Cement producer a Steppe ahead of the competition

The population of Astana, Kazakhstan's capital city, has more than doubled in the last 10 years.Not only have new homes been required for its new citizens, but a host of weird and wonderful government buildings have cropped up and are still appearing, symbols of commodity-rich Kazakhstan's new wealth.Cement is needed for all this new construction, which is good news for Steppe Cement, the provider of about a fifth of Kazakhstan's supply of the building material."The Kazakhstan Government has continued its infrastructure projects and ongoing support for completion of real estate projects in Almaty and Astana," Steppe said as it posted a rise in half year profits as well as narrower losses. Astana replaced Almaty as the country's capital in 1997.Steppe has benefited from increased production of cement and higher prices. It expects prices to rise higher still. One possible issue for the company in coming years is the arrival of competitors, which it very honestly refers to in its results statement. But it may be foreign imports rather than Steppe's market that these new providers eat into. Kazakhstan buys cement from Russia, Kyrgyzstan and, ironically given that it is the main source Kazakh commodities such as copper, China. But imports' share of the Kazakh cement market is decreasing.Steppe's success is quite clearly related to the building boom in Kazakhstan, which is in turn a manifestation of the country's ability to benefit from strong commodity demand from China. Notwithstanding competition worries, continued growth from China should be good news for Steppe.