Strawberry pickers trigger rise of cement business

Romanian workers (including strawberry pickers) in Spain or Italy who returned to Romania in the first half of the year brought about a 20% growth in cement sales of Carpatcement Holding, the local subsidiary of the German group Heidelberg, say company representatives.
The growth seen halfway through the year is double against the original estimate, of some 10% for this year. Thus, the German group’s business for this year could exceed 220 million euros on the three markets where it operates: the cement, aggregates and concrete market.
“The first six months witnessed a major inflow of money from workers employed abroad, who came home for Easter and started to build homes for themselves,” Mihai Rohan, general manager of Carpatcement Holding told ZIARUL FINANCIAR. According to some estimates, around 1-2 million Romanians working abroad return to Romania with over 4 million euros per year.
Moreover, the growth in cement sales in the first six months was also generated by real estate investments, which had a faster growth pace against the same period of last year.
“In May, a month that is taken as a standard for the activity of the year as a whole, sales peaked because of the friendly weather and of the massive demand in the construction sector,” says Rohan.
In 2005, business of all three divisions of the German group – Carpatcement Holding, Carpat Beton and Carpat Agregate – reached some 194 million euros, a 22% rise against the previous year, and a net profit worth 34.6 million euros.
The Germans at HeidelbergCement share the cement market with the Swiss at Holcim and the French at Lafarge, each holding about one third of the local market, estimated at over 400 million euros a year.
Cement consumption in Romania stood at some 276 kilos per capita in 2005, an increase against the 225 kilos in 2003 and the 256 kilos in 2004, according to data released by Carpatcement.
The annual growth pace is of some 7-8%, but with major infrastructure projects, such as the Transylvania highway and the Brasov -Bucharest highway, the market could rise by 13-15% per year, according to Carpatcement representatives.
The Romanian cement market stood at some 6.1 million tonnes of cement last year.
The German group will invest some 25 million euros in 2006. The funds will go to installations that use alternative fuels, to the modernisation of the plant in Fieni and to environmental protection programmes in its three plants. In 2005, HeidelbergCement investments in Romania stood at some 17 million euros. Following the growth on the cement market, Carpatcement increased its cement production in 2004 from 1.7 million to 2 million tonnes. The German operator has an installed capacity of 3.1 million tonnes in three plants.