The Bulgarian unit of Holcim will invest Eur 26m by mid-2006 to upgrade one of its plants in the country and bring its output capacity to 1.1Mt of cement a year, a senior official said on Tuesday. The investment will go mainly for reconstruction of the furnace at the Beli Izvor cement plant in northwestern Bulgaria that will increase the output of the facility to 2500t of clinker daily from 1500t now, Holcim Bulgaria’s CEO Todor Kostov told SeeNews in an interview.
The Beli Izvor plant has an output capacity of 700,000t of cement a year now. It will produce 600,000t this year, up from 540,000t last year, Kostov said. He added the company would use own funds, cash from its parent company and bank loans for the investment. "We believe that this investments will allow us to meet the challenges of the market for the next six to eight years," Kostov said.
"Over the past three years the market has developed tremendously and this trend will continue," Kostov said. The Bulgarian cement market grew by 35%-37% in 2004 reaching more than 3Mt. Kostov said the market would grow by around 25 per cent this year driven mainly by the booming construction sector in the country. "The main consumers [of cement] are the housing construction, the stores and the hotels at the ski resorts and the Black Sea coast," Kostov said.
Bulgaria, where tourism makes for some 10% of annual Gross Domestic Product (GDP), is famous for its Black Sea resorts Albena, Zlatni Pyasatsi and Slanchev Bryag and winter resorts Borovets, Pamporovo and Bansko. Kostov said that the development of big infrastructure project would be the main driving force behind the growth of demand for cement after 2007, when Bulgaria hopes to join the European Union. He added cement makers were eagerly expecting the launch of infrastructure projects such as the EUR 148.5m Lyulin motorway, linking the capital Sofia with the nearby industrial centre of Pernik, and the second bridge over the Danube river, linking Bulgaria and Romania.
Kostov also said that Holcim’s plant in Beli Izvor would make a net profit of 20 million levs this year, up from 11 million levs in 2004. Sales are expected to exceed 100 million levs, rising from some 60 million levs in 2004. The growth in financial results and output is due to the increased investments in Bulgaria, he added.
Apart from the plant in Beli Izvor, Holcim runs another factory, in the northern Bulgarian city of Pleven. Holcim acquired the plant in Pleven from Greek-based Titan Cement Company in 2003 in return for its 46.5 per cent stake in Macedonian Cementarnica Usje. The plant in Pleven has an output capacity of 270,000t of cement annually. This year, it will produce 240,000t up from 230,000t in 2004.
Holcim, which is the second largest cement maker in Bulgaria with a market share of 32 per cent, also runs the sand making plants Holcim Karierni Materiali and Karieri, and the concrete mixtures producer Komars.