Floods save cement industry

The floods that hit Romania this summer have revived the cement market in terms of increased orders. The cement industry, which is worth up to 300 million euros a year, had seen a fall in business in the first half of the year.

“The reconstruction works following the floods resulted in additional demand that had not been planned for. This is why there”s pressure being put on our factories and why monthly consumption is about 30% higher compared with the same time last year. We have been unable to supply as much cement as we are asked to supply for two and a half months,” Mihai Rohan, chairman of the Employers Association of the Cement Industry (CIROM) and representative of one of the three Romanian producers, Carpatcement Holding, told Ziarul Financiar.

The cement market is divided almost equally between the three major international players operating in Romania: HeidelbergCement (Germany), Holcim (Switzerland) and Lafarge (France). Each investor owns three cement factories, with domestic demand still using only half of the existing production capacity. Demand for cement has grown constantly over the last few years, however the first half of the year was characterised by stagnation and even a slight decline, Rohan says.

“Private construction projects did well in the first half, but public contracts didn”t. The public component started to show as late as the second half. I estimate a 3-5% full-year growth,” the Carpatcement manager said.

The estimates by the employer association of stagnating demand in the first six months were made despite Holcim Romania”s announcement of sales growth of 14.1% for the period. At the same time, Lafarge saw its business grow on the Eastern European market, including Romania. On Wednesday, the three cement producers announced the investment of 10 million euros in facilities to process waste that is later used in the manufacturing process. The goal is to bring the investment up to around 30 million euros.