In the private field, Lafarge-Holcim merger should enter the finishing straight despite several question marks that emerged in March, while a US group announced the takeover of a major player on the ceramic tiles market.
Overall, 1Q moves signal 2015 could be a better year for the construction field, seriously damaged by the crisis.
- RON800m worth of highway contracts
The national road authority (CNADNR) in 1Q signed four contracts for the construction of almost 40 km of highways totally worth RON780 million, according to data compiled by ZF. All the four sections for which CNADNR signed contracts this year are on Transylvania Highway, set to connect Brasov, Targu-Mures, Cluj and Oradea cities. As 2014 was a year of decline for the construction industry, particularly for infrastructure works, these projects could be a breath of fresh air for the market. All the four sections should be ready in 12 months at the latest, so that their impact over the economy should be felt as soon as this year. In early April, CNADNR also signed a contract worth around RON400 million for the construction of Bacau beltway.
- Holcim and Lafarge find a buyer for assets put up for sale, including the Romanian ones
The merger between Switzerland’s Holcim and France’s Lafarge cement giants, expected to be inked in mid-2015, will bring a new player in Romania’s cement industry, Irish-held CRH, which agreed to pay EUR6.5 billion for several assets put up for sale by the groups of Switzerland and France, including Lafarge cement plants of Romania. The merger hit a snag in March, after Holcim asked for merger conditions to be revised. Eventually, Holcim and Lafarge reached an agreement to save the merger, but subsequently several majority stakeholders in the group voiced their discontent about a person not being named, yet, at the helm of the future LafargeHolcim entity. A final decision on the merger will be made in the upcoming period, after the groups’ shareholders meet to approve the deal.
- Transport Ministry has a final form for the General Transport Master Plan
The final version of the General Transport Master Plan, which was modified several times, stipulates the construction of 1,300 km of highway by 2030, double the level set in the initial form of the draft. For the railway sector, investments for the rehabilitation of 4,350 km of railway are stipulated, while the naval sector is set to see 752 km of waterways be built and 12 harbors be upgraded. Also, the Master Plan stipulates investments in 14 airports. Projects part of the Master Plan, expected to cost EUR48 billion, will be 15% to 20% funded from public money, 25% from EU funds, while the rest will come as loans from institutions such as the EIB and the EBRD. In April, the Master Plan is set to be approved by the European Commission after the Brussels institution studied the document and made some recommendations.
- A US group wants to take over ceramic tile producer KAI
Mohawk Foreign Acquisitions, part of US group Mohawk Industries, which manufactures carpeting, laminated and tile flooring, announced it wanted to buy Bulgaria’s ceramic tile producer KAI, present in Romania through KAI Ceramics and Progres Ceramica. KAI has two plants in Bulgaria with installed production capacity of 25 million square meters annually. The plants are located 140 km away from Bucharest, so that products sold locally are brought from these units. The company posted sales worth around EUR24 million in Romania in 2013, a sum that includes both the revenue generated by the Romanian KAI Ceramics subsidiary and the direct sales from Bulgaria to Romania.
- Housing constructions are in the black, infrastructure in the red
Total construction works posted a 12.9% increase in January against the year earlier period, this being the first time in the past three years the first month of the year brings a plus for this industry, according to National Statistics Institute data. Despite the increase, which reflected particularly in the area of housing construction (+47.6%) and non-housing construction, namely industrial, commercial or office spaces (+29.3%), infrastructure constructions were in the red in January, after falling by 11.8% against the same month of last year.
- Comarnic-Brasov highway postponed further
The deadline for decision making in the case of Comarnic-Brasov highway (53 km), which the state is trying for the third time in the past decade to build in concession, was pushed back to April, though PM Victor Ponta and Transport Minister Ioan Rus in early 2015 said the final decision about the fate of this highway would be announced on February 15. And this happened even as the private investors set to build it, French Vinci, Greek Aktor and Austrian Strabag, were designated back in December 2013. The other two attempts at building the highway, of 2003-2004 and 2010, respectively, failed. In each of the three cases, the Romanian state had French Vinci, one of the world’s biggest builders, as private partners.
- A Turkish builder erects ETI sweets plant of Craiova
Construction company Synergy Construct, controlled by two Turkish businessmen, will build, for EUR13 million, the Craiova sweets plant of ETI, a major player in Turkey’s food industry. The production unit, set to manufacture crackers, cookies and cakes, should be completed in 8 months (namely in October), according to data provided by Synergy. Projects Synergy has been involved in Romania in recent years include the parking lot of Piata Universitatii, Bucharest, the desulphurization plant of CET Timisoara, the consolidation of commercial and real estate project World Trade Center Constanta or the structure and installation works for shopping center Mega Mall.
- Assets of Petrom City builder, put up for sale
Casa de Insolventa Transilvania, the judicial administrator of builder Alpine SA, put up for sale assets with a starting price of EUR7 million of the Austrian-held company, which is under insolvency locally. The assets set to be sold include land plots with constructions in Mogosoaia, Chiajna and Timisoara, an asphalt station, construction equipment, trucks or containers. Alpine SA, a major local builder until 2012, erecting from highways to major office buildings, went insolvent in the autumn of 2013, just several months after its parent company, Austria’s Alpine, went bankrupt as it could no longer cope with debts.
- Drumul Taberei subway has tunnels completed between Academia Militara and Raul Doamnei
The two machines boring the underground galleries of the future Drumul Taberei subway mainland, known under the name of tunnel boring machines, TBMs, completed the tunnels between the future stations Academia Militara and Raul Doamnei. The underground galleries between Academia Militara and Eroilor are still unfinished. The future subway mainland, set to cost a total of around EUR600 million and be 6.2 km long, is set to be completed by late 2016.
- Sibiu-Pitesti highway will have a new feasibility study
Romania’s roads authority CNADNR on Wednesday awarded a contract of 29 million lei (EUR6.5 million), VAT not included, to the association of firms Spea Ingineria Europea (Italy) – Tecnic Consulting Engineering Romania, to revise the feasibility study of the Sibiu – Pitesti highway. The value of the contract stands at RON29.1 million (EUR6.5 million), with the new highway set to be 120 km long and connect the Sibiu beltway and that of Pitesti. The contract is divided into 5 sections and for two sections at the subway ends, Sibiu-Boita and Curtea de Arges-Pitesti, the feasibility study must be completed in 5 months at the latest, according to CNADNR, as the roads company wants to put up the two sections for construction auction soon. For the other three sections, located between Boita and Curtea de Arges, the feasibility studies must be completed in 12 months at the latest, so that the total duration of the contract is 17 months.
(English version by Catalina Apostoiu)