Marin, Macon-Simcor CEO: Construction materials market will only recover in 2011

Marius Marin, CEO of Macon-Simcor group, with 63 million euros in turnover, says the economic crisis will affect the sector of construction materials manufacturers throughout 2010, with a sustainable recovery being possible only starting in the second quarter of 2011.

“The exit from the crisis depends greatly on the adoption of a coherent government strategy and on an adequate set of measures (…) which would on the one hand be aimed at supporting economic sectors with medium and long-term potential – such is the case of the construction materials manufacturing industry, while on the other hand, they would involve drastic cuts to budget spending and reducing tax evasion,” says Marin. If the government’s anti-crisis measures do not start to be implemented in the next three months via clear steps, it is very likely that the effects of the crisis will be felt in Romania throughout 2011.

The construction materials manufacturer Macon-Simcor posted a 28% sales decline in the first half of the year compared with the same time last year, with the most affected sector being that of precast concrete products due to the lack of funding for infrastructure projects. In fact, consumption of construction materials was down by 30% on average, a lot more than was expected at the beginning of the year, when estimates pointed to a 5-10% decline.

“Considering the fall of the construction materials market by an average 30%, the sales strategy was aimed at lessening the effects of this decline and at diminishing the commercial risk, with a positive cash flow being a prime objective at this time,” explains Marin. In addition, the EBITDA fell by 34% in the first six months, compared with the first half of 2008.

Macon expected a 6% rise in business at the beginning of the year, but original predictions were altered by the consumption collapse in the construction materials sector and by the low level of investments in infrastructure.

Polish investment fund Enterprise Investors last year took over the Simcor Oradea group, held by businessmen Stache Lutz and Mihail Voiculescu, via Macon Deva, in a transaction that amounted to around 53 million euros.