This report profiles Poland’s construction materials sector, analyzing sectoral trends through 2013 and offering market forecasts for the coming year. It also reviews corporate news for firms such as Lafarge, Grupa Kety, Megaron, and Barlinek, among many others.
After the positive annual performance in 2011 and H1 2012, the building materials market returned on a downward path in the second half of last year, driven by the similarly poor performance of the construction sector. The situation is explained by the end of the investments related to the Euro 2012 soccer championship and the infrastructure projects financed by the EU Cohesion Fund. Furthermore, residential investments remained at a low level.
In the short run, the building materials market and the construction sector are definitely going to face challenges, particularly in the public building segment, but the future outlook is not entirely gloomy, as the lowering demand from infrastructure can be replaced by alternatives in sectors such as rail and energy. Furthermore, the residential market has stabilized and the new state-subsidized home-loan scheme aimed at the primary market units might also contribute to some extent to a revival of new developments. Nonetheless, the construction sector is expected to see visible recovery only beginning with next year, when EU co-financed projects for 2014–20 are launched.
• In corporate news, in July 2013 cement maker Lafarge finalized a concrete plant in Gorzow. Aluminium company Grupa Kety has reported higher profit but lower consolidated sales revenues in January–September 2013. The construction materials producer Megaron plans to double production capacity and intends to expand its existing facility and build a new plant. And wood flooring maker Barlinek’s majority shareholder announced a call for shares, possibly in a run-up to a delisting from WSE.
• Out of 25 major construction materials products surveyed by the statistical office, 19 recorded a y/y decrease of output in 2012, compared to only six groups in 2011. Cement and ready-mixed concrete segments recorded the steepest deterioration last year. Sales of cement also contracted by a double-digit annual rate in 2012.
• In terms of output, only four groups in the the building materials market recorded annual growth over H1 2013, namely floor, walls and ceiling coverings made from plastics (up by 17.6% y/y), wood parquet panels, ceramic sanitary wares, and expandable polystyrene. The steepest decline—above 30% y/y—was recorded in production of ceramic flooring blocks, asphalt, and clinker cement.
Table of Contents
1. Market overview
1.1 Construction output drops 1% y/y in 2012, decline accelerates in H1/2013
1.2 Construction market value is still 1% y/y higher in 2012, but sees double-digit annual decline in H1/2013
1.3 Construction materials output diminishes in 2012, production further weakens in H1/2013
1.4 Building material prices resume annual decline in H2/2012
1.5 Road construction sector shrinks 18.8% y/y in 2012, expected to continue downwards in 2013-study
2. Residential construction segment
2.1 Number of completed dwellings rebounds in 2012, after three-year decline …
2.2 …While number of permits, dwellings in construction keeps falling y/y in 2012, H1/2013
2.3 Polish residential real estate market stabilises
2.4 Government enforces new subsidized home loan scheme, earmarks PLN 3.5bn under program for 2014-2018
3. Basic materials- Cement, lime, plaster, wood, glass
3.1 Cement sales, production record double-digit y/y decline in 2012, H1/2013
3.2 Ready-mixed concrete output drops sharply in H1/2013
3.3 Lime, plaster output annual performance slides in negative area in 2012
3.4 Lafarge finalises concrete plant in Gorzow
3.5 Gorazdze group expects further turnover decrease in 2013
3.6 LSA plans to build new aggregates factory in Podlaskie
3.7 Plywood maker Pfleiderer Grajewo’s profitability improves in H1/2013
4. Basic materials: Metal constructions
4.1 Steel product demand diminishes as activity in infrastructure construction weakens
4.2 Grupa Kety reports higher profit, lower consolidated sales revenues in Jan-Sep 2013
4.3 Steel elements producer HW Pietrzak Holding increases stake in pipe manufacturer Ferrum
5. Basic materials: Building chemicals
5.1 Construction chemicals market increases marginally y/y in 2012, expected to decline this year
5.2 Construction chemicals market remains fragmented
5.3 Megaron plans to double production capacity, mulls bond issue
5.4 BASF starts construction of catalytic converter plant near Wroclaw
6. Installation materials
6.1 Lighting systems company ES-System mulls expanding Dobczyce plant
6.2 Fire safety systems maker Mercor to sell part of business to Ukraine-based Assa Abloy
6.3 Lighting systems company LUG launches operations in UK, expands business profile
7. Finishing materials
7.1 Ceramic tiles market expected to drop 10% y/y in 2013 on falling demand
7.2 Wooden window manufacturer Pozbud acquires majority stake in Baumal Group
7.3 Investment company PZU increases share in Armatura Krakow to 82.5%
7.4 Grupa Ferro establishes distribution unit in Slovakia
7.5 Ceramika Tubadzin moves on with investments
7.6 Tile producer Ceramika Nowa Gala cancels new factory project
7.7 Barlinek’s majority shareholder announces call for shares, eyes delisting from WSE
7.8 Suspended ceiling manufacturer Rockwool opens new production line, plans PLN 280mn investments in upgrading plants
Release Date: Mon, 04 Nov 2013