21
november 2014
international
construction
REGIONALREPORT
Major challenges lie ahead
>
economic picture. In his opinion, the knock-on effect would be
growth of between +3% and +5% next year in the equipment
rental market.
He said, “There is a reduction in demand for new equipment,
both Russian and equipment produced overseas, though
demand in the rental sector remains stable.
“As a result of difficultieswithnew equipment sales, dealers are
ready tooffer special purchase conditions for rental companies –
which is a good investment driver for the rental industry.”
One high-profile equipment supplier inRussia is JCB, whose
dealer Stroykomplekt opened a US$ 9.7 million facility at
Ekaterinburg last year.However, JCB said therehas been a sharp
market decline this year. Consequently, it has just announced
150 redundancies at its UK offices owing to a “severe decline”
inworldmarkets.
A JCB spokesperson said, “Russia is a very important market
for JCB and has been for more than 30 years. The Russia-
Ukraine crisis has had a particularly significant impact on JCB
with sales to both countries dramatically down over the past
three months. For the six months to June 2014, Russia was
down by -22%.
“Despite the current difficult market conditions JCB Russia
has significantly invested in the promotion of JCB’s machines
and service back up by attending leading exhibitions inRussia.
“Large numbers of JCB machines, including backhoes,
T
here are not many people who are up-beat about the
Russianmarket at themoment. As Scott Hazeltonwrites
in thismonth’sEconomicOutlook, growth is at bestweak
in the constructionmarket.
But that is not to say that there aren’t good projects coming
through.There is investment in infrastructure, oil&gas projects
andof coursedevelopment around venues and infrastructure for
the 2018WorldCup, but there are still issues.
Construction equipment rental companies such as theCramo
Group have reported challenging conditions, which it believes
have been influenced by the ongoing tensions between Russia
andUkraine.
Nikita Krotkiy, of the RusRental organisation, said that
construction sector conditions had indeed been turbulent
over past fewmonths following trade sanctions being imposed
– which have targeted Russia’s banking, energy and defence
sectors.
However, the rental sector expert said factors such as the
World Cup and other infrastructure deals would improve the
Aecomwas engineer on the newly complete Spartak
Mascow stadium, one of the 2018World Cup venues.
Major challenges
lie ahead
Despite global sanctions, the 2018WorldCup and key
construction projects inMoscow in particularmay offer
hope for construction inRussia.
Neill Barston
reports.
