Russian water supply equipment market: main trends and prospects

The Russian water supply equipment market is showing good growth rates.

Over the past two years, the Russian market of water supply equipment has been significantly transformed. At the same time, its growth rates have been maintained, which gives new foreign players a chance to gain a foothold on it, including in free segments.

Current indicators of the Russian water supply equipment market

In general, the Russian market of water supply equipment in 2023 recovered from the effects of the 2022 shock caused by geopolitical factors. Thus, the volume of the household water heater market last year reached record values in the history of observations. The production volume of water treatment equipment increased by 25%, which reached 35 billion rubles by the end of 2023.

Compared to 2022, the situation with imports of water supply equipment has significantly adjusted in the past year. The largest share (about 60%) was observed in the segment of pumping equipment, while the share of foreign water treatment equipment and water heaters was at the level of 40-45%. The bulk of equipment was supplied by such companies as Bosch, Grundfos, Sulzer, Electrolux, which left the Russian market in 2022. It should be noted that the departure of European manufacturers of pumping equipment, which had a significant share in the Russian market, affected its dynamics in 2022. Now more than 80% of the entire water supply equipment market is accounted for by Russian, Chinese and Turkish products. Interestingly, the annual increase in the supply of pumping equipment from China exceeds $100 mln.

Prospects of the Russian water supply equipment market

In the next 1-2 years, if the current status quo is maintained, we should expect further growth of the domestic market of water supply equipment. The main driver of this process will be the construction and utility sector. For example, in 2023, a record 110 million square meters of housing was commissioned in Russia, and by 2030, the annual volume of housing commissioning is expected to reach 120 million square meters.

It is also worth noting changes in the structure of housing commissioning: in 2023, more than half of the commissioned "squares" (53%) were individual houses. Given the growing popularity of suburban living, as well as the adoption of integrated rural development programs in the regions, we should expect an increase in demand for water supply equipment for private homes. We should not discount the construction of other facilities: new schools, health care facilities, business centers, educational campuses, etc. Their construction will require, among other things, water supply equipment for such buildings.

An equally important area is the modernization of the housing and utilities system and capital repairs of apartment buildings. Thus, according to the Russian Ministry of Construction, 400 thousand kilometers out of 900 thousand kilometers of water supply networks need to be replaced. In 2024, more than 12 billion rubles will be allocated for the renewal of communal infrastructure, and by 2030, 4.5 trillion rubles will be allocated for the renewal of communal infrastructure. In addition, billions of rubles are allocated annually in the regions for capital repairs of houses.

The share of domestic water supply equipment is likely to continue to grow, primarily in the mass segment. At the same time, since the departure of a number of manufacturers (first of all, pumps) their products have not been fully replaced. Therefore, foreign companies offering equipment in the medium and high price segment have a chance to gain a foothold in the free niches of the growing Russian market.