The Lafarge Romania director: 2009, the first year with a drop since our arrival here

For the first time since the arrival of the French group on the domestic market, Lafarge Romania will post a drop in turnover in 2009, in the context of the financial crisis’ impact on the construction sector

The French group, whose entry on the local market involved the takeover of former local producer Romcim in 1997, had reached EUR 370 million turnover in 2008, and EUR 163.8 million net profit.

This year, Lafarge saw a 34.4% drop in sales on the local market in the first nine months, as compared to one year before. The French forecast a 28-30% drop of the local cement market in volume in 2009, and a 22-24% drop for the CEE market.

“The cement market will resume its growth in the latter half of 2010, when I expect the Romanian economy would recover as well, due to incoming European funds, a process that will lead to infrastructure projects being launched, and I especially refer to roads and highways. Romania’s only chance is to use European funds”, Questiaux emphasized.

Domestic cement production was slightly higher than 10 million tons in 2008, and a 3 million ton drop is expected for 2009. Cement use in Romania also reached record levels in 2008, around 600 kg per capita, or close to 13 million tons of cement. Cement sales in the first nine months of 2009 dropped by circa 30%.

“It was not only local consumption that dropped this year, but exports as well. We exported nothing in 2009, but we hope we would resume exports as soon as possible”, said the Lafarge Romania director.

Despite the drop of cement sales, the French carrie on with their plans to invest in order to raise production capacity.

Lafarge Romania completed the construction of the world’s biggest dome-type clincher storage facility, located on the premises of the Medgidia factory. The funds allocated to construction of the facility amounted to EUR 16.5 million. The investment is part of the EUR 90 million 2007-2011 plan to raise production capacity. So far, Lafarge has spent 75% of the total budget.

“The idea for that facility came up in 2006, after we noticed extra production capacity is needed in Romania, as demand rose steadily. We started construction in June 2008, and by October the crisis ha begun. We wondered whether we should continue or not, and decided to go on, as the project was in advanced phase”, says Nicolas Fournier, regional director of the Lafarge group.

The facility can store 250,000 cubic meters of clincher, and its construction involved 200 workers and specialists from Romania, the US, Poland, Mexico, Austria, Germany and Turkey.

The Medgidia plant makes up for 22% of overall domestic cement production. In Romania, Lafarge controls one more plant in Hoghiz and a cement grinder in Targu Jiu.

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