Lafarge Romania increases cement sales by 37.4 pct in Q1 on good weather

The local subsidiary of French construction materials producer Lafarge sold 37.4 percent more cement in the first quarter of 2014 compared to the same period last year, the company has announced. The increase was mostly fuelled by good weather.

“In Romania, cement volumes increased solidly, supported by several projects started earlier due to favorable weather,” reads the manufacturer’s monthly report.

Lafarge Romania runs two cement factories – in Medgidia and Hoghiz – and in addition to the cement business it also has divisions for aggregates, concrete and additional services.

The company has a market share of about 30 percent in Romania. Its main competitors are Swiss Holcim and Carpatcement, part of German HeidelbergCement AG, each with similar market shares.

French Lafarge and Swiss Holcim announced last month that they had reached an agreement to merge their global activities. This will also impact the two companies’ local operations. The two construction materials producers will need to sell 43 percent of their combined production capacity in Romania in order to obtain competition authorities’ approval for a merger, according to analysts from Deutsche Bank cited by the Wall Street Journal.

The Romanian cement market is estimated at around EUR 600-700 million (7 million tonnes). Last year proved a challenging one and the market was estimated to have dropped by between 3 and 5 percent as both residential and non-residential construction stalled, said Daniel Bach, then CEO of Holcim Romania, in November.

In Q1 2014, the Lafarge group reported cement volumes were up 11 percent in the first quarter, with “continuing strength in emerging markets and solid growth in most of the European countries”. Like for like, EBITDA went up 21 percent and EBITDA margin was up 130 basis points, “with a particularly good performance in Middle East Africa”.