FAS ANALYSED THE MARKET OF AGGREGATES IN THE RUSSIAN FEDERATION

The antimonopoly authority analyzed the state of competition in the market, barriers and measures required for market development

The study of the state of competition on the aggregates markets, was necessary since, foremost, it is one of the most important, base markets of construction materials. The market satisfies the needs of a number of sectors in industry and construction: production of commercial concrete, reinforced concrete structures, asphalt concrete, housing construction, construction of non-residential and infrastructure facilities.

Due to high transportation costs for moving aggregates from sellers to buyers and the vast territory of Russia, the markets of road metal, sand, gravel and sand-and-gravel mix are regional and inter-regional.

Therefore, the markets are predominantly highly concentrated; with a small number of economic entities that control significant market shares. Regions with a high level of consumption or bordering with the subjects where supply exceeds demand are the exception.

Aggregates markets have significant barriers, including administrative ones: long periods of obtaining permits and absence of an efficient mechanism of competitive granting of licenses.

The main barriers for expanding interregional trade are a high share of transportation costs and railway car shortage for product shipment. The major problems of competition development also include limited resources.

Based on its assessment of the state of competition and in order to develop aggregates markets, FAS proposes several measures, which are listed in a special analytical report, along with a more detailed list of barriers.