AUMUND Office in Moscow

Posted in: , on 12. May. 2009 - 18:51

May 12, 2009

AUMUND opened representative office in Moscow

Award to Franz W. Aumund for his services to the Russian cement industry

Roughly 60 guests followed the invitation of AUMUND Fördertechnik GmbH to attend the opening ceremony of the representative office at the German-Russian House in Moscow in ul. Malaja Pirogowskaja 5. In addition to representatives of various cement plants from Russia and Belarus, the Chairman of the Board of Management Franz W. Aumund and the Manager of the Subsidiary Dr. Nikolai Velten also welcomed prominent guests of other subsuppliers to the cement industry. As the first foreigner at all, Franz W. Aumund was presented a medal from the hands of Vyacheslav Boltenko, Director General of the Union of Cement Manufacturers, for his services in promotion of the Russian cement industry. To this date, AUMUND has supplied more than 400 machines to more than 40 cement plants in Russia.

Further proof of the good contacts of AUMUND to Russia was the visit of Sergey Marchenkov, Director of Eurocement Engineering, on the day of the opening. With 16 cement plants and a share of roughly 40%, Eurocement is the biggest producer on the Russian market. The company's share in the cement supply in central and northwest Russia is even larger. Also attending the opening celebration were representatives from global players in the cement industry such as Holcim, Lafarge and Heidelberg as well as many representatives of independent cement plants from Russia and Belarus.

The opening of a representative office in Moscow also means that the AUMUND group of companies has now been represented locally on the Russian market with own personnel since the end of 2008. AUMUND already has subsidiaries in the USA, Brazil, India, Hong Kong, China, France and the U.K. as well as a representative office in Poland.

For more than eight decades now, AUMUND has been synonymous for technological innovations in the field of hot and abrasive bulk material transport. Today, the products of the German group of companies which apart from AUMUND Fördertechnik GmbH also includes SCHADE Lagertechnik GmbH in Herne and the British company of B&W Mechanical Handling Ltd. in Ely, are supplied to more than 120 countries all over the world.

The AUMUND Group which just until a few years ago supplied equipment to Russia mainly via plant engineering and construction companies, considers the sales potential to consist above all in the varied solutions for the transport of hot and abrasive bulk materials.

The background for the huge demand for cement in Russia is the building industry that now as before runs at full steam. The volume of the building works showed an 18% increase in real terms in 2007 which is equivalent to 94 billion Euros. Since the end of the 1980ies, the industry has not seen such an enormous growth. This development is powered by the house building which stands for about half of the demand for cement. In the previous year, roughly 63.8 million square meters of living space were newly erected in Russia. One square meter of living space requires about 500 kilogram of cement.

The high prices and supply bottleneck situations affecting cement thus also jeopardise the ambitious house building program of the Russian government which envisages a completion volume of 80 million square meters by 2010. The program for the development of Russia considers two scenarios that might come true by 2020. The first scenario is based on annual growth rates between four and six percent in all segments of the building sectors and estimates a cement demand of 112 million tons. The second variant, which amongst other issues includes the implementation of the federal program of the "inexpensive flat", even leads to an estimated cement demand of 160 million tons.

In spite of the financial crisis, the country is on the brink of an enormous push for modernisation in road construction, for the extension of ports and airports as well as the construction of power stations for which in future even much larger cement volumes will be required than in the past. Besides, the construction projects for the Olympic Winter Games 2014 in Sochi will further drive up the demand. Although the financial crisis presently imposes a restraint approach on investments, further construction projects should surely materialise.

Yet today Russia is one of the five largest cement nations in the world, producing almost double as much cement per year as Germany. By 60 million tons, a new record value since the end of the Soviet Union has been reached in 2007 (in 1990 the production was 83 million tons).

The manufacturing capacities within the country, however, are close to reaching their limits. A leading German banking institute assumes in an analysis that based on the existing facilities, Russia's producers would be able to produce about 64 million tons per year. The degree of wear of today's about 50 cement plants in Russia, however, is roughly 70%. The major part of the production applies the so-called wet process which due to the high energy consumption is considered to be outdated. In 2007 only 8 million tons of cement out of 60 million tons were produced in dry process plants. Thus, in addition to the construction of new plants, investments amounting to billions into existing operations also are required.

In spite of the impacts of the worldwide financial crisis, AUMUND trusts that the activities in the important Russian market will pay in the long term. According to a forecast, the cement industry will still grow at a two-digit rate until 2010.

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Fig. 1: Prominent guests attended the opening ceremony of the AUMUND representative office in Moscow

Fig. 2: Franz-W. Aumund in discussion with guests

Fig. 3: German-Russian House in Moscow


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