Although the 50 leading builders saw a 20% increase in revenue on average last year, profits were down to one quarter of the 2011 level and the number of employees fell, too.

The last two years, 2012 and 2013 made the biggest impact on the local construction sector. Builder rankings changed, some surged and some are no longer among the leading companies in this business.

A lot of companies went insolvent, some of which major builders, like Romstrade, controlled by Nelu Iordache and Confort, of Georgica Cornu found themselves unable to pay their debts in 2012.

A shock on the international and local construction market this year was the bankruptcy of one of the largest construction groups in Europe, Alpine. Its local subsidiary, which had worked on important projects for both the government and private clients lost all its contracts one by one, regardless of the completion stage and went insolvent.

The 50 largest builders in Romania posted almost EUR3.5 billion revenue last year, up almost 20% on 2011, Business Construct has calculated based on the Trade Registry data.

On the other hand, the profit of the 50 shrank to one quarter of the 2011 level last year, to EUR41 million from EUR161 million.

The 50 largest builders include both foreign and Romanian businesses. Romanian-owned companies prevail in the ranking though, as 30 of the 50 are held by Romanian entrepreneurs, while the rest are subsidiaries of foreign groups, especially Austrian and Italian.

The leading construction company last year was Strabag SRL, one of the local subsidiaries of the Austrian group by the same name. Strabag SRL posted revenues of EUR315 million in 2012, more than double the revenue in 2011, because of the transport infrastructure contracts it had in Romania, among which several highway sections between Deva and Sibiu.

Another company of the group, Strabag AG, posted EUR176 million revenue last year, according to the Finance Ministry, taking the local business of Austria’s Strabag to almost half a billion euros.

“Construction market will remain at the same level as in 2012,” said Paula Rys, representative of Austria’s Strabag group.

Romania has a low indebtedness level, so it will continue to make public investments but at a slower pace than other countries in Eastern Europe, she added.

Second leading builder in 2012 was Romanian-owned Straco Group, of brothers Alexandru and Traian Horpos, which posted some EUR196 million revenue, almost ten times more than six years ago. Last year was a good year for Straco Group, which worked on highways like Deva-Orastie, since its revenue rose 123% on the previous year.

Other important builders are the two companies of Bacau businessman Dorinel Umbrarescu, Spedition UMB and Tehnostrade, with more than EUR260 million revenue and 1,400 employees in 2012.

The difficult construction market this year and especially the lack of new contracts have recently forced Umbrarescu to make the decision to lay off 1,000 Tehnostrade employees, because the builder only has one major contract left, a EUR96 million segment of the Lugoj-Deva highway, on which it has not started work yet.

A decline in the number of employees of the 50 top builders started showing last year, when it stood at 1,800 employees, so the companies considered by Business Construct had a little more than 26,000 employees together.

The construction sector is currently employing some 348,000 people, 16% fewer than in 2008, according to the Romanian Association of Construction Companies, ARACO.

On the other hand, productivity in the construction sector is down to almost half of the 2008 level and stands at about EUR1,786 per employee.

The only indicator to have risen during the crisis was the average wage in the sector from 1,506 lei per month in 2008 to RON1,749 in the first half of 2013, a rise cancelled by inflation and the devaluation of the leu against the euro.

The year 2013 was a disappointment for many builders in a number of respects.

The European funds for transport infrastructure were frozen in the first half, so no money came from Brussels to pay for highways or railways. The state budget did not spend too much, either, as the government cut capital expenses by 11% in the first nine months. This means it sacrificed investments to attain the budget deficit target agreed upon with foreign partners for the first three quarters, since budget revenue growth was half of the level expected.

“The year 2013 was extremely difficult, largely because of the lack of public investment. (…) Unfortunately, foreign investment saw significant decline compared with previous years and competition on projects that do come up is really fierce,” says Sibiu businessman Mircea Bulboaca, owner of builder CON-A, which posted EUR45 million revenue last year.

The company relies on contracts signed with private investors to keep going and only 3% of its revenue comes from public sector contracts.

The drop in public and private investment will continue to affect the construction sector in 2013, as well, after the 40% decline in 2009-2012, according to ARACO.

Whereas construction was a EUR15.3 billion industry in 2008, it will not exceed EUR8.5 billion to EUR9 billion in 2013, lower than last year.

Under the circumstances, the major local builders found themselves having to look elsewhere for work to keep afloat.

“We can feel the lack of investment funding, we are seeing fewer contracts but hope for things to improve next year. We focused on utility system work this year, such as sewage treatment facilities, because fewer and fewer civil engineering projects are available,” says Ilie Vasile, chief executive of Rotary Constructii, a company controlled by businessman Mihai Leonard Rotaru.

The builder posted some EUR40 million revenue last year, when it had 414 employees. It has recently completed the seismic retrofit and upgrade of a hospital in Bucharest and is working on a new wing of another hospital in the city.

Its projects also include seismic retrofit of the Bucharest City Hall building across the street from the Cismigiu Park in the center of the city and the Sector 1 City Hall building, which it began several years ago.

The construction sector, which could make a significant contribution to the growth of the gross domestic product, is now living off contracts awarded in previous years, which will be completed eventually. Few private investors are wiling to start construction of plants, residential complexes and logistics space, which means the government remains the only potential growth driver.

The year 2013 was a disappointment in this regard, so 2014 might be better, as it is an election year.

However, after the experience of 2012, another election year, which did not come with the expected growth, all builders are wondering what surprises the next year has in store.

“The year 2014 does not look like it will be better than this year, since there are no extensive public projects in sight that will help construction market grow and private sector projects will most likely remain at the current level, at best,” CON-A’s Bulboaca concluded.

(English version by Loredana Fratila-Cristescu)

Company

(owners’ country of origin)

Based in

2012 revenue (mln. euros)

2011

revenue (mln. euros)

2012 net profit (mln. euros)

2011 net profit  (mln. euros)

Number of employees in 2012

Number of employees in 2011

1

STRABAG SRL (Austria)

Bucharest

315

138

1

2

695

448

2

STRACO GRUP (Romania)

Bucharest

196

88

0.30

1

815

1,029

3

STRABAG AG – SUCURSALA BUCURESTI (Austria)

Bucharest

176

64

4

-1.9

0

0

4

ASTALDI – SUCURSALA ROMANIA BUCURESTI (Italy)

Bucharest

141

78

-27

-0.2

959

399

5

HIDROCONSTRUCTIA  (Romania)

Bucharest

140

236

4

12

5,478

6,528

6

SPEDITION UMB  (Romania)

Bacau

138

187

21

38

37

33

7

TEHNOLOGICA RADION  (Romania)

Bucharest

126

138

1

6

2,161

2,546

8

TEHNOSTRADE (Romania)

Bacau

123

135

16

29

1,364

1,293

9

DELTA ANTREPRIZA DE CONSTRUCTII SI MONTAJ 93 (Romania)

Bucharest

113

96

3

12

1,509

1,214

10

CONSTRUCTII ERBASU (Romania)

Bucharest

103

44

7

7

400

319

11

EURO CONSTRUCT TRADING 98 (Romania)

Bucharest

103

84

7

9

926

780

12

MAX BOEGL ROMANIA SRL (Germany)

Bucharest

87

49

1

1

80

70

13

VEGA 93  (Romania)

Galati

79

85

0.07

7

1,748

2,087

14

ROMELECTRO  (Romania)

Bucharest

78

83

2

11

88

96

15

BOG ‘ART (Romania)

Bucharest

76

77

0.40

0.69

0

425

16

ALPINE BAU – SUCURSALA MOGOSOAIA* (Austria)

Mogosoaia

71

40

-24

-1.8

0

0

17

FCC CONSTRUCCION – SUCURSALA BUCURESTI (Spain)

Bucharest

71

33

-0.2

-1.5

216

85

18

IMPREGILO – SUCURSALA SIBIU (Italy)

Sibiu

65

0

-3.7

-0.05

43

22

19

VIAROM CONSTRUCT (France)

Bucharest

62

33

1

0.29

236

192

20

TIRRENA SCAVI CONDOTTE COSSI (Italy)

Sannicoara

60

10

0

0

278

0

21

CONFORT (Romania)

Timisoara

57

124

-23

3

579

956

22

ALPINE* (Austria)

Mogosoaia

53

49

-8

-9

443

361

23

PA & CO INTERNATIONAL (Romania)

Oituz

51

61

0.46

6

646

431

24

BUILD CORP (Romania)

Iasi

51

63

0.75

1

219

420

25

TIRRENA SCAVI  SUCURSALA CLUJ (Italy)

Sannicoara

47

39

4

2

107

281

26

SOCIETATEA DE CONSTRUCTII IN TRANSPORTURI BUCURESTI (Romania)

Bucharest

45

25

0.05

0.35

504

548

27

TEMIX CONSTRUCT (Romania)

Bucharest

45

10

-10

0.04

0

32

28

CON-A (Romania)

Selimbar

45

55

3

2

0

494

29

TANCRAD (Romania)

Galati

44

37

2

3

216

216

30

VECTRA SERVICE (Romania)

Zarnesti

42

66

0.16

2

1,100

1,119

31

SHAPIR STRUCTURES (Israel)

Bucharest

41

12

0.26

0.26

455

186

32

ROTARY CONSTRUCTII (Romania)

Bucharest

40

35

0.74

1

414

356

33

ROMAIRPORT – SUCURSALA BUCURESTI (Italy)

Bucharest

39

41

9

9

159

181

34

APOLODOR COM IMPEX (Romania)

Bucharest

39

49

0.00

0.44

335

410

35

TRANSIM GRUP (Romania)

Pitesti

37

31

0.01

0.03

159

246

36

TECHNOCER (Romania)

Nadrag

37

31

7

5

240

225

37

AEDIFICIA CARPATI (Romania)

Bucharest

35

73

5

6

631

729

38

Porr Construct (Austria)

Bucharest

33

55

0.09

-11

226

258

39

TEL DRUM (Romania)

Alexandria

33

46

2

2

610

754

40

ASTALDI SUCURSALA GHEORGHE PETRASCU BUCURESTI (Italy)

Bucharest

31

38

20

-9

33

273

41

SELINA (Romania)

Oradea

31

35

3

5

526

551

42

ANTREPRIZA DE REPARATII SI LUCRARI A R L CLUJ (Austria)

Cluj-Napoca

30

31

2

2

307

305

43

ACOMIN (Romania)

Deva

30

44

0.35

0.93

367

300

44

P.A.B. ROMANIA (Romania)

Arad

29

32

0.74

2

227

165

45

COLLINI LAVORI – SUCURSALA BUCURESTI (Italy)

Bucharest

28

0

2

-0.2

17

2

46

CAST (Romania)

Banesti

28

35

2

3

224

192

47

NEMAR EDIL-CONSTRUCT (Romania)

Bucharest

28

8

0.72

0.48

30

10

48

KREMSMUELLER ROMANIA (Austria)

Ploiesti

27

18

-0.4

-0.03

220

272

49

HOCHTIEF SOLUTIONS – SUCURSALA BUCURESTI (Germany)

Bucharest

26

30

2

6

75

78

50

SWIETELSKY BAUGESELLSCHAFT (Austria)

Bucharest

26

2

-2

0.03

13

0

Total

3,451

2,873

41.21

161

26,115

27,917

* The company ceased operations in 2013                                                                      

Source: Trade Registry

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