The Production of Cement

There are 16 cement enterprises operating in Ukraine and only one of them is the state property. Other enterprises of the cement industry have been privatized or are being privatized.

The Public Corporation “Baltsem” (the Kharkiv region), the Public Corporation “Volyn” (the Rivne region), the Public Corporation “Mykolaivtsement” (the Lviv region), the Public Corpotation “Kryvorizky Tsementno-Shyferny Kombinat,” the Public Corporation “Dniprotsement” (the Dnipropetrovsk region) are considered to be the largest enterprises proceeding from their production capacity. The bulk of the cement enterprises of Ukraine, in connection with a low demand for cement, are forced to use their production capacity not to the full extent. This is associated with the fact that starting from 1992 the volume of consumption and production of cement in Ukraine has steadily decreased.

The increase in the cost price of Ukrainian cement in 1.5 times in comparison with 1993 (from 62 hryvnias for one ton to 84 hryvnias for one ton in comparable prices) is one of the causes of the demand for the cement. The increase in expenses associated with energy producing substances (first of all those associated with gas), the decrease in the volumes of construction in Ukraine, and permanent non-payments of consumers of cement became the basic causes of both the recession in the production of cement and partial loss of markets outside Ukraine.

The increase in the cost price of the cement production is associated with both the increase in the price for natural gas on the Ukrainian market and great energy capacity of the production. That is why, proceeding from the available information, the share of cement export at enterprises does not exceed 10 to 12 % of its production. The export capacity of the cement industry is potentially great and can be increased if a terminal to ship cement for export is built at the Illichivsk port.

Lack of modern equipment to produce cement is also a cause of the insignificant export of cement from Ukraine.

The increase in the share of barter in mutual settling among sellers and buyers is another cause of low efficiency of cement export.

The great energy capacity of cement enterprises, lack of modern equipment and investment resources to make a transition to coal firing and to base the cement production on “half-dry” and “dry” methods pose obstacles to raising efficiency of cement enterprises.

It is characteristic of the market of cement that there is a medium degree of competition on it.

Ex. 1. Read and translate the text.

Ex. 2. Answer the following questions:

1. How do the cement enterprises of Ukraine use their production capacity?

2. What is the cause for the increase in the cost price of Ukrainian cement?

3. Why does Ukraine have the insignificant export of cement?

4. What poses obstacles to raising efficiency of cement enterprises?

5. What kind of competition is characteristic for the market of cement?

Ex. 3. Read the following false statements and correct them:

1. All Ukrainian cement enterprises have been privatized.

2. The cost price for Ukrainian cement retains stable for many years.

3. There are no obstacles to raising efficiency of cement enterprises.

4. The cement enterprises posess little energy capacity.

5. The cement market in Ukraine has a very high degree of competition.

Ex. 4. Translate the text into Ukrainian:

For the time being, the bulk of enterprises of the cement industry are privatized, the Concern “Ukrtsement” does not have levers of real impact on activities of the enterprises which under condition of the recession of production survive independently. The concern, in fact, became an advisory body and does not interfere in economic activities of enterprises of the cement industry. According to the statute of the concern, the enterprises which are comprised by it, retain their economic independence and the rights of the legal person. The statute of the Concern “Ukrtsement” does not provide for functions concerning centralized distribution of products, setting prices, the maximum standards of profitability, volumes of production, distribution of markets and other decisions regulating economic activities of the members of the Concern “Ukrtsement” that can have an impact on the development of competition and the situation on the national market of cement. The mentioned provisions of the statute do not make it possible for the Concern “Ukrtsement” to dictate its conditions during the sale of their products because the Concern “Ukrtsement” does not conclude contracts for the supply of products of enterprises of the cement industry.

For some time past, as a result of reforming relations of ownership, a tendency to establish such financial and industrial groups that are not linked among themselves with relation of control, but have certain common interests due to contracts, agreements, etc. has outlined. In particular, one of that sort of groups is composed of the Association “Ukraina”.

But the owners of blocks of stocks often do not have a decisive impact on activities of the enterprises, which, to a certain extent, lays obstacles to the improvement of the system of management at those enterprises, to drawing in investments for their development.

UNIT 30