18:03 16.04.2024

Share of imported building materials on Ukrainian market grows to 23% – expert

3 min read

The share of imported construction materials in the Ukrainian market has increased from 14% in 2021 to 23% in 2023. The domestic production market for building materials requires systematic support from the government, according to Volodymyr Vlasiuk, CEO of Ukrainian Industry Expertise and Chairman of the Industrial Modernization Committee of the Ukrainian Chamber of Commerce and Industry.

He expressed this opinion during a roundtable discussion titled "Construction Materials: Readiness for Market Needs during Recovery," held at Interfax-Ukraine on Tuesday.

"The import share in covering domestic consumption has grown from 14% in 2021 to 23% in 2023. Consequently, even funds allocated through public procurement procedures can significantly contribute to imports. While additional research is needed to analyze specific materials, the overall trend of increased use of imported materials in a developed industry is negative for the economy," said Vlasiuk.

He reported that the market research on building materials and its ability to meet the country's needs, the second since the war began, is currently underway.

"The situation is dynamic. However, there are still no glass production plants, as before. There are several [investment] projects, but they are not operational yet. Regarding specific items like PVC, production has recovered, and capacities have increased. New capacities are emerging in the cement industry. However, when it comes to electrical equipment, it remains absent, just as it was before the war. This area is currently open for investment projects that should be incentivized by the state," Vlasiuk said.

The expert highlighted key questions that businesses cannot address without government involvement.

"In terms of stimulating demand, the government plays a crucial role because it increases procurement (for defense and recovery projects). It is essential that these funds do not go toward imported materials. We understand the extraordinary conditions under which Ukraine exists due to the ongoing war. Therefore, according to international legislation, we can apply, for example, Article 21 of the WTO, which allows a country to temporarily suspend its commitments made upon joining the WTO," said Vlasiuk.

He emphasized the necessity of focusing on localization and purchasing materials (using budgetary or donor funds) only if at least part of them is produced in Ukraine.

Another critical issue is securing specialized personnel. "We need to strike a balance between the needs of the economy and the frontlines. For the country's sustainability, both directions are necessary," he said.

Yet another key task is achieving energy autonomy. "Clearly, we need to transition to a model of energy self-sufficiency, primarily from alternative sources such as solar energy. The state should propose this jointly with partners, as a significant volume of resources is required, along with effective economic tools," added Vlasiuk.