1. Soda ash market probed by competition watchdog FAS

    1 June, 2014

    The Federal Antimonopoly Service (FAS) of Russia has prepared an analysis of the country’s sodium carbonate (soda ash) market. According to the analysis, Russia’s soda ash market is federal in its nature: no technical or economic factors are present to limit the consumer’s capability to buy soda ash within the country’s borders.

    Soda production business in the country, excluding the Crimean Federal District, is pursued by 5 entities, namely, OJSC Bashkir Soda Company; OSJC Berezniki Soda Plant (Perm Krai); OJSC Achinsk Alumina Refinery (Krasnoyarsk Krai); CJSC Pikalyovskaya Soda (Leningrad Oblast) and LLC IA Khimprom (Kemerovo). A market share of over 50% is held by OJSC Bashkirian Chemistry, a group that includes both the OJSC Bashkir Soda Company and OJSC Berezniki Soda Plant.

    At the same time, the portion of the Russian market held by imported products of the same type has grown recently, exerting a pricing pressure on the domestic soda producers. This market share growth is being led by global majors, such as Solvay of Belgium, ANSAS of the US, and Ciner Group of Turkey, and is being contributed by an increase in Russia-bound deliveries of natural soda ash derived cheaply from naturally occurring deposits.

    In the words of Anna Mirochinenko, Head of the Chemical Industry and Agro-Industrial Complex Department at the FAS, emergence of new suppliers is precluded, on the one hand, by the current high levels of demand satisfaction, and on the other, by significant market entry costs combined with protracted payback periods, as well as by high feedstock transportation costs and high energy use intensity of the production process.

    “Taking the structure of the market into account, the FAS of Russia has decided to place more effort in monitoring the prices and the geography of the deliveries carried out by the market players, to be able to uncover possible violations of the antimonopoly legislation, including violations in the form of arrangements and prearranged activities,” said Anna Mirochinenko.

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