THE SOVIET CEMENT INDUSTRY: A CASE STUDY IN SLOWING GROWTH

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• Collection: General CIA Records
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• Document Page Count: 26
• Document Creation Date: December 22, 2016
• Document Release Date: July 28, 2009
• Sequence Number: 3
• Publication Date: April 1, 1984
• Content Type: REPORT

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NGA Review Complete
Directorate of Secret
Intelligence
in Slowing Growth
The Soviet Cement
Industry: A Case Study
Secret
SOV 84-10055
-April 1984
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Directorate of Secret
Intelligence
The Soviet Cement .
Industry: A Case Study
in Slowing Growth
A Research Paper
Economy Division, SOYA,
of Soviet Analysis. Comments and queries are
welcome and may be directed to the Chief, Soviet
This paper was prepared b ffice
Secret
SOV 84-10055
April 1984
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The Soviet Cement
Industry: A Case Study
in Slowing Growth F_
Summary The USSR's emergence as the world's largest cement producer reflects the
Information available industry's importance to the economy, particularly to investment and
as of March 1984 defense programs. Cement is used whenever feasible in construction to
was used in this report.
conserve metals, which are scarcer and more expensive. Moreover, a short
building season encourages factory prefabrication of components, for
which cement is ideal.
Nonetheless, despite its importance to construction and the economy as a
whole, the cement industry-like most Soviet industries-experienced
slower growth during the 1976-83 period than in the entire postwar period;
in three of the years, output decreased. In our judgment, output in 1983
was up 3.2 percent, but this did little more than offset the 1982 decline.
The transportation sector performed better in 1983 and probably contrib-
uted to the industry's improved performance.
During this period, production was responding, in part, to a slowdown in
growth of overall demand as annual increases in new construction slowed
sharply. Moreover, changes in the composition of demand in favor of
difficult-to-produce, high-grade cements-particularly for the military,
nuclear power, and oil and gas drilling sectors-probably strained the
capacity of the industry to sustain growth
Most of the slowdown in growth, however, resulted from mounting
difficulties with raw materials and energy. As in other branches. of
industry, Soviet investment policy has favored construction of finished
production capacity to the relative neglect of developing the requisite raw
materials. Therefore, mineral raw. materials are in short supply and of poor
quality. Industrial byproducts might have substituted for quarry materials,
but production in the industries creating these byproducts-notably metal-
lurgy, electric power, and coal-fell short of targets in recent years.
Moreover, sporadic fuel shortages have been a problem for the energy-
intensive. cement industry. Although many plants now rely on gas,
occasional interruptions in deliveries of fuel and electric power have caused
shutdowns and reduced gains in energy efficiency.
In addition to difficulties in obtaining raw materials and energy, the
cement industry has had to contend with an aging and unbalanced stock of
machinery and equipment:
? A large share of the industry's capital stock was built during post-World
War II reconstruction and is reaching the end of its productive life.
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? Much of the new investment in the industry has been used to build bigger
kilns, while. relatively little has been spent on other aspects of develop-
ment. Large kilns, which illustrate the Soviet proclivity toward bigness,
have proved to be a technological nightmare.
? Shortages of refractory materials and their low quality have increased
equipment shutdowns, which, in turn, increase wear and tear.
The cement industry, like the rest of the economy, also has been affected
by labor shortages, especially a scarcity of skilled workers. While there is
great potential for saving labor by automating more production processes
and materials-handling tasks, the necessary investment has not been made.
A certain incompatibility of basic objectives has also contributed to the
problems of the industry. Soviet planners have pursued four major goals in
recent years: greater and more diversified output, better quality, energy
conservation, and savings in investment costs. Progress in fulfilling one goal
often has been accompanied by frustration in meeting others. Coping with
these trade-offs has shaped decisions and plans for the industry. For
example, substantial energy could be saved if the industry converted to the
more efficient dry-process plants; however, reaching this goal could take
decades and would require very heav new investments at a time of
unusually tight resource allocations
In addition, technological progress in the industry has been hindered by a
lack of integrated research, because of the organizational split between
research institutes specializing in cement, the key raw material for
concrete, and those specializing in concrete, the end product. Even more
obstructive has been the gap between basic research and commercial
application of research findings.
Under the 1981-85 Plan:
? Energy savings are to be obtained by increasing reliance on lower quality
portland slag cement, promoting conversion to more energy-efficient
production techniques (for example, the dry process), and developing new
types of cement.
? Limited investment funds are to be spent to modernize plant and
equipment and to build new, technologically advanced facilities.
? Labor productivity is to be raised by mechanizing repair, transport
loading and unloading, and materials-handling work. More funds are to
be spent to provide amenities for workers to induce them to remain on the
job.
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Completing these tasks over a five-year period would require very large
investments, but Soviet planners have allocated only 1 billion rubles of
investment, only 11 percent above the.previous five-year plan and roughly
0.1 percent of national investment. Sharing such limited funds among
many projects is likely to reduce the effectiveness of the investments
Foreign trade is not a likely alternative for the balance of the decade to cir-
cumvent or solve the industry's problems. Importing raw materials or
cement would prove costly and would strain the already taut transportation
system. Moreover, East European countries, the logical suppliers, probably
cannot, in this decade, expand production beyond their own domestic
needs.
Without foreign trade as an alternative, the intractable domestic problems
of the cement industry-particularly shortages of raw materials and
energy, an inefficient capital stock, and skilled labor shortages-mean that
cement production probably will not return to earlier growth trends, and
output may decrease in some years. These trends will constrain the nation's
ability to accelerate growth in new construction in the 1980s.FI 25X1
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Contents
Summary
Changing Demand
Demand for Higher Quality
6
Shortages of Raw Materials
8
Shortfalls in Energy Supplies
10
Unbalanced Allocations of Fixed Capital
11
Technical Progress Fails To Offset Problems
14
Prospects for the 1980s 17
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Figure 1
USSR: Cement Production, 1950-83
I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I I
0 1950 55 60 65 70 75 80
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The Soviet Cement
Industry: A Case Study
in Slowing Growth
The Soviet Union has become the world's largest
cement producer by rapidly expanding output from
the early post-World War II years to the mid-1970s
(see figure 1 and table 1). As the cement industry
developed, however, the high annual growth rates of
the early years-often over 10 percent a year-could
not be sustained. Beginning with the 1976-80 Plan
period, the rate of growth declined sharply, with the
average annual rate during 1976-82 falling to
0.2 percent per year. Output declined around 3 per-
cent in both 1979 and 1982.' Output in 1983 was up
3.2 percent, but this did little more than offset the
previous year's decline. Moreover, reinforcing this
near stagnation in growth in gross tonnage since the
mid-1970s has been a failure to improve quality and
assortment of output
In the early 1950s, tonnage increased somewhat faster
than value, implying a slight deterioration in the
average quality of cement produced (see table 2).
From 1955 until 1975, the growth in value exceeded
the growth in tonnage by more than a half percentage
point a year, and from 1961 to 1965 by more than
2 percentage points. During 1976-82, however, the
increase in average quality almost halted
What has caused the abrupt deterioration in perform-
ance since the mid-1970s? How are Soviet planners
coping? What are the prospects of restoring the
industry's growth to the rates of the early 1970s? This
paper first gives a brief background and places the
cement industry within the context of the Soviet
economy. Then, the factors holding back the indus-
try's progress are categorized: those determined by
'Output can be measured as either tonnage, or, to capture a change
in composition, value in rubles. Because the average quality of
cement has gradually improved, an index of value of output would
rise more rapidly than an index of physical volume. To produce
high-grade (higher cost) cement requires a more than 1-for-1
decrease in production of lesser grades if everything else remains
constant. Thus, the value of output could increase while tonnage
drops. Unless otherwise noted, output indicators (growth rates) in
Table 1
USSR: Production, Foreign Trade,
and Apparent Consumption of Cement
Thousand
metric tons
Cement
Production
Exports
Imports
Net
Exports
Apparent
Consumption
1971
100,331
3,400
371
3,029
97,302
1972
104,299
2,100
460
1,640
102,659
1973
109,521
3,300
544
2,756
106,765
1974
115,145
3,600
489
3,111
112,034
1976
124,246
2,882
552
2,330
121,916
1977
127,056
3,438
636
2,802
124,254
1978
126,956
3,548
592
2,956
124,000
1979
123,019
3,084
345
2,739
120,280
1980
125,049
3,245
523
2,722
122,327
1981
127,169
2,735
200
2,535
124,634
1982
123,681
2,221
254
1,967
121,714
1983
128,000
NA
NA
NA
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changes in demand and those oriented to supply
considerations. Finally, it discusses Soviet plans to
deal. with the industry's problems and the likelihood of 25X1
success. The use of foreign trade in adjusting to
supply constraints is given special consideration.
Background
Cement is very important to the Soviet economy.
First, the Soviet construction industry depends on
cement more than is the case in other developed
countries because cost and technical considerations
limit the use of steel and nonferrous metals in con-
struction.
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Table 2
USSR: Average Annual Growth
of Cement Production
and Value
output than an equivalent dry-process plant. Although
the dry-process plant uses less energy, it requires
initial higher investment expenditures. The high
energy costs of the 1970s encouraged conversion of
much of the world's cement production to the dry
process. While the Soviet Union also has moved in
that direction, it has done so much too slowly, accord-
ing to some Soviet experts, and lags behind most
1951-55
17.1
16.9
1956-60
15.1
15.8
1961-65
9.7
11.8
1966-70
5.6
6.1
1971-75
5.1
5.6
1976-82
0.2
0.2
Second, Soviet emphasis on precast concrete means
that a large share of the cement is used for products
such as bathroom modules, walls, and even railroad
ties. In 1980 more than 40 percent of all cement
manufactured in the USSR was used in precast
concrete products; in the United States, only
13 percent. Despite the numerous problems in sched-
uling the manufacture and delivery of concrete com-
ponents, the factory assembly of these components
avoids some of the limits imposed by a relatively short
construction season in the USSR. On-site use of
concrete in the frigid weather prevailing for half of
the year in much of the USSR rapidly raises costs and
creates technical difficulties. Special temperature-
control measures are used during the hardening pro-
cess, and extra labor and materials are needed to
prevent the concrete from sinking into the frozen
ground as heat is emitted during the hardening
process.
The cement industry has had four major goals during
the last few years: to increase and diversify output, to
improve quality, to conserve energy, and to minimize
investment requirements. These targets are largely
contradictory. Coping with their trade-offs has affect-
ed technological decisions and plans for the industry.
For example, the technology employed in cement
production is a major determinant of the industry's
performance relative to these goals. Particularly im-
portant is the choice of which basic process to use: the
wet or the dry process (see box, page 4). Wet-process
plants are not as demanding of quality raw materials,
but they use at least one-third more energy per unit of
Western countries (see figure 2 and table 3).
Changing Demand
Our analysis suggests that slower growth in overall
demand was not central to the deceleration in cement
production, but it did have an impact. In particular,
increasing demand for difficult-to-produce specialty
cements probably did contribute to slowing growth.
Further, while requirements for a higher average
quality of cement were not met fully, attempts to meet
them probably lowered production growth. Although
the industry has for a long time been handicapped by
having to produce a wide variety of cement types and
strengths, we judge that an increase in the number of
different cements produced probably explains only a
small part of the difficulties in the cement industry
Overall Demand
A part of the slowdown in the growth of cement
production during the 1976-80 Plan period was'ex-
pected. Cement output was to grow by only
3.4 percent per year during the 1976-80 Plan, a rate
slower than the 5.6 percent growth planned and
5.1 percent achieved for the 1971-75 period. This
reduction in planned growth resulted from slowing
capital investment to less than 3 percent a year-only
one-half of the rate planned for the early 1970s.
However, the Soviets failed to meet even these re-
duced targets in every year since 1976. This contrasts
with the previous plan where the annual target was
reached every year. In fact, performance from 1976 to
1980 was so far below plan that the 1985 target is less
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Figure 2
Shares of Total Cement Production by
Process, 1970 and 1980
Table 3
USSR: Share of Cement Production
by Dry-Process plants
1960
11.2
1965
11.6
1970
11.3
1972
10.8
1973
10.7
1978
1980
Plan 15.0
Actual - 15.0
16.9-18.0
21.0-22.0
Dry process
Wet process
0 20
Percent
derfulfilled by 20 million tons.
Demand for Wider Assortment ,r
The problems of the cement industry result partly
from the large assortment of products included within
three basic types of cement (see box, page 7 and table
4). The use of a variety of types and strengths has
both advantages and disadvantages. The Soviets can
economize by using low-quality cement for those
applications where strength is not a consideration and
can customize cement to its application. The prolifer-
ation of cement types and strengths, however, in-
creases the need for cement storage facilities, slows
the packing and transportation process, and requires
more adjustments and interruptions to a smooth
rhythm of production. Moreover, even if a smooth
production flow is maintained, storage or transport
bottlenecks often have forced using a high-quality
product where low quality would be suitable or the
mixing of various grades of cement, thereby raising
average cost per unit of construction and causing 25X1
bottlenecks at other construction sites where higher
quality cement usage was targeted. On balance, under
Soviet conditions, where price and profit incentives25X1
are absent, the practical disadvantages of a large
assortment probably outweigh the presumed benefits.
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The demand for specialty cement appears to have
increased during the 1970s. In particular, require-
ments of the military as well as the electric power, oil,
and gas industries have raised demand for cements
that are more difficult to produce. These special
requirements have contributed to holding back the
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Cement is produced by combining limestone, clay,
gypsum, and other additives in defined proportions.
Production can be divided into five stages: extracting
the raw materials, preparing the raw material mix-
ture, firing the mixture, grinding the material into the
final product, and storing, packing, and distribution.
Figure 3 shows the wet process production.
The raw materials are mined in two basic ways. Soft
inputs, such as chalk and clay, are extracted by using
a high-pressure stream of water. Harder substances,
such as limestone, are mined in quarries by first
stripping the overburden from the materials, loosen-
ing the rocks with explosives, and then loading the
fragments into a dumptruck or railcar.
At the second stage, the technique varies with the
process.
The geologic properties of the
available quarry materials in turn help determine
which process is selected. Materials with natural
moisture, heterogeneous chemical properties, or that
mix easily in water are most appropriate for the wet
process. The dry process is most suited to materials
possessing low natural moisture, homogeneous chem-
ical composition, and low alkali content. Geologic
criteria alone would indicate that most of the cement
industry should be wet process, as indeed it is.=
The raw material mixture stage in a wet process
plant combines the quarry materials in a slurry
consisting of about 40 percent water. After the slurry
growth in cement output by consuming a dispropor-
tionate share of the resources available to the indus-
try. Because the growth of military construction has
exceeded the growth of cement production since the
slowdown began in the cement industry, direct de-
fense requirements probably have imposed an ever-
increasing burden.' Military construction peaked in
' Military construction entails facilities directly supporting weapon
systems and personnel (silos, airfields, and barracks) and those that
increase combat readiness and endurance (personnel support struc-
tures, maintenance buildings, and vehicle, POL, and ammunition
storage facilities). This measure excludes construction of factories
is ground and crushed in mills, it is pumped into
cylindrical basins for stirring, adjusting of chemical
proportions, and storing. In contrast, dry process
plants dry the quarry materials before grinding and
mixing to create a mixture that is warmed in pre-
heaters before entering the kiln. F_~
The firing phase for each process begins with the
entry of the raw materials into a cylindrical rotary
kiln. Some of these extremely large Soviet kilns are
nearly two football fields long. Because the rotary
kiln is the largest and most expensive piece of
equipment, it is generally the key element in any
cement plant and the source of many problems. The
kilns are inclined at a slight angle and rotate slowly
so that the centrifugal and gravitational action forces
the raw'materials to pass through the kiln where they
are burned at temperatures over 1,400 degrees C. The
small pellets that exit from the kiln-called
clinker-then pass'through coolers.
Next the clinker is mixed and ground with gypsum in
varying proportions to achieve the desired cement
properties. Other ingredients-including blast fur-
nace slag, fly ash, and other substances-may be
added to give the cement special properties. After
final grinding, the cement is stored in silos for a few
days for further cooling before being packed in bags
or shipped in bulk to the destination
1970, declined until 1975, and resumed an upward
trend during the 1976-80 Plan period (see figure 5).
Military-related construction in 1980 was 16 percent
above the 1975 level. The military is a major consum-
er of the high-strength cements for missile silos, silo
cores, airfields, and many other projects. High-
strength cements require special handling and stor-
age, which the Soviets are often unable to provide; the
resulting high losses from spoilage cause the demand
for these cements to have a disproportionately higher
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Figure 3
Production of Portland Cement by the Wet Process
1. Limestone from the quarry.
2. Crushing for limestone.
3. Clay from the quarry.
4. Water.
5. Basin for mixing the clay.
6. Raw material mill.
7. Slurry basin.
8. Rotary kiln.
9. Cooler.
10. Coal warehouse.
Source: V. N. Kropotov, A. G. Zaytsev, B. 1. Skavronskiy, Stroitel'niye
Materiali, (Visshaya Shkola; Moscow, 1973), p. 135.
11. Elevator for feeding coal from the crusher to a bunker.
12. Drying cylinder for coal.
13. Coal mill.
14. Pump for feeding coal dust.
15. Gypsum storage.
16. Elevator for feeding gypsum from the crusher to a bunker.
17. Clinker storage.
18. Ball mill.
19. Cement silos.
20. Packaging.
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claim on total cement resources (see box, page 8). In
addition, the higher clinker content and finer grinding
require substantially increased energy use. To satisfy
these demands from the military, cement producers in
some cases have had to reduce their overall output.F_
Demand for Higher Quality
Since the early days of postwar reconstruction, Soviet
planners have struggled to improve the quality of
cement. However, progress has been too slow to
account for the slowdown in the growth of production
tonnage, as a comparison of the rates of growth of
cement production measured in tons and in value
(with individual grades of cement valued in constant
prices) shows (see table 2).
Additional improvements in strength have become
progressively difficult. To replace I million tons of
Mark 300 cement by an equal amount of Mark 400
requires an extra 140,000 to 160,000 tons of clinker,
30,000 to 35,000 tons of fuel, and 5 million rubles of
investment. Shifting production to even higher
strengths causes disproportionate increases in costs.
Offsetting these costs is the fact that increased
strength lessens the amount of cement that is needed.
In many types of construction, increasing strength by.
one mark permits a 15-percent reduction of cement.
Like the military, the nuclear power industry requires
high-quality cement, which it uses for containment
buildings and other heavy-duty structures at nuclear
plants. Such construction requires special polymer
cements to reduce the possibilities of cracks and leaks,
especially where temperatures are extremely cold or
fluctuate widely. Construction of nuclear plants accel-
erated after 1975; investment in nuclear power plants
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Basic Types of Cement
Three basic types of cement are relevant to the
analysis in this report: portland, portland slag, and
portland pozzolan. Portland cement, the most com-
mon cement produced in the USSR, has grown in
importance as the Soviets have tried to improve
product quality. (In the United States, portland
cement accounts for more than 90 percent of output.
To stretch supplies, the Soviets produce ordinary
portland cement in two forms: unadulterated and
adulterated using about 15 percent of other materi-
als, including natural minerals and artificial sub-
stances such as blast furnace slag, alumina waste
products, or fly ash.
Although it is cheaper to produce than ordinary
portland cement, slag cement has diminished in im-
portance during the last two decades because of its
relatively low strength in the face of rising require-
ments for higher quality cements. It is even less
suitable in the USSR than in the industrial West
because it does not stand up well under cold tempera-
tures
Portland pozzolan cement mixes clinker with various
minerals and burnt clay or fly ash. Generally consid-
ered inferior, it is even more costly than slag cement.
Its use is confined to some special construction, such
as underwater and underground, where the concrete
is exposed to considerable moisture
A key measure of cement quality is its compressive
strength after 28 days. In the Soviet Union, the
cement is tested and then given a "mark"-its
strength measured in kilograms of pressure per
square centimeter. A higher mark indicates higher
strength. Strength can be increased in three ways:
higher clinker content, finer grinding, or the injection
of special additives.
during 1976-80, was about 2.5 times the level of the
first half of the decade.
Meanwhile, the rising volume of oil prospecting and.
drilling from 1975 to 1980 increased requirements for
a special oil well,cement. Its production grew 5
percent a year during this period, although periodic
Figure 5
USSR: Growth in Military Construction
Expenditures, 1965-828
0 1965
shortages have hampered oil and gas exploration. Oil
well cement sets slowly so that it can be pumped down
into the wells, harden rapidly, and withstand high
pressures. Growth in production of oil well cement,
because of its special requirements, may also have
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inhibited the overall growth of production in the
1976-80 period.
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The steady growth in demand for high-quality cement
from the military construction, nuclear, and oil and
gas sectors implies a decrease in the quality of cement
for residual users, since the average annual rates of
growth in tons and value were the same during 1976-
82 (0.2 percent, table 2).0 25X1
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Although the changing nature of demand for cement
played a role in the deteriorating production figures,
we judge the main problems are on the supply side. In
particular, constraints on raw materials, energy, capi-
tal, and labor played varying roles in the production
slowdown.
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Not only is the Soviet Union the worlds largest
producer of cement, it probably is also the largest
waster of cement. According to a 1982 article in
Stroitel'naya gazeta, about one-eighth of all cement
produced is lost, spoiled, or stolen before it can be
used. One Soviet expert has equated these losses to
the annual output of five to eight large cement plants,
or the amount of cement used to produce 1.3 million
dwelling units. Of course, stolen cement (for example,
that used in the construction of private homes) is not
"wasted. " However, from the viewpoint of the state
planner, it results in bottlenecks and disruptions in
Because there has been a longstanding shortage of
appropriate conveyances for transporting cement, the
transportation sector is the chief culprit in this tale of
waste. Cement usually has been transported in open
vehicles, primarily trucks and hopper cars, that do
not provide appropriate protection against the ele-
ments. In a recent year, more than 80 percent of
cement was transported by rail, and three-fourths of
that was carried in open rolling stock. As a result,
large quantities of cement either blow away or leak
from their conveyances or are exposed to rain and
snow, which reduce quality. Occasionally, jackham-
mers have been necessary to empty trucks of hard-
ened cement. The notorious delays and wasteful
crosshauling in the transportation system compound
these problems. (Crosshauling occurs when a product
is shipped to a location while an equivalent product is
shipped the opposite direction.) Because of their
greater perishability, higher grade cements are even
more vulnerable to transportation problems, and the
ensuing spoilage is even more significant. The large
amount of wastage suggests that cement consumption
could increase considerably without an expansion in
output if the transportation problems could be cor-
rected. However, no significant changes seem likely.
Shortages of Raw Materials
We judge that dwindling supplies and deteriorating
quality of raw materials-including quarry minerals,
industrial byproducts, and special additives-have
been the principal cause of the slowdown in the
cement industry. Because cement technology presents
few opportunities for reducing raw material use per
unit of output, production cannot increase without
nearly proportional increases in raw material supplies.
Complaints concerning the absence or poor quality of
raw materials have been frequent in the industry
journals. According to one Soviet study, raw material
shortages accounted for nearly one-tenth of the drop
in output in 1979. Another one-third of the decline in
production resulted from difficulties in processing the
raw materials, which in, turn reflected use of low-
quality minerals as increasingly marginal sources
were exploited (see box, page 9).
The Soviets, as they have with other extractive indus-
tries, are paying for planning errors in neglecting to
develop raw material deposits. The use of quarry
materials has outstripped the discovery of new depos-
its and created bottlenecks. In 1981, for example,
gypsum shortages impeded production at several
plants.
Quarries are becoming depleted. Increasing average
plant size has accelerated the depletion of quarry
reserves. Most of the expansion in capacity has been
obtained by expanding plants rather than by building
new plants close to new supplies. This tactic means
that in a specific location a limited amount of miner-
als is now thinly spread among more kilns. The
Soviets, believing that large cement plants are more
efficient than small ones, prefer plants in the range of
2-3 million tons a year, or more than four times the
size of the average plant in the.United States. But
only about one-half of the current quarries can sup-
port plants of this size.'
The minerals needed for cement are not uncommon,
but the deposits are seldom concentrated in amounts
adequate for commercial exploitation. The only way
to increase reserves at existing plantsites.to acceptable
? To compensate for inadequate mineral reserves nearby, cement
plants could obtain minerals from other sources. If distant quarries
were used, transport costs would rise, further burdening an overex-
tended rail network. These minerals, moreover, have low value
relative to other freight, and the low priority accorded them would
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Secret
Why 1979 Was a Bad Year for the Soviet Cement
Industry
In 1979 the value of cement production, for the first
time since 1950, fell below the level of the previous
year (down 3.1 percent). Official Soviet statistics
indicate that average strength of the cement also
declined, although by a lesser amount. This unprece-
dented decline received considerable attention in the
pages of Tsement, the industry journal. One author
assessed the relative importance of problems in vari-
ous parts of the work flow:
Burning the clinker 15
Grinding the cement 15
Measuring the components 12
Working the equipment 10
Lacking raw materials and other cement components 9
Transporting the products 5
Total 100
The percentage distribution represents the number of
times each stage of production figured in production
failures, but it does not necessarily correspond to the
relative importance of each factor in the national
slowdown in cement production. Although the author
was referring to problem areas for 1979, this list
provides a menu of the endemic problems facing the
industry.
supplies of minerals, but they are in short supply
because of shortfalls in metals production and the
decline in the use of coal to generate electricity.
Seventeen cement plants (about 15 percent of the
total) are near iron and steel facilities, and most new
cement plants are required to find similar locations.
The ministries producing these byproducts, however,
have been criticized for not cooperating with the
cement industry; such cooperation diverts resources
from contributing to the most important element of
their own plan and increases competition for the
limited quantities of railroad rolling stock
Even if these byproducts were freely available, the
cement industry would need to make other adjust-
ments. The byproducts are harder to heat than quarry
minerals because of their lower plasticity and cohe-
sion; and more modifications must be made during
production to deal with nonuniform composition. Sin-
tering or agglomeration might be employed to prepro-
cess these byproducts, as the ferrous metals industry
beneficiates iron ore, but the question would arise as
to which ministry would pay for such processing at a
time when investment funds are unusually tight.
Special additives also have become scarce. In 1981,
for example, an extreme shortage of SNV, an essen-
tial resinous additive for cement exposed to extreme
cold, restrained production. The Tikhvinskiy Wood
Chemical Plant, the only SNV production facility,
met only 60 percent of its 1981 plan goal. Moreover,
the plant indicated to central authorities that it will
eventually halt SNV production entirely, probably
levels. is to increase the depth of excavation, but doing
so doubles or triples costs per ton. In addition, the
requirements that dry-process plants place on the
composition of the raw material base-low-moisture
content and homogeneous composition-are so strin-
gent that they are found at less than 10 percent
of operational deposits in the USSR and at only
4 percent of explored deposits, according to analysis in
Industrial byproducts-such as slag from the ferrous
metals industry, some waste products from the non-
ferrous metals industry, and fly ash from electric
power plants-could help compensate for inadequate
because of the small contribution it makes toward
meeting the plant's ruble output goal. Perhaps as an
indication of disarray in the planning process, the
Ministry of Pulp and Paper refuses to make the only
alternative substitute.
In many cases the Soviets have not provided ade-
quately for long-term availability of mineral supplies
at specific locations. In selecting a site for a plant,
Soviet cement experts are supposed to require that the
plant's quarry have at least 30 years of reserves; in US
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practice, 50 years of reserves are considered necessary
for a plant to be economically feasible. The Soviets
have not always adhered to even the 30-year rule; at
least two plants were built with only seven years of
reserves.
Shortfalls in Energy Supplies
Energy is no less important than the basic raw
materials in the production of cement. One of the
most energy-intensive industries in the USSR, cement
accounts for 1 percent of domestic fuel consumption
(2.5 percent of gas consumption) and about 1 percent
of electric power generation. Some four-fifths of the
energy is used for burning clinker; most of the
remainder is used for crushing and grinding.
Sporadic shortages of coal, gas, oil, and electric power
have all been blamed by industry managers, economic
officials, and the Soviet press for periodic bottlenecks
and resulting slowing of industrial production growth
during the last few years. As in other industries, the
core of the energy problem for the cement industry is
not the overall level of supply but the interruptions in
delivery. For example, gas supplies to many industrial
customers frequently are curtailed or even halted
during winter, forcing either a production stoppage or
a shift to less efficient fuels (see box).
Meanwhile, growth in fuel efficiency slowed some-
what before the slowdown in the growth of output.'
Failure to meet planners' targets for growth in fuel
efficiency has led to overuse of energy and, thus, has
contributed to the imbalance between fuel supply and
requirements. The fuel used per ton of clinker de-
clined by more than 1 percent a year until 1974 (table
5). Except for the 1966-70 period, energy efficiency in
cement production improved more slowly than for
clinker, because the clinker content in cement was
increased to improve the quality of the product. Most
of the improvement in fuel productivity resulted from
a dramatic shift in the structure of fuel use by the
industry (table 6). During the 1960s and early 1970s,
the industry decreased its reliance on coal, replacing
coal with more efficient gas and oil. Oil, for example,
' Fuel efficiency is measured in terms of the caloric content of fuel
that is consumed per ton of output, where output is measured as
either clinker or cement. The rate of growth varies depending on
whether cement or clinker is used as the output measure, because
Problems Caused by Energy Interruptions
Interruptions in energy supplies to cement producers,
especially during winter, create various difficulties.
For example, Soviet cement plants in winter face a
trade-off similar to that of US plants, which must
choose between using 15 percent more energy to keep
output constant and to offset heat, loss or cutting
production by 10 percent to keep energy use constant.
Reduced deliveries of electric power would stop
grinding operations and eventually force kiln shut-
downs. More than a few days of production would be
lost. Stopping and raring a kiln shortens the life of
the refractory materials used in the kilns and causes
more frequent shutdowns for repair and relining. An
unanticipated shutdown causes even more damage
than one for which there is warning. Restarting a kiln
in a wet process plant during the winter is extremely
difficult because of freezing of raw materials, the
bearings in the gear mechanism, or both.
requires only 70 percent of the caloric content of coal
to make cement.
The growth of energy efficiency slowed and in some
cases actually stopped after 1973:
e Fuel efficiency per ton of clinker did not improve
during 1974 and 1975 and managed less than one-
half of its 1961-73 annual growth during 1976-80.
o Fuel efficiency per ton of cement decreased from
1974 to 1980.
o The efficiency of electricity use in producing cement
also decreased after 1972.
Apparently the improvements in energy efficiency
characteristic of the 1960s were driven by a shift in
fuel mix from coal to gas and oil. Once the transition
had ended, the cause of increased efficiency was
removed. The rising average age of plant and equip-
ment in the industry also has pushed up fuel require-
ments. During the late 1970s, moreover, the raw-
materials bottlenecks, the lower quality of inputs, and
the frequent shutdowns for equipment repair tended
to offset slight technical improvements in energy
efficiency so that the overall effect per ton of cement
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Table 4
USSR:
Cement Production by Type
Percent of
total production
Table 5
USSR: Energy Efficiency
in the Cement Industry a
Portland
51.9 44.6
63.9
68.1 66.5
Per Metric Ton of
Clinker
Per Metric Ton of
Cement
Portland slag
32.1 36.5
27.4
27.1 28.5 a
Produced
Produced
Portland pozzolan
11.5 17.1
6.8
3.6 3.6-
Other
4.5 1.8
1.9
1.2 1.4 a
was a loss in efficiency. Soviet cement experts are
trying to reverse this deterioration in the current five-
year plan; fuel efficiency per ton of clinker is to grow
at double the 1976-80 rate. Although plans for fuel
efficiency per ton of cement have not been announced,
the goal for clinker and the intention to lower the
clinker content of cement suggests that the planners
are hoping for major gains in fuel efficiency for
cement. With the effects of fuel substitution (gas and
oil for coal) already realized, new technology and the
conversion of the industry to the dry process are the
remaining factors that would lead to greater energy
efficiency. We doubt that they will be implemented
sufficiently during the next few years to do so.=
Unbalanced Allocations of Fixed Capital
Although capital productivity in the cement industry
declined throughout the 1970s, the rate of decline
accelerated during the last half of the decade-as it
did in most Soviet industries. Evidence in Soviet
technical journals shows that after declining by al-
most 1 percent a year from 1971 to 1975, capital
productivity fell by more than 4 percent a year
thereafter. Soviet authors have blamed the decline in
output per ruble of plant and equipment on the
inadequate supplies of raw materials (especially min-
erals and energy as discussed earlier) and unbalanced
1974-75
0.0
0.8
1976-80
-0.4
0.2
1981-85 plan
-0.8
1986-90 plan
-0.6
Electric Power Consumption Per Metric
Ton of Cement Produced
1966-72
-0.4
1973-75
+0.2
1976-80
+0.2
a Average annual percentage rate of change in energy consumption
per unit of output.
Note: A negative (positive) sign indicates less (more) energy is used
per unit of output.
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reasons, cement plants usually are designed with
excess capacity in the grinding and crushing mills to
assure the continuous flow of material to the kilns,
and in storage facilities for intermediate materials
and finished production. Soviet planners built addi-
tional kilns without a requisite expansion of capacity
on either end of the production process. Thus, a plant
must quickly shut down its kilns, if:
? A temporary breakdown in a mill causes slurry to
back up in the production flow.
? Storage capacity is filled.
? Railroad freight cars-often in short supply-are
not available.
development of the industry's capital stock.
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Because of the size and high cost of rotary kilns, they
have received an inordinate share of the investment
while other elements have been neglected. As indicat-
ed above, inadequate investment in quarries has re-
duced the availability of raw material. For technical
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The priority given to investment in kilns also has
diverted resources away from equipment that could
automate the industry and improve the quality of the
product. For example, instruments for measuring
chemical composition and quality control are often
absent or obsolete; the industry's technical journal,
Tsement, pointed out that lack of this equipment is
responsible for 12 percent of the instances of unac-
ceptable quality in 1979. New pumps and material-
handling equipment have likewise been accorded a
low priority.
The growing age of the capital stock also has ham-
pered capital productivity. In 1976, 30 cement
plants-about one-fourth of the total-were still us-
ing equipment that had been fully amortized 10 years
earlier. The planned life of a rotary kiln is 25 years.
By comparing the age structures for 1972 and 1980
(table 7), we can identify the structural shift during
the period when cement production was faltering.
Between 1972 and 1980 the average age of kilns
increased by at least 20 percent or by three years.
Most kilns were built during the surge in cement
output during the 1950s and early 1960s and are
nearing the end of their productive lives. Thus, be-
tween 1972 and 1980, the share of kilns that has
exceeded or is.nearing the end of its planned life
doubled.
Despite the inordinate investment given to kilns in
recent years, the older kilns have, for the most part,
not been scrapped. Older kilns technically are less
productive than newer ones. However, the problems in
getting the new kilns on stream have depressed pro-
ductivity. Soviet literature has reported many prob-
lems in mastering dry kilns and 170-meter and 185-
meter wet kilns. Use of these types of new kilns is only
about 80 percent that of kilns more than five years
old, partly because they require considerably more
repair, maintenance, and refractory relining than the
smaller ones. Devoting a larger share of capacity to
the less reliable, high-capacity kilns puts more eggs in
fewer baskets
Another reason for retaining older kilns is that appar-
ently the new, larger kilns have uneven burning zones
that lower the quality of the clinker and prevent the
production of better quality cement. The older kilns
must be used for these products.
Table 6
USSR: Distribution of Fuel Use
in the Cement Industry
Gas
Oil
Coal
Shale and
Others
1960
38
8
53
1
1965
57
16
25
2
1970
61
14
23
2
1972
60
18
21
1
1980
60
408
a
a For 1980, Soviet technical literature has published only the
relative importance of gas to the cement industry. The other fuels
are combined in one group.
The reason for the extensive repair requirements for
the large kilns seems to be the failure to solve many
technological problems before the plants came on-
stream. For example, the Soviets' inability to produce
the required high-grade steel means that the walls of
the 185-meter kilns must be twice as thick as desir-
able. This inordinate weight causes the wheels and
turning mechanism to require frequent repairs, lead-
ing to a. rising average proportion of downtime. Also,
because of the increased length of the kiln, winter
winds lead to uneven kiln temperature resulting in
"bowing" of the whole kiln. Redesigning the kilns to
correct the problems requires development of special
bearings and subassemblies to cope with the tremen-
dous stresses these huge kilns must endure as a result
of the modifications.
enced by the industry in a recent year.
The grinding mills also have become increasingly
obsolete. Their planned service life is 12 years, but, by
1972, 74 percent had surpassed this span. Improve-
ments in cement quality due to finer grinding are
expensive, because the Soviets use an older grinding
method requiring a large increase in electric power
consumption to improve quality. Problems with grind-
ers accounted for 15 percent of the problems experi-
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Table 7
USSR: Distribution of Rotary Kilns,
by Age
O to 5 years
5 to 10 years
10 to 20 years
More than 20 years
7 5
15 9
52 34
26 52
Refractory materials have-been in short supply for
several reasons:
? Shortages of the most heat-resistant refractories
have forced reliance on less durable materials.
? The growing share of both large kilns and old kilns
in the national stock places more emphasis on kilns
that are heavy users of refractory materials.
? More frequent shutdowns because of fuel and raw
material shortages and kiln breakdowns in recent
years have reduced the working life of refractory
materials.
? Growth of refractory output has been nearly flat 25X1
since 1975
The rising share of investment given to equipment for
environmental protection has further depressed capi-
tal productivity. Although cement production is a
major source of air pollution, the Soviets spent little
on pollution before the 1970s. During 1971-75, out-
lays on pollution control devices in the construction
materials industry-primarily in cement produc-
tion-rose to 63 million rubles. This amount increased
by about 50 percent during the 1976-80 Plan period.
If we again assume that most of these outlays went to
the cement industry, then more than 10 percent of
capital investment for new plant and equipment dur-
ing the last half of the 1970s was spent on pollution
control devices with no increase in output
Shortages of high-quality refractory materials, which
are used to line rotary kilns to protect them from
intense heat, have caused an increase in kiln down-
time. These materials must be replaced or repaired
periodically, during which time the kiln is shut down.
Shutdowns are particularly lengthy for the largest
kilns; the losses in a recent year were equivalent to
stopping three kilns for an .entire year (and losing 3
million tons of output). The scarcity of supplies has
forced many cement plants to stop checking the
refractory bricks for quality because there are no
extra bricks to replace those that might be rejected.
The poor quality of the received material is blamed
for one-fourth of kiln shutdowns. For at least one
major cement combine, the average length of a kiln
run dropped by nearly 20 percent in 1979. For many
of the 185-meter kilns, the average kiln operating
time has fallen to one-third of its 1974 level.F_~
Labor Shortages
The cement industry-like most of the economy-is
suffering from labor shortages, especially for skilled
workers. Moreover, the industry is considerably more
labor intensive than in other countries. Western plants
have mechanized a large share of auxiliary work,
including transport (both within and outside the
plant), warehousing, materials handling, maintenance,
and repair. In the USSR this work is performed
manually for the most part and accounts for more
than 50 percent of employment in the industry. Even
where work has been automated, the unreliability of
the automated equipment has discouraged manage-
ment from releasing these workers for other tasks.L
Cement industry experts attribute the high labor
turnover to inadequate investment in social infrastruc-
ture, such as housing, vacation resorts, and social
activity buildings. The share of such investment in
total investment was 22 percent in 1960 but had fallen
to 15 percent by 1979. According to a Soviet industry
expert, a share of at least 25 percent is needed to
prevent excessive turnover. Even if the necessary
funds were available and had the desired effect, the
turnover problem is endemic to industry, so at best
such an investment policy would divert labor from
other industry.
The shortage of skilled repair workers has been cited
as the main reason many plants are operating below
capacity. The use of unqualified workers has caused
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the quality of repair services to deteriorate substan-
tially during the last few years. Machine downtime
usually exceeds plan levels, but, in the last five years,
the difference between planned and actual downtime
has widened. The amount of downtime for the larger
kilns has increased by 30 to 40 percent since 1975. A
lack of spare parts has prolonged repair periods. At
least 25 percent of industrial accidents in the cement
industry have been blamed on poor-quality spare
parts. In one case, low-quality bearings forced a
sudden kiln shutdown that destroyed the refractory
lining and deformed the kiln only a few days after
major repairs had been made. In another case one
large kiln was down more than half a year because of
accidents, most of them caused by poor repairs.
Although the number of repair workers grew rapidly
during 1976-80, the number and average skill level
per ruble of capital stock declined. Further, the
demand for repair work has increased faster than
additions to plant and equipment. In contrast to
smaller and newer kilns, aging equipment requires
proportionately more repairs, as do the large kilns.
The shortage of repair workers, especially with the
relevant training and experience, prolongs downtime
and diverts workers from performing scheduled re-
pairs and maintenance and even kiln relining. The
long-run effect of this neglect-found practically
throughout Soviet industry-is to increase the inci-
dence of machinery breakdowns. Although repair
workers make up about one-fifth of the industry, V. S.
Karelin of the Scientific Research Institute of the
Cement Industry argues that 30 to 40 percent of the
labor force should be devoted to repair.
Cement plant managers, in, adjusting to labor short-
ages, have curtailed their staffs of repair workers,
employing them instead in production, and then sub-
contracting the repairs. Centralized repair trusts per-
form more than 70 percent of capital repairs. These
trusts, however, also are understaffed, so that cement
plants lose production time while awaiting the arrival
of roving repair teams. According to Soviet studies,
plant capacity use is considerably lower at plants that
rely on contracted repairs than in plants that do their
own repairs.
Technical Progress Fails To Offset Problems
Research on cement is performed by the Ministry of
Construction Materials, and research on concrete is
conducted by the Ministry of Construction. This
separation in R&D has had some unfortunate conse-
quences for the industry. One cement research proj-
ect, for example, developed ways to .reduce fuel use
during 'production but failed to allow for the resultant
prolongation of hardening times that resulted in even
greater consumption of fuel
The pilot research plants, furthermore, deal either
with developing new properties for cement or with
plant applications. No institutions bridge the gap.
Research institutes have made substantial progress,
for example, in developing polymer cements, but
introducing these cements into commercial production
has been extremely sluggish. Quick-hardening ce-
ments were developed 10 years ago but still are
produced only in negligible quantities. Sometimes
research funds have been spent in areas with no
clearly commercial applications. These practices have
slowed the introduction of new technology
A recent article in Trud, entitled "The Price of a
Mistake," detailed the failure of the cement industry
to implement dry-process technology. In the late
1960s, several research institutes worked out this new
technology. By 1982, only one plant had successfully
introduced it; two had achieved only 50 to 60 percent
of design capacity; and three were under construction
for five years and are now nearing completion.
In another case, several years of research developing a
process to restore the strength of cement went for
naught because of a lack of components. Although
Soviet cement should be used within two months,=
this seldom happens,
and reportedly more than 70 percent of cement is
significantly below its optimal strength by the time of
its use. Nonetheless, the research project that discov-
ered an energy-efficient way to restore cement
strength using electromagnetic devices was canceled
because the necessary components were available only
to the Ministry of Defense.
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Soviet planners and policymakers are well aware of
the shortcomings of the cement industry. They have
responded by setting goals for increased output, im-
proved quality, and energy savings, but have allocated
only token increases in investment.
1981-85 Plan
Cement production is planned to increase by 16
million tons by 1985, an average of 2.4 percent a year
from 1980. This represented a considerable accelera-
tion from the annual growth of 0.5 percent a year
recorded during the last half of the 1970s. Two years
into the plan, however, output was 1 million tons less
than in 1980. By the beginning of 1984, production
was only 3 million tons more than in 1980. To.reach
the 1985 goal would require production increases of
more than 5 percent a year in 1984 and 1985. The
five-year plan calls for no further increase in average
cement strength, perhaps an official recognition that
further increases in quality would impose heavy ener-
gy costs and limit the tonnage availability of cement.
This curb on average quality increase will penalize the
lower priority consumers, because deliveries of high-
quality cement to the military, nuclear power, and oil
and gas industries probably will continue to increase.
However, sacrificing strength to boost output exacts a
toll on the economy, because more low-quality cement
is needed to complete a construction project, and the
project will require more repairs and have a shorter
lifetime.
Raw Materials. Several steps are slated to ease the
raw material shortages. According to the five-year
plan, about one-sixth of the industry's capital invest-
ment is to go to opening new quarries or expanding
existing ones. In addition, the ministry responsible for
cement production will seek to share quarries with
other ministries, thereby saving investment funds.
Currently, 80 percent of quarry work is performed
solely for the ministry in charge at a given location-
for example, the Ministries of Construction Materials,
Ferrous Metals, and Nonferrous Metals. One cement
industry source estimated that nearly one-half the .
industry's mineral requirements could be met if it
could share the quarries of other ministries. In partic-
ular, the ferrous and nonferrous metals industries are
prime candidates for cooperation because of the com-
patibility of their, geologic characteristics. Such a
symbiotic relationship has a certain logic, but seems
unlikely to work. First, interministerial cooperation
probably requires a new system of incentives that
would weaken the role of the ministries. Second,
either the distance between quarry and existing 25X1
cement plants would increase, putting even more
pressure on the strained transportation sector, or new
plants would have to be constructed near these depos-
its. Increased use of industrial byproducts is an
alternative that also has been considered. The draw-
back here, however, is that the key products-slag
and fly ash-are in increasingly tight supply.
Energy. One goal of the 1981-85 Plan is to raise 25X1
energy. efficiency in the cement industry by 0.5 to 0.8
percent a year. Achievement of this objective depends
on three basic elements: use of more byproducts to
lower the cement's clinker content, increase of the
share of dry-process plants, and development of new
types of low-energy or clinkerless cements.
Reducing clinker content depends on meeting the
goals for increasing the share of portland slag
cement-27 percent in 1980 to 30 percent by 1990.
Such dependence reverses earlier deemphasis of port-
land slag cement as a way to improve the overall
quality of cement. This new policy may be shortsight-
ed, because it could lead to higher rather than lower
energy costs; additional energy is re uired to turn the
cement into concrete.6 25X1
Conversion to the dry process is the most effective
way to increase energy efficiency by 1985. In addition
to the energy savings in the kiln, the dry process
allows the introduction of preheaters, which yield
significant energy savings. Despite recurrent calls to
boost the share of dry-process plants, the conversion
' For example, the strength of slag cement is less than ordinary
portland cement, the cement does not set as rapidly (so its use in
precast concrete fabrication causes problems), and slag cement does
not withstand cold temperatures very well. To compensate for the
slow hardening, special additives and processes are required. Their
production, in turn, uses more energy than that saved by producing
portland slag cement rather than other cements.F___1
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program has not really taken effect (table 3)-certain-
ly not as rapidly as it has in most Western countries
during the last 10 years (figure 2). Although geologic
considerations would support the preponderance of
wet-process plants, technological difficulties and in-
vestment stringencies seem to be mainly responsible
for the delay in introducing dry-process kilns. Con-
verting wet-process plants or building new dry-process
plants requires large investment expenditures at a
time when investment allocations are tight. Further-
more, conversion requires at least three years, and
production is reduced by 25 percent during that time.
The theoretical maximum share for the dry process in
the USSR is unknown, but Soviet cement experts
agree that there is considerable room for improve-
ment
Capital. The cement industry is to receive 1 billion
rubles for investment during the 1981-85 plan period,
roughly an 11-percent boost over the last half of the
1970s. There was a heated discussion in a 1979 issue
of Tsement over how these limited funds are to be
apportioned, with at least three schools of thought.
Some favor modernizing wet-process plants, others
building dry-process plants, and a third group con-
verting wet-process plants to the dry process. A
second debate centers on the order in which improve-
ments should be made. One group argues that the
smaller, older kilns should receive attention first
because they are the least efficient. The other side
submits that the newer, bigger kilns should receive
priority because of their much greater impact on
overall output. However these discussions turn out, we
do not believe that the investment is sufficient to
significantly modernize the industry's capital stock or
to halt the decline in capital productivity.
Labor. The cement industry is to receive little, if any,
increase in labor. Industry leaders hope to use the
existing labor force more efficiently and are planning
an average annual increase of 2.4 percent in labor
productivity during the 1981-85 period, nearly 2.5
times the rate achieved in the 1976-80 period.
To accomplish this acceleration in the growth of labor
productivity, the Soviets are relying on many of the
same factors as planned for other sectors of industry:
investment in high-productivity machinery; mechani-
zation of repair work, auxiliary tasks, and materials-
handling and freight-handling operations; introduc-
tion of automated control; improved social and
cultural conditions; and reduced labor turnover. Be-
cause most of these factors depend on higher rates of
growth of capital investment than is slated, the likeli-
hood of a spurt in labor productivity is scant.
Foreign Trade as an Option
Foreign trade is always an option the Soviets could
choose to relieve domestic shortages; they could:
? Import the raw materials.
? Import cement.
? Cut exports and retain more for domestic
consumption.
? Import Western machinery and technology as a way
to ease difficulties in the cement production process.
We believe that importing the raw materials used for
the cement production process is not feasible. Raw
materials are bulky and expensive to ship, given the
large amounts and long distances required. In addi-
tion, using foreign sources of raw materials would
ease only one of many bottlenecks affecting this
industry.
The Soviets could import the final product-
cement-thereby avoiding the need to produce ever-
increasing amounts of cement. Here too, however,
there are important constraints. Like raw materials,
cement is bulky and expensive to ship long distances.
In the United States, for example, rather than a
national market for cement, there is a network of
small regional markets. Because cement is perishable,
it must be shipped in special railroad cars. The
shortage of these cars makes imports from long
distances impractical, especially with the already
heavy burden on the Soviet transportation system.
Thus, the opportunities to import cement usually are
limited to small volumes of special cements and
nearby countries, as is now the case.
Cost considerations aside, boosting imports from
Eastern Europe is a possibility. Together these six
countries produced in 1981 almost one-half as much
cement as the Soviet Union (see table 8). Undoubted-
ly, however, much of this is needed for their own use.
Moreover, total cement output in these countries has
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Table 8
Production of Cement in
Non-Soviet Warsaw Pact Countries
Output
(million tons)
Rate of Growth
(percent)
1970
42.1
1971
44.6
5.9
1972
47.0
5.4
1973
50.9
8.3
1974
54.8
7.7
1975
58.1
6.0
1976
61.9
6.5
1979
66.6
-2.3
1980
66.1
-0.8
1981
61.1
-7.6
declined since 1978, primarily the result of the indus-
trial upheaval in Poland. Even excluding Poland,
there has been practically no growth in production.
Therefore, purchases from non-Soviet Warsaw Pact
countries probably do not offer a real alternative for
the USSR
Decreasing exports is a third option. The Soviet Union
is a net exporter of cement-roughly 2 percent of its
production (see table 1)-with deliveries in the 1980s
mainly to Hungary, Yugoslavia, Saudi Arabia, Egypt,
and Jordan. In the two years of significant production
declines (1979 and 1982), gross exports decreased,
although not enough to fully offset the production
declines. Much of the exported cement probably is of
less-than-average quality. Even if exports were
stopped entirely, however, domestic availability would
increase by roughly only 2 percent.
The final option consists of importing Western equip-
ment or technology. The Soviets could profit from use
of some of the newest dry-process kilns and preheat-
ers, grinding mills, and materials-handling and meas-
uring equipment. With continuing hard currency con-
straints and uncertainties about future needs for grain
imports and equipment for the energy, agriculture,
and transportation sectors, it is unlikely that cement
equipment will be given a high enough priority to
warrant the massive purchases required. Foreign tech-
nology, however, can help marginally by improving
the technology of a relatively small number of plants.
It cannot resolve the problems of the industryF
Prospects for the 1980s
Without foreign trade as an alternative, the problems
of the cement industry become more significant.
Failure to solve those problems-particularly short-
ages of raw materials and energy, an inefficient
capital stock, and shortages of skilled labor-means
that cement production will not return to earlier
growth trends. In some years, particularly those of
unusually harsh winters, output may decrease.F_~
In turn this scenario will constrain the nation's ability
to acclerate growth in new construction. Cement and
concrete products account for about one-fifth of mate-
rial inputs to construction. With possible substitute
materials also in short supply, the importance of
cement is unlikely to decrease. If this situation is
accompanied by a continuation of the growing de-
mand for hard-to-produce specialty cements by the
military, atomic power, oil, and gas industries, the
burden of reduced growth will fall more heavily on
other users of cement)
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