Prospects of development of the pvc window sills market

The market of plastic window sills is an integral part of the market of PVC windows, and the situation is connected with it, influences to the all window branches. For last five years the market was changing grossly, and 2004 became critical - since this moment it is possible to speak about new tendencies of its development.

Within several months the Marketing Center « WINDOWS Marketing » carried out the researches of various segments of the Russian window market to estimate the prospects of its development. One of the major segments is plastic window sills.

The Russian market of plastic window sills started to be formed practically simultaneously with the market of plastic windows in 1995. As well as in other branches with occurrence of demand the finished goods of the European companies, such as Möller (Germany), Venta (Belgium1997) began to be delivered. to the country During this period the level of the price of plastic windows and window sills was so great, that only people with a high prosperity could get them.

The economic crisis of 1998 changed the market’s situation It has created the preconditions for development of manufacture inside the country. The changed exchange rate has made import of finished goods, almost unreal because of too high price of transparent to light products.

Nevertheless, the window market was continuing to be formed. Demand of transparent to light designs was grown by a season of 1999. The requirement of Russian window sills increased too; therefore even in these conditions of economic and political instability a number of the companies was made with the decision about the creation of the industrial enterprises in Russia.

In Russia the first enterprises with own capacities appeared at the time from the end of 1999 till- the beginning of 2000. It was Alta Profile (Moscow), Global Shielda (Moscow), RBК-PLASTIC ( Moscow area), РЕАС group (Moscow). At the initial stage the development of these companies was very fast as they worked in conditions when the demand was already great, and import production became accessible not to each buyer because of high cost in the market.

The next years the high rates of the market’s development were kept and in these conditions - practically always the demand exceeded the offer. The deficiency of production during a season was obvious. In 2002-2003 some more manufacturers of window sills were appeared :( Montblanc ( Moscow area), BFK-extrusion (Novosibirsk), Vitrage( Moscow area), Narodny Plastic ( Moscow area), ОRТО (Samara)., During the period from 2000 till 2003 there was the annual growth of the market and window sills did not suffice during a season, that resulted to the dictatorship of conditions (the price and quality) of the manufacturer.

However the cardinal changes in the market of window sills have taken place only in 2004. The companies have understood the prospects of development of the market and have counted up the profitability of window sills” manufacture . Therefore in 2004 seven new companies of manufacturers of window sills of PVC have appeared in Russia: It is Austraplast (Volgograd), Wega Plast (Petersburg), Western Vinyl ( Moscow area), Profile Plast (Moscow area), Proplex (Podolsk), RTD Complete t (Khabarovsk), Profile plast ( Moscow area).

This significant jump in quantity of manufacturers has changed a situation in the market. At the present extrusion capacities allow to cover almost all existing demand, and a plenty of the companies creates the competition between manufacturers.

Manufacturers and suppliers of window sills

At the present moment in the Russian market of window sills there are 25 companies. 17 have own manufactures, and 7 carry out deliveries of finished goods from abroad. All manufacturers work in other branches of the market too and their specialization can be divided into two groups:

1. Manufacture and delivery of building and finishing materials
2. Manufacture of the PVC - STRUCTURE

Formation of the first group began in 1995 by the foreign manufacturers’ trade of building and finishing materials Now it includes such companies, as Venta (Belgium), Deceuninck (Belgium), Wega Plast (Saint Petersburg), Western Vinyl (Belgium), Target (Rostov – na Dony), Alto - Profile(Moscow), Vitrage ( Moscow area), Narodny Plastic ( Moscow area), ОRТО (Samara), РBК-PLASTIC (Moscow area), РDТ Complete (Khabarovsk), РЕАС group (Moscow), Terna Polymer ( Moscow area). After the crisis of 1998 the price of foreign production became high and the companies have reflected seriously about the change of the development strategy. In this group window sills are the production for expansion of assortment. It is convenient to buy this goods together with other building materials. The company Narodny Plastic has decided to expand the assortment to satisfy the clients’ requirements . The company has brought the PVC structures’ extrusion to a commercial level in 2004.

The second group began to be formed from the companies making the PVC structures. Having mastered process of manufacture, they have started to expand the assortment. Their activity is focused to the clients getting a structure and window sills, as the accompanying goods. For this group it is possible to attribute such companies, as Brugmann, Kommerling (Germany), Montblanc (Moscow area), Profile Plast ( Moscow area), Rehau (Germany), SOK (Samara), Proplex ( Moscow area), BFK- extrusion (Novosibirsk), Global shield (Moscow). Thus, the companies expand the assortment of production and render the additional service for clients.

In 2005 German company Möller is going to open the own manufacture in Russia. The conjuncture of the Russian market promotes the creation of manufacture in Russia. This process will help to approach the manufacturer to the production’s consumer .

It is necessary to note, that the concentration of capacities in the Central region still exists. In Moscow and the Moscow area it is made about 70 % of the Russian window sills, the others 30 % fall to other Russian regions. However, in comparison with 2002, the interest of regional manufacturers of window sills has grown more than three times.

Segments of the PVC window sills’ market
The market of plastic window sills can be divided into three segments:

Elites- PVC window sills with wood stuff and CPL covering(melamine).
In the given segment there are marks of window sills imported in Russia ( Deceuninck, Kommerling, Möller). At present any Russian manufacturers yet have not seized the "know-how" of window sills with wood stuff. Some Russian companies tried to master the complex technology, but process of CPL film’s gluing to the plastic a board with wood stuff is complicated by the bad adhesion.

Optimal - PVC window sills with CPL covering (melamine ). For last two years the Russian companies have quite successfully mastered the manufacture of window sills with CPL film. At the given segment there are both imported marks of window sills, and marks of the Russian manufacturers - Bruegmann, Deceuninck, Plastivan, Rehau, Venta, the Alta Profile, BFK-extrusion, Vitrage, Narodny Plastic, РBК-Plastic, РЕАС group, Terna Polymer.

Economical - PVC window sills with PVC film. In this segment there are marks basically of the Russian manufacturers, but the company importers are present too - Austraplast, Vox, Montblanc, Proplex, Profile Plast, Wega Plast, Western Vinyl, SOK, Target, Alta - Profile, BFK-extrusion-, Vitrage, Global Shield, Narodny Plastic, ОRТО, РBК-PLASTIC, RDТ Complete , РЕАС group,Terna Polymer.

Market’s shares of the window sills

The least competition is traced in a segment of "elites". The market’s share of this segment is about 6 %. It is necessary to take into account, that in Russia many companies offer the production of the optimal segment to the consumer of the elites’ segment. as in consciousness of the consumer the border between these segments was not generated yet. The basic share of clients of this segment settles down in Moscow and the Moscow area.

Such segments as Optimalл 48 % and Economical occupy approximately equal shares of the market on 46 %, a competition in these segments are higher and the quantity of the window sills’ marks is more.

Trade channels

Despite of presence of the significant capacities which will be appeared by 2005, up to the users production will reach by the most various channels. Thus it is possible to note, that all of them have some advantages and exist in parallel, creating the competitive market conditions.

Manufacturers of window sills realize the production through the wholesale companies trading building, finishing materials and completing. Among of which it is possible to allocate КС, RusPlastik, TBM, Faubexa and others. Those, work with retail buyers, building and finishing companies, and manufacturers of the transparent to light designs

With increase in rates of construction for last five years, building and finishing companies get rather large volumes of window sills

Other trade channel is sales by manufacturers and dealers of plastic windows, such as Kaleva, Victory, Eurowindows, Moscow Windows, Windows Dill, Windows- ROSTA, Excellent Windows, Hobbit and others. These companies and their dealers work basically in the secondary market of habitation and fix the plastic windows in complete with window sills to final clients.

Competition and price level

The appearance of the new companies in the market in 2004 was rather difficult because of sharp of the prices’ falling. This year the competition has become aggravated so, that the prices of window sills have fallen up to 30 % in comparison with a season of 2003. However this sudden change was not, practically reflected to the cost of production to the users. The building and finishing companies, and also manufacturers of plastic windows have won with it.

In May, 2004 the price of window sills have fallen approximately up to 15 - 20 %. It has taken place, because the manufacturers have reduced sharply the price to increase the share of the market and to load new capacities.

The matter is that many manufacturers of window sills try to automate the manufacture to lower the influence of the human factor to the manufacture. Therefore many companies buy the high-speed automated lines of such companies as Technoplast (Austria), Krauss - Maffei (Germany).

In summary it would be desirable to note, that in 2004 capacities of the companies of manufacturers of PVC window sills in Russia have increased almost up to 40 %, and supply and demand have achieved practically equal values. Therefore there is a fear, that the following season for some companies will be critical by the condition of the average growth of the market up to 15 % per one year.

In 2005 the situation will be a little bit another. The struggle for the client will begin in the market, and new methods of work will be get the special importance : perfection of the clients service’s degree, quality of production, stimulation program of dealers and advertising programs

Unfortunately, in one article it is impossible to describe all features of this market. We have mentioned only some aspects. However for formation of strategy of development of business it is necessary to have the full data about the market of window sills.