Poland Construction Materials Report - 2014

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Poland Construction Materials Report - 2014

This report covers the market developments in FY 2013, January-September 2014 and the data available as of October 2014.

The building materials market paralleled the negative y/y performance of the construction sector in 2013, yet in the second half of the year the situation started recovering and in January-September 2014 statistical indicators revealed that the construction sector returned on upward path. The decline in 2013 is partly on high base comparison (until end-June 2012 construction works peaked, ahead of the Euro 2012 soccer championship), but also explained by the completion of the EU-funded major projects.

The construction materials sales value inched down by 0.8% y/y in 2013, but started recovering in Q1/2014, when sales improved at double-digit annual rate, according to market data. Building materials output also recorded cheering y/y performance this year, driven by rising demand coming from new investments financed from public funds and cohesion funds. In Q1 alone, cement and ready-mix concrete output surged by 53.1% y/y and 43.3% y/y respectively.

The prospects for the building materials market are on the positive side, linked to the same expected performance of the construction sector. After two consecutive years of annual decline, the construction sector is expected to start recovering at sluggish pace beginning with 2014, propped by new EU co-financed projects and a projected revival of the building construction segment.

Key points:
• Construction output shrinks in 2013, but recovers in Jan-Sep 2014
• Construction materials output records cheering y/y performance in Jan-Sep 2014, after slow 2013
• Polish residential real estate market remains overall stable in 2013, H1/2014
• Plastic construction material producer Gamrat sells PVC flooring division
• Nemex to spend €36.4mn on new factory
• H+H Polska acquires Polish autoclaved aerated concrete producer Grupa Prefabet


Table of Contents

Contents
Executive summary 5
Market overview 6
Construction output shrinks in 2013, but recovers in Jan-Sep 2014 6
Construction market value down y/y in 2013, resumes growth in Q1/2014 7
Construction materials output records cheering y/y performance in Jan-Sep 2014, after slow 2013 8
Building material prices continue downwards in 2013, Q1/2014 9
Polands adds €6bn new investments to 2011-2015 road construction programme 9
Value of industrial construction market reaches record level in 2013 10
Construction sector to start recovering at sluggish pace in 2014 10
Residential construction segment 11
Completed dwellings number drops 4.4% y/y in 2013, continue on downward path in Jan-Sep 2014 … 11
Number of building permits shrinks 16% y/y in 2013, but recover in Jan-Sep 2014 12
Polish residential real estate market remains overall stable in 2013, H1/2014 13
Basic materials- Cement, lime, plaster, wood, glass 13
Cement sales, production drop for second consecutive year in 2013, but rise 9.6% y/y in Jan-Sep 2014 14
Ready-mixed concrete output grows at double-digit annual pace in H1/2014 15
Lime, plaster output records mixed y/y performance in Jan-Sep 2014 16
Gorazdze Cement invests in upgrading production lines, silos 16
Pfleiderer Grajewo to invest in existing facilities this year, but considers building or acquiring new plant 17
Nemex to spend €36.4mn on new factory 18
H+H Polska acquires Polish autoclaved aerated concrete producer Grupa Prefabet 18
Basic materials: Metal constructions 19
Steel product demand improves in H2/2013, further recovery expected in 2014, backed by new infrastructure projects 19
Grupa Kety expects good performance in Q4, develops new long-term strategy 19
Ferrum aims at reporting net profit at consolidated level each quarter this year 20
Basic materials: Building chemicals 20
Construction chemicals market forecasted to continue declining in 2014, to start recovering in 2015 20
Plastic construction material producer Gamrat sells PVC flooring division 21
Atlas eyes acquisition on Eastern markets 21
Installation materials 21
Professional lighting fixtures market value reaches PLN2bn-study 21
Lighting systems company ES-System expects sales growth in H2, plans to sell real estate asset 21
Lighting systems company LUG to set up new subsidiary abroad 22
Finishing materials 23
Pozbud to launch new production line, plans expansion in Norway 23
Pozbud targets 10-15% y/y rise of revenues this year 23
Ceramika Nowa Gala reports shrinking sales, plans further cost reductions 23
Grupa Ferro establishes distribution unit in Slovakia 24
Rockwool Poland to invest €38.3mn in Czech production plant 24

Table 1 Building materials output in 2011-2014, by product (volume, y/y) 9
Table 2 Price indices of production factors in construction in 2010-2014 (y/y) 9
Table 3 Investments added to the 2011-2015 road construction programme (PLN bn) 10
Table 4 Selected road statistics in 2003-2013 (annual, eop, km) 10
Table 5 Residential construction indicators in 2009-2014 (number, y/y) 12
Table 6 Cement production volume in 2011-2014 (thou tonnes, y/y) 14
Table 7 Cement sales in 2011-2014 (thou tonnes, y/y) 14
Table 8 Gorazdze Cement S.A. (Poland)- Key financials in 2012-2013 (PLN thou) 17
Table 9 Pfleiderer Grajewo S.A.-Selected financials in 2013-2014 (PLN thou) 18
Table 10 Steel production, consumption in 2010-2018f (mn tonnes, y/y) 19
Table 11 Ferrum S.A.- Selected financials in 2005-2013 (PLN thou, consolidated) 20
Table 12 ES-System S.A..-Selected financials in 2013-2014 (PLN thou) 22
Table 13 LUG S.A..-Selected financials in 2013-2014 (PLN thou) 23
Table 14 Ceramika Nowa Gala S.A.-Selected financials in 2013-2014 (PLN thou) 24
Table 15 Ferro S.A-Selected financials in 2011-2013 (PLN thou, consolidated) 24
Table 16 Rockwool Polska Sp. z o.o. (Poland)- Key financials in 2012-2013 (PLN thou) 25

Figure 1 Construction confidence indicator in 2003-2014 (pps) 6
Figure 2 Construction assembly production index in 2019-2014 (monthly, y/y) 7
Figure 3 Constructions sector - Selective indicators in 2005-2013 (annual, y/y) 7
Figure 4 Value of construction output by segments in 2012-2013 (PLN bn, % of total) 8
Figure 5 Construction and assembly production value in 2003-2013 (PLN bn, annual) 8
Figure 6 Construction gross output in 2007-2020f ($ bn) 11
Figure 7 Completed dwellings in 2005-2014 (number) 12
Figure 8 Dwelling stock in 2005-2012 (number of dwellings, usable floor space per person) 13
Figure 9 Cement production volume in 2001-2014 (mn tonnes) 15
Figure 10 Cement sales in 2002-2014 (mn tonnes) 15
Figure 11 Ready-mixed concrete output in 2007-2014f (annual, volume, y/y) 16
Figure 12 Ready-mixed concrete output in 2006-2014 (half-year, volume, y/y) 16
Figure 13 Lime and plasters output volume in 2011-2014 (9M, thou tonnes) 16

Number of pages: 25
Release Date: Fri, 31 Oct 2014