. Secondly, there will be income from different events: conferences, forums, etc. Thirdly, there will be earnings from expert work: marketing investigations, market condition surveys, ratings, norms and regulations creation, etc.

— And will producers have money to pay for them all? Will the situation on the Russian construction market allow it?
— The attractiveness of our market is in great unsatisfied demand. It is determined by a great number of people who want to improve housing conditions or, say, to move from the regions of the Extreme North. In favorable conditions the growth of our market could be much bigger than in Dubai, for instance.

— And the problem of import replacement?
— There is no such problem for the construction materials market. While constructing economy-class and comfort-class houses, imported construction materials are not used in practice. The same is true of social objects: according to expert assessments, the import share in their construction does not exceed 10%.
However, in the segments of “elite” and “premium”, it is almost impossible to replace quality imported construction materials. These are, for example, some systems of ventilated facades, many roofing and damp-proof systems, or translucent structures – they are either made totally from imported materials and by imported technologies, or have special chemical admixtures and compounds of foreign production.
We have sufficient primary materials, but the dependence on foreign machines and mechanisms is rather big. Where to get modern equipment for construction materials plant is really a question. Foreign-produced equipment is also used in electric power supply systems, heating, ventilation, air conditioning, and water- and gas-supply systems. Thus, domestic production is quite enough for meeting the “basic demands” of the industry, while hi-tech equipment is still bought abroad.
Lack of plants producing modifying admixtures for dry construction mixtures makes producers import the admixtures. I think it is reasonable to organize the production of cellulose esters for dry mixtures, tartaric acid, sodium gluconate and some other components in Russia.
The issue needs thorough consideration with participation of all large producers of the construction materials industry and the Ministry of Trade and Industry of the RF. The instrument for the solution must be the Strategy for Construction materials industry development, the design of which is assigned to the Ministry of Trade and Industry.

— Will anything change in the market in two or three years?
— The market lives on money. If there is money, there is growth. So, I think the construction materials market will grow smoothly and slowly.

— Construction materials production is sent over to the RF Ministry of Trade and Industry. There are people saying that the Ministry has failed to do this, to fulfill that…
— I think those who say so do not understand the functions of the Ministry. The Ministry deals with the industrial police implementation. It is allocated budget money for that and the Ministry distributes it according to law and Government resolutions. It has also a control function. Anybody may say anything, but let critics say specifically where the Ministry has made mistakes. There are 20-25 industries under the RF Ministry of Trade and Industry, and the application of their production is a matter of profile ministries. That’s why I consider functions partition between Ministry of Construction, Housing and Utilities and Ministry of Trade and Industry quite reasonable.

— Thank you for your comprehensive answers. We wish you and your Association success.

Oleg Klimov