Xella targets greenfield investments

German-based Xella, the largest aircrete producer, with annual turnover worth 1.3 billion euros, has decided to delay the acquisition of any local producers for the time being, and invest exclusively in greenfield projects.
Xella intends to build two plants on the local market on the medium term, with an overall production capacity of around 600,000 cubic metres, enough to cover the local market. The first plant will be built near the city of Ploiesti, with an investment worth over 20 million euros.
“We acquired the land for the plant near Ploiesti in December 2007, and right now are waiting for the construction permit. The investment will amount to over 20 million euros, and will depend on the equipment used, with construction works to start in August,” Eugen Pitic, commercial manager of Xella Ro, Xella’s local subsidiary, told ZF.
The plant will have a production capacity of around 300,000 cubic metres per year, will be situated on a 83,000 square-metre plot in Paulesti, Prahova county, and will be completed within 18 months after the start of construction works.
“We have decided to build a plant on the local market because this is a very favourable time for such an investment, due to the real estate boom and to the stabilising of the commercial environment. The new plant will help us double our sales on the local market,” explains Pitic.
Xella’s strategy on the local market is to complete the investment in Ploiesti and find a stable commercial team, in order to be prepared for the time when the market no longer sees the same growth rate.
‘We intend to build a plant in Cluj, as well, in order to cover the high demand in the Western part of Romania, but no decision has been made in this respect yet. We have decided to open the Ploiesti-based plant first, because it allows us to have more effective administrative and logistic control, due to its closeness to Bucharest,” says Pitic.
Xella currently has a 7% market share of the aircrete market, derived by imports from its Hungarian and Bulgarian-based plants. The company posted around 11.5 million euros in turnover last year, and estimates an around 40% growth rate for this year.