On the other hand, another deal fell through, after failing to the get the Romanian competition watchdog’s approval – Wienerberger’s planned takeover of rival brick maker Brikston. Two management changes on the paint and cement market round up the landscape of this sector, and the announcement of a new EUR50 million production facility encouraged manufacturing investments.
CEO changes
Two changes of CEO happened on the construction materials marker in 2018. Cement and concrete manufacturer Holcim, member of the LafargeHolcim group in February appointed Horia Adrian to run the local operations. He replaced Sofiane Benmaghnia.
In May, paint and coatings manufacturer Policolor appointed David Jordan as CEO, replacing Marius Vacaroiu.
Payment delays lead to insolvency
Construction company Euro Construct Trading ‘98 based in Bucharest filed for insolvency. It said this was due to the beneficiaries’ failure to pay for the work done even as late as three years after completion. Euro Construct Trading ’98 is held by Dan Besliu and Sorin Vulpescu. The two also own the Golden Blitz restaurants in Bucharest.
Frozen deal
This year came with a first, the Competition Council did not greenlight the acquisition of brick maker Brikston by rival Austrian-held Wienerberger. A year ago, the Wienerberger group announced it intended to buy Brikston from ADM Capital. The competition Council launched an investigation into the acquisition saying it was likely to hinder competition, so the two parties eventually canceled the deal. Brikston is still held by ADM Capital.
Insolvency hurts construction sector
Half of the wood and construction supplies wholesalers have a higher than average insolvency rate, they are experiencing a decline in revenue and their debt to the state budget reached an eight-year peak in 2016-2017, according to a Coface survey.
Acquisition on paint market
Dutch-held paint and coatings manufacturer Akzo Nobel, which has distribution activities in Romania, bought producer Fabryo Corporation from Sweden’s Oresa Ventures. The deal is worth more than EUR40 million, according to ZF estimates based on market data. The deal includes two production facilities and six distribution centers for decorative paints, achieves and mortars.
New Romanian leader in construction sector
Sibiu-based builder CON-A of entrepreneur Mircea Bulboaca beat local construction rivals Bog’Art, Constructii Erbasu and Hidroconstructia. CON-A posted almost RON550 million revenue in 2016, up 51% on the previous year. Its growth came at a difficult time for the local construction market, which is facing a worsening shortage of labor and a significant decline of public investment, especially in infrastructure.
Manufacturing investment
Denmark’s Rockwool group is starting construction of a mineral wool plant near Ploiesti and expects production to begin in the third quarter of 2019. The investment in the Rockwool plant amounts to about EUR50 million and the builder of the new facility is CON-A. The plant will be located on a 30-hectare plot and generate about 150 jobs directly and 300 services and logistics jobs indirectly.
Infrastructure disaster: 30 kilometers of highway in one year
The year 2018 came with only 30 kilometers added to Romania’s highways, the sections 3 and 4 of the A10 Sebes-Turda. Meanwhile the EUR35 million funding the World Bank was to provide to Romania to consolidate a funding mechanism for the Comarnic-Brasov project will no longer be used, after the Transport Ministry and the Public Finance Ministry dropped the option. This is the fourth failure to get the Comarnic-Brasov highway going.
From DIY retail to construction
Brothers Dragos and Adrian Paval now own 59% in brick maker Cemacon Cluj, through PIF Industrial and Dedeman. The two became the main shareholders of Cemacon in late 2017, following the purchase of 13.4 million shares in a single deal, going from the previous 29% to 40.7%. They bought more in the company so now own almost 60%.
Production resumes at former Ruukki plant
Finish-held Peikko bought the steel structure plant in Bolintin-Deal once held by another Finnish company, Ruukki. Peikko wants to begin operations in Romania in the first quarter of 2019 and invest EUR10 million to resume production until then. The Peikko Group Corporation bought the plant from the SSAB Group, which also includes Ruukki. The facility built in 2007 ceased production more than three years ago, following Ruukki group decision.
(English version by Loredana Fratila-Cristescu)