Cemex plans to focus on business opportunities abroad until the economic recovery across Southeast Europe (SEE) gains traction, the company’s board chairman said.
Fresh opportunities will have to be found on new markets as the current situation in the region is not great, Trpimir Renic told SeeNews in an interview.
"Although there still are certain ongoing infrastructure projects, the fact is that many governments [in the region] decelerated and stopped their consumption and cut their budgets, which is strongly affecting the building industry," Renic said.
The balance sheets of all major cement producers would attest to the challenges they continued to face in Europe in the first quarter of 2010.
Cemex Hrvatska, like the entire construction industry, found itself in a very difficult situation in 2009 which demanded that it maintain normal production, increase efficiency, cut costs and boost its competitiveness, the company executive said.
In 2010, Cemex Hrvatska expects the unfavorable trends to continue, although there are certain signs showing that some of the foreign markets are rebounding. The company’s main focus this year will be on improving its offerings to potential buyers, expanding to non-traditional export markets, careful cost management and energy efficiency in order for it to keep its leading position on the Croatian and regional markets, Renic said.
The company’s main export markets are located in the SEE region. These are primarily Bosnia and Herzegovina and Montenegro, but also Mediterranean countries such as Slovenia, Italy, Albania and Spain. Egypt has also emerged as a major export destination for Cemex. It shipped 100,000t of clinker there in 2009 and recently started to export cement. "We expect to export over 200,000t of cement to the Egyptian market this year, which would be a great exporting success in a time of crisis and would demonstrate that production and export have to be the basis of the Croatian economy," Renic said.
"The cement industry in Croatia is unfortunately losing its competitive edge because of taxes and excises connected to CO2 emissions that we have to cope with, while the competition coming from the region and Europe does not have to meet such obligations.
"Maintaining our leading position on the Croatian market is of utmost importance and we address this issue seriously. We have slowed down our capital investments for the time being, but this does not mean that we have stopped investing altogether," Renic said.
"We continue our investments in operations based on principles of sustainability by continuously working on different projects, from health and safety programmes for our employees to cooperation with the communities we operate in. Our goal, of course, is to adjust our operations to EU regulations, not only because of future EU accession, but also because of the fact that we already operate on EU markets."
The company hopes that significant efforts will be invested in developing competitiveness which will be thoroughly tested upon Croatia’s EU entrance. "Cemex’s competitiveness is endangered by the already mentioned excises, so we expect that the government should adjust Croatian regulation to EU [law]," Renic said.