The sales of German cement sector stood at Euro 1.8bn in 2005, up 5.8 per cent year-on-year, according to Andreas Kern, president of the Association of German Cement Industry. In volume terms, the sales stood at 7Mt, down 5.6 per cent compared with 2004. According to Kern, the prices in 2005, despite certain increases, remained by between Euro 5.0 and Euro 10 per tonne below the average price of Euro 70 per tonne, which is seen as a condition for the profitability of the German cement producers.
The low level of the prices is a result from over-capacities in the sector. Currently, more than 20 companies produce 40Mt annually in Germany. The capacities should be reduced by between 5-10Mt, so that the producers’ earnings could reach between 5.0 and 6.0 pct of their capital costs, Kern said. He also added that the industry could register turnover growth of up to 10 per cent in 2006 by introducing further price increases.