Holcim Romania hopes for a 3 percent turnover increase this year, announces EUR 25 million investments

After investing EUR 700 million locally between 1997 and 2011, Holcim Romania has an investment budget of about EUR 25 million this year which will mainly be directed towards the company’s two cement factories.

The Romanian cement market had a rough start to 2012, due to bad weather and the overall market conditions, said Daniel Bach, general director of HolcimRomania. Last year the market is estimated to have grown by about 5 percent against 2010.

“I would be happy if we close 2012 with the same results as last year,” he said during a press visit to Holcim’s cement factory near Campulung. Bach disclosed that in the first quarter of this year the company saw volumes go down by 6.7 percent.

After the cement producer managed to grow its business by about 13 percent last year, to reach EUR 222 million, Bach says the best case scenario for this year would be an increase of about 2 to 3 percent. This mostly depends on the government resuming infrastructure projects, as the residential sector is not expected to recover in the next two years. Presently about 40 percent of the company’s sales are to infrastructure projects, another 40 percent go to commercial projects (office, retail and logistics) and the remaining 20 percent are made to the residential sector.

“We hope that the government will focus on the infrastructure sector and that big projects that were started last year like Corridor 4 will continue. If infrastructure plans continue I think we will match last year’s results,” he said.

As for the worst case scenario, Bach said it was hard to make any forecasts given both the international economic instability and the evolution of the domestic market.

Despite the 13 percent growth reported in 2011, the company’s turnover remains well below the EUR 372 million peak reported in 2008.

Referring to the current turmoil on the local political scene and its effects on the business environment, Bach said he hopes the government will focus on what is important for investors, be they local or foreign. He stressed the need for law enforcement in the fiscal area and legal predictability. “When you make investments decisions you want to be sure that your assumptions with regard to the legal environment and its development will hold water and that they will apply for some time,” he said.

Swiss Group Holcim bought the Campulung cement factory in 1999. Since then the firm has invested EUR 265 million in upgrading and extending the factory’s production capacity as well as improving its environmental performance. The plant is now the seventh best performing factory in the Holcim Group, which comprises 95 plants in more than 70 countries. “I am happy to say that what you see in Campulung could just as well be inSwitzerland,” said Bach.

A year later the group acquired its second local factory, Alecim Alesd, where it has since invested EUR 175 million. In addition to the two cement plants it also runs locally a grinding station in Turda, five aggregate stations, nineteen ready mix concrete stations and two cement terminals inBucharestand Turda.

Holcim has a total production capacity of 6.1 million tons per year inRomania.

Plans for new plant postponed

Given the economic context, Bach said plans to invest in a new site have had to be postponed. “A new factory is not going to happen over the next five years, that is for sure,” said Bach.

Local cement production amounted to 7.6 million tons in 2011, up by about 10 percent y-o-y, according to the cement employers’ association CIROM. Other important players in this industry are Carpatcement and Lafarge.

Simona Bazavan

DMCA

PROTECTED