Russian Nonwovens Industry May
Reach Historical Highs This Year
The nonwovens industry in the country has grown
35% thus far in 2017.
By Eugene Gerden,
The Russian nonwovens industry is steadily growing this year, amid the ongoing recovery of the national economy from the financial crisis and its consequences, according
to recent statements from Denis Manturov, Russia’s minister of
Industry and Trade.
Since the beginning of this year, the industry has already
grown by 35%, up to $600 million in value terms, compared to
the same period last year, and this has become a record high for
the last 36 months.
According to predictions of analysts in the Russian Ministry
of Industry and Trade, if the same growth rates are maintained in
the second half of 2017, the total value of the market may reach
$1.2 billion, which would be a historical record for the Russian
nonwovens industry in the modern history of the country.
The ongoing growth of the industry could be mainly explained
by the recovery of the major nonwovens’consuming industries in
Russia, and a significant growth in the demand for nonwovens
from the country’s military and defense industries.
The growth of the industry is also due to the increase of its
state support. Last year, the Russian government included the
nonwovens and technical textile industries in the list of industries for which development will become a priority for the state
until 2025. The latter also resulted in the provision of a number
of grants to some leading domestic nonwovens companies for
the expansion of their production volumes and increasing R&D
activities in the industry.
In addition to the support of domestic producers, as part of the
state plans is also creating conditions for the attraction of foreign
investments to the industry. As part of this, Russia’s president
Vladimir Putin has recently promised leading Western nonwovens’ producers to provide tax, customs and other benefits in the
case of their decision to establish production capacities within
the territory of the country.
According to Dmitry Peskov, a press-secretary of Putin, local-
ization of production within the territory of Russia will be benefi-
cial to foreigners, taking into account the resuming devaluation
of the Russian currency – ruble, which makes local production
more profitable than further imports from abroad. This also pro-
vides an opportunity to local producers to start expansion of their
Russian-made products to some neighboring countries in East-
ern Europe and the CIS region.
Such an opportunity, for example, is also considered by some
major global diapers manufacturers operating in Russia. In the
case of the local diaper market, according to predictions of state
analysts, the market is expected to grow by 15-20% both in vol-
ume and value terms this year.
The introduction of Western sanctions against Russia along
with the economic crisis in the country has resulted in the sus-
pension of many investment projects in Russia, which were im-
plemented by foreign investors. However investment activities of
foreigners in Russia has started to recover since the second half
of the current year.
For example, Procter & Gamble (P&G) has officially an-
nounced its plans to invest up to 5 billion rubles ($120 million) in
the expansion of its plant for the production of diapers and other
similar products, based on technical textiles and nonwovens, in
the Tula region.
In addition to duties, the companies are still unhappy with
the existing high level of corruption in Russia, which compli-
cates implementation of many of their investment projects in
the local market.
The financial recession in Russia has resulted in an increase
in the prices of diapers in Russia and is associated with this de-
cline of consumer sales, however, amid the ongoing recovery of
the market, producers hope to restore their positions in the local
market to up to pre-crisis figures of 2014 by the end of the cur-
Last year, the Russian diaper market amounted to RUB 6. 7 billion ($120 million) in sales terms, which, according to Manturov,
Russia’s Minister of Industry and Trade, and a person that oversees
the development of the diaper industry in the Russian government, is a very small figure for the country, but, he says, the market
has the potential to grow by 10 times in the middle term.n