Romania Construction Materials Report - Q1, 2014

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Romania Construction Materials Report - Q1, 2014

This report covers market developments for Romanian construction materials in Q4 and full year 2013, as well as the data available as of April 2014.

The building materials market paralleled the poor performance of the construction sector in Q4 and full-year 2013. The construction works contracted by 1.5% year on year in Q4 and by 0.6% year on year in 2013. Despite the slight annual decline recorded in 2013, activity in the sector seems to have stabilised at low level. The long-expected large investments in infrastructure projects have not started yet, while thermal rehabilitation works advance at sluggish pace. Accordingly, the construction sector mostly relies on public utilities projects, financed by local administrations, and private residential and non-residential investments.

The cement market continued downwards in 2013 and prospects for 2014 are rather pessimistic, considering that few large infrastructure projects were launched last year. Even though some 108km of highways were inaugurated in Romania in 2013, which is a better performance than in the previous years, there was little impact upon the activity of the cement producers, as most works were in the final stage, when the cement consumption is low.

The masonry market inched up by 1% year on year in 2013, partially on low base comparison and also explained by rising prices. The activity in the construction of buildings remains low, as the number of finished dwellings dropped by 33.5% year on year in Q4 and by 12.7% year on year in full year 2013. On the upside, there are grounds for some recovery in the segment, considering that the number of residential building permits increased on an annual basis for the third quarter in a row in Q1/2014.

Key points:

• Construction materials market value might drop below EUR 3bn in 2014 - producers’ association
• Cement market shrinks year on year in volume, value terms in 2013
• Masonry market inches up 1% year on year in 2013-estimates
• Lafarge, Holcim might need to sell 43% of capacities in Romania amid merger
• Turkish investor buys Praktiker’s 27-store chain in Romania


Table of Contents

Contents
Executive summary 4
Market overview 5
Construction materials market value might drop below EUR 3bn in 2014- producers’ association 5
Construction materials output up y/y in 2013, on low base comparison 5
Producers’ prices inch up 1% y/y in 2013 7
Foreign trade with construction materials is roughly stagnant y/y in 2013 7
Construction works index drops 1.5% y/y in Q4/2013, bringing down full year annual performance 8
Number of residential permits rises y/y for third consecutive quarter in Q1/2014 9
Number of finished dwellings continues on negative y/y path in Q4/2013 10
Cement, concrete 11
Cement market shrinks y/y in volume, value terms in 2013 11
Lafarge, Holcim might need to sell 43% of capacities in Romania amid merger 12
Holcim’s cement sales volume down 4.3% y/y in 2013 12
Lafarge Romania reports 16% y/y drop of cement sale volume in 2013 12
Ceramic bricks, tiles 13
Masonry market inches up 1% y/y in 2013-estimates 13
Turnover of Ceramica Iasi rises 12.9% y/y in 2013, net profit diminishes 14
Wienerberger’s financial results in Romania improve y/y in 2013 14
Siceram projects 5% y/y increase of sales in 2014, after 3% y/y revenue growth in 2014 14
Thermal insulation, finishing materials 14
Saint-Gobain’s revenues in Romania reach EUR 160mn in 2013 14
Adeplast reports 65% y/y higher sales in Q1/2014 15
Pavers producer Symmetrica records y/y higher volume, value sales in 2013 15
Construction materials, DIY retailers 15
Romanian DIY retailer Dedeman moves on with expansion locally, plans to approach foreign markets 15
BauMax is considering exit from Romanian market 15
OBI is reportedly preparing to exit Romania 15
Turkish investor buys Praktiker’s 27-store chain in Romania 16

Table 1 Non-metallic mineral products output in 2008-2014 (monthly, y/y) 6
Table 2 Construction sector performance in 2007-2013 (y/y) 9
Table 3 Construction works index in 2011-2013- Quarterly performance by structure (y/y) 9
Table 4 Construction works index in 2011-2013 - Quarterly performance by destination (y/y) 9
Table 5 Licenses for residential buildings issued quarterly in 2011-2014 (quarterly, number, y/y) 10
Table 6 Completed dwellings per type of financing in 2011-2013 (number, y/y, quarterly) 10
Table 7 Completed dwellings per type of financing in 2007-2013 (annual, y/y) 11

Figure 1 Market Demand (Apparent Consumption) of selected construction materials in 2007-2017f (mn 1995 USD) 5
Figure 2 Manufacturing of other non-metallic mineral products - Monthly output indices in 2007-2014 (2010=100, unadjusted series) 6
Figure 3 Production (Gross Output) of selected construction materials in 2007-2017f (USD mn) 6
Figure 4 Construction materials- Producers' price index in 2007-2014 (monthly, 2010=100) 7
Figure 5 Foreign trade with non metallic mineral products in 2005-2013 (EUR mn, y/y) 7
Figure 6 Construction works index, rolling 12M in 2005-2013 (2010=100) 8
Figure 7 Construction works index in 2005-2014 (monthly, y/y) 8
Figure 8 Licenses for residential buildings issued in 2007-2013 (number, monthly) 10
Figure 9 Production of cement in 2006-2013e (annual, volume, y/y) 11
Figure 10 Market demand for ceramic products in 2007-2017f (USD mn) 13
Figure 11 Ceramic products- Self Sufficiency Index in 2007-2017f (%) 13

Number of pages: 16
Release Date: Sun, 04 May 2014