Romania is behind the EU in terms of concrete sales

Lafarge Ciment, the Romanian subsidiary of the French group
Lafarge, which recorded a 36% sales decline in the first half of
the year, says the Romanian market is still behind the European
Union market in terms of concrete sales, with sales of cement by
the sack prevailing, due to the lack of massive investments in
infrastructure.
Lafarge says its strategy for the Romanian market remains
unchanged despite the crisis, and believes Romania still has
long-term growth potential. However, the French extended the 90
million-euro investment programme dedicated to extending production
capacities to 2011, instead of 2010, as initially planned.
“The deadlines for some of our investments have been adjusted
in order to best suit the market’s progression,” said Phillipe
Questiaux, CEO of Lafarge Ciment, a company with 370 million euros
in turnover last year and a 44% net profit margin, one of the most
profitable companies in the Romanian economy.
Lafarge’s cement business contracted by 36% in the first half
of the year due to the decline in consumption and the depreciation
of the RON against the euro. “The sales decline, which was felt as
early as in the fourth quarter of 2008, deepened in the first two
quarters of 2009,” explains Questiaux. Since the beginning of the
year, the company resorted to technical unemployment for some of
its production facilities in order to cut costs, but the biggest
cost cuts were made by reducing the number of shifts and by making
equipment more time-efficient. “Internal measures are mainly aimed
at cash management and everything that it entails: stocks,
payments, and cash coming in,” says the Lafarge CEO.
Concrete sales of the French group, via its Lafarge Agregate
Betoane division, fell by 40% in the first half of the year, due to
a significant decline in real estate investments, and to the very
few infrastructure projects. As a result, cement sold by the sack
sold better amid demand from smaller individual projects.