Imported building materials' share on Ukrainian market increases to 23% - expert

MOSCOW. April 17 (Interfax) - The share of imported building materials on the Ukrainian market has grown from 14% in 2021 to 23% in 2023, while the domestic market of building materials production needs systemic support from the state, CEO of the state Ukrpromvneshexpertiza enterprise and head of the Ukrainian Commerce and Industry Chamber's Industrial Modernization Committee Vladimir Vlasyuk said during the Building materials. Readiness to market needs for recovery roundtable, as reported by Ukrainian media.

"We have increased the share of imports in covering domestic consumption from 14% in 2022 to 23% in 2023. Hence, even the funds that are channeled through the public procurement procedure may largely go to imports. As for individual materials, an additional survey is needed, but the trend towards increased use of imported materials with a developed industry as a whole is negative for the economy," Vlasyuk said.

The second survey of the building materials market and its ability to meet the country's needs since the beginning of the crisis is currently underway, he said.

"The situation is changing rapidly. But so far there are no glass producing plants, as before. There are a few [investment] projects, but they are not operational yet. As for commodities like PVC [polyvinyl chloride], production has recovered, there is more capacity. There are new capacities in the cement industry. As for electrical equipment, as there was none before the crisis, so there is still none. This is still a field for investment projects, which should be promoted by the state," Vlasyuk said.

He highlighted the critical issues that businesses will be unable to resolve without the state's assistance.

"As for stimulating demand, there is a huge role of the state because it increases purchases [for defense and reconstruction projects]. It is crucial that these funds do not go for imported materials. We understand the extraordinary conditions in which Ukraine exists [...]. Therefore, we can, according to international legislation, apply, for example, Article 21 of the WTO, which allows a country to temporarily suspend its commitments undertaken upon accession to the WTO," Vlasyuk said.

He underlined the mandatory focus on localization, purchase (for budget or donor funds) of materials only on condition that at least part of them is produced in Ukraine.

Another crucial objective is autonomous energy supply. "Obviously, it is essential to move to the autonomous energy supply model, for example, from alternative sources, primarily, from solar power plants. The state should offer, jointly with partners, since a significant amount of funds is needed for this, good, cost-effective tools," Vlasyuk said.