Lafarge: exports no longer a priority

Lafarge Cement, the domestic unit of Lafarge group, the only cement producer carrying out export activities, this year cut the share of exports in overall sales to just 5%, prompted by domestic market growth by 30%, to 750-800m euros.
French group Lafarge will generate 400m-euro turnover on the Romanian market this year, up around 45% from last year, from all the 3 units it holds, namely cement, aggregates and concrete and plasterboard, amid rising consumption of construction materials.
“This year, we cut quantities of cement going to foreign markets to 300,000 tonnes as exports are no longer a priority for us. Our strategy is to cover the domestic market and depending on market opportunities to carry out export activities as well,” stated Philippe Questiaux, Lafarge Ciment chairman and general manager.
Lafarge exported 30% of overall cement quantities produced domestically two years ago, but it has gradually reduced exports, with the same strategy to be embraced over the following years.
Besides the decision to cut exports, Lafarge Ciment will boost production and distribution capacities by late 2008 by over one million tonnes of cement at the two plants of Medgidia and Hoghiz, as well as the capacity of the grinding station of Targu Jiu, with total investments aimed at this project standing at 58m euros.
Lafarge is the biggest cement producer domestically, with installed capacities of 5.5 million tonnes, whereas the entire production of plants in Romania amounts to 10.5 million tonnes. As a matter of fact, this year was the first one when cement consumption equalled producers’ installed capacity, which pushed the main rivals of Lafarge domestically, namely Holcim and HeidelbergCement, to announce massive investments meant to raise production capacities.
This year, average cement prices at plant gates rose by some 10%, to 260 RON/tonne. The 3 units of Lafarge last year reached turnover worth around 275m euros, up 20%.
Lafarge Agregate si Betoane will invest around 20m euros every year until 2009 to boost production capacities by 50%. With regard to the plasterboard unit, the company estimates the plant it finalised in Bucharest this year, in the wake of investments worth 17m euros, will reach full capacity next year.