Cement producers launch investment programs to boost production

High demand for cement and the fact that Romanian factories have reached maximum production capacities made led major producers of cement to make significant investments to expand their current capacities.

Thus, the top three producers on the local market, Carpatcement, Lafarge and Holcim this year launched investment programs worth some €100 million each, to boost production by more than 30 percent by 2010.

“The cement market is currently facing a shortage of materials, as demand exceeds production capacities. We will invest some €100 million by 2010, to increase production by 1.2 million tons,” Carpatcement Holding’s General Manager, Mihai Rohan, told Business Standard.

Rohan, who is also President of the Cement Employers Association(CIROM), said that production rose 5 percent in the first quarter of 2008 alone, while sales increased 18 percent. To meet the demand, companies will be forced to import significant amounts of cement.

“According to our estimates, the market volume will reach some 12 million tons this year, of which only 11 million tons will be provided by local production, Rohan said. Last year, imports totaled 100,000-200,000 tons, he added.

The local subsidiary of Swiss Holcim group also announced it will invest to expand production. “We have a budget worth €135 million this year, of which most funds will be allocated to expand the cement production. By the end of this year, we will have additional capacity for 1 million tons, while total capacity will be close to an annual 4 million tons,” Holcim Romania’s General Manager, Markus Wirth, told Business Standard.

Lafarge Ciment, part of French Lafarge group, recently announced it would increase investments to raise its production capacity by 1 million tons, to 5.5 million tons, by 2010.

The local cement market rose more than 30 percent in 2007, up to 10.2 million tons, and some €700-800 mln. It is expected to grow by 20 percent this year, to 12 million tons, worth some €1 billion.
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