Carpatcement braces itself for first year of net profit decline

German HeidelbergCement group, which operates on the domestic cement, aggregate and concrete markets, is expected to post a decline in net profit in 2008, after four years of growth, due to limited production capacities and rising production costs. “We will be influenced by significant price hikes in energy, fuels, third party services (as a result of the announced hikes in power and fuel prices and the increase in labour costs) and salary expenses (the restructuring plan was completed at the end of 2007 and any increase/indexation of the wages has a rising impact on overall salary spending),” Mihai Rohan, general manager of Carpatcement Holding, the main division of the group in Romania told ZF. Moreover, net profit will also suffer because of tax and mining royalties increase. The company started an extensive investment programme worth 150 million euros this year in order to double the production capacities it has in Romania.