Growth on precast concrete market attracts investments

The expansion of the precast concrete products market, at an annual rate of 25-30%, has attracted the attention of Europe’s biggest players on this segment, which not only include investment funds, but companies such as Consolis (Finland) and Ergon (Belgium), part of Ireland-based CRH.
In recent years, the ever-tighter deadlines for projects have pushed builders to increasingly resort to precast concrete, which enables a much shorter execution period than the older method of laying the structure directly on the construction site.
The precast concrete products market will hit 150m euros this year, according to market estimates, and will attract investments worth hundreds of millions of euros in production facilities, reads the 25 September edition of Business Construct monthly.
Recently, Swedish investment fund Oresa Ventures acquired, through Sonriso, three subsidiaries of the Somaco firm for 32.5m euros, after having sealed other acquisitions in the sector of constructions. “Investments in retail and industrial space and in infrastructure are the growth drivers of precast concrete product sales,” says Cornel Marian, an investment manager with the fund. “(…) We’ll invest 10m euros to modernise the existing plants and boost the production capacity,” he adds.
Belgium’s Ergon Concrete International, part of CRH, which also owns Elpreco Craiova, has announced the biggest investment project. Ergon may invest 70m euros to increase the production capacity of the plant in Brazi, Prahova county, a location in which the group has already invested 15m euros.
The production centre, with 110 employees, currently has a capacity of 26,000 cubic metres, which will be expanded in the coming years. “We’ll most likely start building the second plant next year considering the contracts we’re now negotiating,” stated Steven Houbracken, general manager and a board member at Ergon Concrete International.
“There’s a high growth potential on the Romanian market owing to investments in retail, logistics and office spaces. Moreover, the number of infrastructure projects will also rise in the following years,” says Paul Lannoye, project manager of Ergon.
Finish group Consolis, Europe’s biggest precast concrete producer, acquired Asa Cons Turda precast concrete products plant in a more complex deal. The Cluj-based company announced it would open a new production facility this year, in Urziceni area, in order to slash transport costs and tap into Bucharest’s precast concrete products market.
The precast concrete products sector has become increasingly appealing to foreign players, and especially to investment funds, in recent years. Macon Deva was in 2006 taken over by Enterprise Investors for 35m euros. Then, through Macon Deva, Enterprise Investors bought Simcor group in a deal worth around 53m euros, while CRH Irish group bought Elpreco Craiova for 65m euros.

The market

• The expansion of the precast concrete product market, at an annual rate of 25-30%, has drawn the attention of Europe’s biggest players on this segment, such as Consolis (Finland) or Ergon (Belgium), part of Irish CRH group, as well as investment funds
• The precast concrete market will hit 150m euros this year, according to market estimates, and will attract investments worth hundreds of millions of euros in production facilities