Forbes: Irish CRH will concentrate almost half of the cement market in Ukraine after buying a plant near Mykolaiv

The Irish company CRH can actually increase its share in the cement market in Ukraine to 50% after closing the deal on the purchase of the assets of Dickerhoff Cement Ukraine, including the plant near Mykolaiv.

This is stated in the article «Forbes», «NikVesti» writes.

In June, the Italian cement manufacturer Buzzi, which through its subsidiary Dyckerhoff GmbH owns the «Volyn-Cement» and «Pivdencement» plants in Ukraine, announced that it was selling part of its business in Eastern Europe to the Irish CRH Group, one of the largest manufacturers of building materials in the world.

The «Pivdencement» plant, known as the Olshan cement plant or Yugcement, is located in the village of Olshanske, 35 kilometers from Mykolaiv. After the declaration of Ukraine's independence, the Olshansk cement plant with a design capacity of more than 1.25 million tons of cement per year became the largest building materials industry enterprise in the south of Ukraine. In 1994, the state plant was transformed into an open joint-stock company «Pivdencement».

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In 2000, a controlling stake in OJSC «Pivdencement» became the property of «Dyckerhoff Ukraine» (a subsidiary of the German corporation «Dyckerhoff AG»). In 2015, «Dyckerhoff AG» became a 100 percent owner of the company, having bought out the shares of minority shareholders.

Last year, 5.4 million tons were produced in Ukraine, which is half as much as in 2021, according to data from the «Ukrcement» association. Buzzi's share was about 14%.

In Ukraine, CRH owns three factories: in Kamianets-Podilskyi, Odesa and Mykolaiv (Lviv region).

According to Forbes calculations based on the data of market participants and the profile association, about 44% of the market now belongs to «Ivano-Frankivskcement», 32% to CRH, the rest was divided by the company «Dickerhoff Cement Ukraine» (14%) and «Kryvyi Rig Cement» ( about 10%).

The value of the deal is €100 million, Buzzi website reports. The Italian manufacturer expects to close it in 2024.

«If AMCU approves the concentration, CRH's share will increase to 46%. Competitors of the Irish company are Kryvyi Rih Cement (market share – less than 10%) and Ivano-Frankivsk Cement (44%)», – Buzzy writes.

On September 13, Forbes reported that the Antimonopoly Committee of Ukraine (AMCU) received an application from the Irish CRH for granting permits for the concentration of assets of the Dickerhoff Cement Ukraine company, but returned it to the applicant without consideration.

The reason for the refusal was that the document did not meet the requirements of the committee.

«Repeated applications have not been received», – AMCU added, responding to the request.

At the same time, the Antimonopoly Committee, on its own initiative, began researching the cement market in Ukraine and has already established that it is dominated by an oligopolistic structure.

«The appearance of new players on the market is difficult or impossible,» – as contained the answer of AMCU.

It is known that in March 2023, National Agency on Corruption Prevention (NACP) added Buzzi to the list of international sponsors of the war. According to the agency, the Italian company is one of the five leaders of the Russian cement industry and has refused to leave this market.

In turn, CRH, which owned six factories of construction mixtures in the Russian Federation, announced its withdrawal from the Russian market.

As you know, the Mykolaiv Alumina Refinery, «Pivdencement» and the Transmission System Operator «Mykolaivgaz» became the biggest air polluters in 2021.