Research Notes

A favorable situation is shaping up on external and domestic markets for Russian soda ash producers. Capitalizing on these opportunities will allow Sterlitamak-based Soda, Russia’s biggest soda ash manufacturer, to conquer new market niches. The company intends to rapidly upgrade its obsolete production facilities. In our view, implementation of these plans should push up the company’s share liquidity.

• Soda is the biggest chemical producer of soda ash in the Russian Federation and accounts for 4.6% of global output and around 55% domestically. The company is the leader in soda exports among Russian manufacturers (90% of soda exported from Russia was turned out by Soda).

• Soda has been exhibiting the strongest profit margins among domestic soda ash manufacturers. In recent years the company has been marked by positive improvements in all its financial indicators.

• Once Russia joins WTO Russian soda ash producers, including Soda, will have the opportunity to expand their sales markets (largely in Asian and East European countries). Meanwhile, the domestic market of soda ash and cement is expanding at a rapid pace.

• The upgrade of soda ash and cement production facilities will enable Soda to ramp up output and broaden its presence on global and Russian markets. By 2009 Soda plans to double soda ash output and boost cement production by 40% by 2007.

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Anastasia Sarapultseva

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