Lafarge to recover investment in 2004

French construction supplies group Lafarge hopes to see more than 239 million euros of the capital investment made on the Romanian market so far recovered as late as next year.

The French investor, one of the world leading players in the construction supplies industry entered the Romanian market in 1997 when it bought the controlling interests in the largest cement producer on this market, Romcim, which had four cement factories.

Lafarge later had to shed the facility in Alesd, which it sold to Swiss Holderbank Group (now known as Holcim) in 1999. “Under the current market circumstances, Lafarge hopes to recover its capital investment made in Romcim, next year,” said Philippe Questiaux, general manager of Lafarge Romcim, the local branch of the French group on the cement market.

Lafarge Romcim representatives feel the “price on the domestic cement market does not provide for an adequate return on investment. A total capital investment of more than 239 million euros and a return on investment of at least 8.5% as demanded by Lafarge’s shareholders and by banks, should result in a minimum annual net profit of 20 million euros.” Lafarge Romcim logged 775.4bn ROL (24.8 million euro) net profit last year, while turnover amounted to 3,998.2bn ROL (127 million euros), according to the latest financial statement filed with the Finance Ministry. The company has seen more than 20 million euros in net profit only in three of its six years on the Romanian market. It made 2.4 million euros in net profit in 1997, 5.7 million euros in 1999 and 16.5 million euros in 2000. All the figures are calculated in line with the average ROL/EUR exchange rate announced by the National Bank of Romania (NBR). If calculating under the IAS, the company started making profit as late as in 2001.

Lafarge Romcim’s operations are now comprised of the cement factories in Medgidia and Hoghiz (Brasov County) and of the grinding factory in Targu Jiu. The company is currently employing more than 1,100 people.
adrian.mirsanu@zf.ro