Market Trends of russia adhesives Industry
With the advancement in plastic recyclability and demand for food and beverage industry, plastic packaging to lead the packaging industry
- The Russian packaging industry has experienced healthy growth in the last couple of years. The rapid adoption of design and technology to package products for better protection and enhance products' safety and longevity is likely to offer promising growth opportunities in the near future. The Russian packaging industry has majorly been driven by the rapid growth of the food and beverages industry in recent years. Russia is a major exporter of food products worldwide, which further influences packaging sales to meet the need for sophisticated packaging across various-end use industries.
- In line with the COVID-19 pandemic, the country-wide lockdown and temporary shutdown of manufacturing facilities caused several issues, including disruptions to supply chains and imports and exports trade. As a result, the country's packaging production declined by 7% in 2020 compared to the previous year, thus, significantly affecting the market. Packaging production is majorly driven by plastics in the country, which nearly accounted for over 70% of the packaging produced in 2021. With the advancement of plastic recyclability, the plastic production segment is likely to register the fastest growth with a CAGR of around 4.4% during the forecast period.
- The growth of the packaging industry in Russia is expected to continue due to the increasing demand for fresh food domestically. The growing interest in public health issues during the post-pandemic period, along with the emerging e-commerce activities across the nation, is likely to continue to boost the growth of the food processing industry, which is expected to propel packaging demand over the coming years.
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Rising commercial vehicles production such as trucks propel the automotive production
- The automotive production market in Russia is not growing as it is majorly becoming an importer of passenger vehicles. Foreign companies hold the maximum share in the Russian automotive market as foreign manufacturers' shares accounted for 8.9 million units in 2020 compared to Russian manufacturers' 3.5 million units of passenger vehicles. This was due to geopolitical tensions in Russia in recent years.
- Minimal or null Y-o-Y growth is expected in 2022-2028, which is evident from the fact that car sales decreased by 78.5% Y-o-Y in 2022. Foreign players are leaving the Russian market because of socio-political reasons such as soaring financial sanctions by foreign countries on different resources in terms of exports and imports, growing interest rates by the Russian Federal Bank, and war conditions with the neighboring country Ukraine. Optimistically, there was an announcement made in March 2022 by the Russian Ministry of Industry and Trade to take the automaker CJSC Renault plant under government control to attempt the revival of the automotive industry, which can prevent the automotive market from going into huge losses during the forecast period 2022-2028.
- In the case of commercial vehicles, the production by Russian manufacturers is growing, with leading truck manufacturer Kamaz in Russia having increased the number of trucks produced from 5700 in Q1 of 2018 to 7400 in Q1 of 2021. This increase in the production of trucks is expected to contribute to the growth of the Russian automotive sector in the forecast period 2022-2028.
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OTHER KEY INDUSTRY TRENDS COVERED IN THE REPORT
- Despite the crisis from Western countries due to the Ukraine invasion, the Russian investments and aim to achieve 81% domestic manufacturing by 2030 boosts the aerospace demand
- Despite the major demand met by imports, the Russian government’s plans to increase local footwear manufacturing is likely to increase the footwear and leather industry
- Increasing government investments in infrastructure and institutions including healthcare and education to lead the construction industry
- Rising furniture demand and exports is likely to propel the woodworking and joinery
