Lafarge derives 52m-euro profit from cement

Lafarge Cement, the domestic cement branch of French group Lafarge, last year derived gross income worth 52 million euros (188 million RON, calculated against an average exchange rate of 3.6234 RON/EUR), which against turnover translates into a gross margin of around 36 percent.

Compared with 2004, the company witnessed a slight gross margin decline in euros, by about 4 percent.

Lafarge Cement last year posted turnover around the 175 million euro mark, up about 22 percent compared with the previous year. The company is the only cement exporter in Romania, with a third of its sales being made to foreign markets.

As far as Lafarge operations in Romania are concerned, the net margin was the same as in 2004, standing at around 25-28 percent.

In this context, the net income derived by all units of the company operating on the Romanian market could amount to 57-63 million euros, higher than the profit posted in 2004.

The other major competitors on the cement, concrete and aggregates markets, such as Holcim Romania and HeidelbergCement logged net profit worth 33 million euros, and 35 million euros respectively.

Lafarge, Romcim and HeidelbergCement are in a very tight competition, holding similar shares of the cement market, which was estimated at 400 million euros in 2005.

This year, company representatives forecast cement sales will grow by 10-12 percent compared with the level attained at the end of 2005.

The French group last year registered turnover standing at 240 million euros in Romania, up 20 percent from the level posted in 2004. These figures, however, were posted by the three units of the company together: Lafarge Ciment, Lafarge Agregate si Betoane and Lafarge Arcom Gips.

Lafarge Romcim has become Lafarge Cement this year, following the implementation of a new brand policy, which unifies the visual identity of all the units under the name of Lafarge Romania.

The French group entered Romania in 1997 following the acquisition of the cement producer, Romcim. Its investments on the construction materials market thus far amount to more than 300 million euros. catalin.lupoaie@zf.ro