Romania: cement heavyweights set to invest

Romania: cement heavyweights set to invest
Published: 30 September 2008

Having entered the domestic market by acquiring plants built before 1989, the world’s main cement producers are carrying out the first greenfield projects, after being “forced” by rising consumption and by reaching full production capacities at current plants, Ziarul financiar daily reads on September 22.
Two of the industry’s heavyweights, HeidelbergCement and Holcim, have talked about investing in production capacities built from scratch for the first time this month, with the projects due to reach a cumulated value worth around €800m. These investment projects come after the two producers have spent €950m domestically so far.
However, the surprise came from Austria’s Strabag group, with €10bn annual turnover, which, in a few months will conclude talks with local authorities to start an investment of around €220m in the construction of a cement plant domestically.
“According to its strategy, Strabag aims to hold its own raw material resources to be independent from other entities and develop a project from scratch. Romania is a very interesting market for us, and cement demand is steadily rising. We’re already building a plant in Hungary and the next step is for us to develop a similar facility in Romania,” stated Christian Ebner, head of the communication department of Strabag group.
The Austrian firm’s arrival is likely to change the plans of domestic players, which will have to rethink their investment budgets for the coming years. Cement consumption has registered an unexpected surge in the past two years, to 480-500 kg per capita, which could rapidly absorb a new production facility.
Germany’s HeidelbergCement group will most likely start building a new cement plant next year, in which it could invest around €300-330m. Holcim last week announced it could invest between €400 and €500m in a production facility in Cluj County, meant to be the biggest such facility in Europe.