Compared with the boom year 2008, when the market had reached a peak of EUR5 billion, almost 40% of the value of the industry was wiped out during the crisis and forced many players to produce below potential capacities.
Last year’s main challenge in the building material market was the lack of major projects, compared with the boom period. Thus, market players bet on small, individual projects carried out by natural persons.
“2014 will be a challenging year for the market, which will most likely stagnate against 2013. Highway projects have not started fully, yet, the number of house building licenses declined last year, the money for public work rehabilitation has not arrived, yet, and on the thermal rehabilitation segment the released sums are small,” says Claudiu Georgescu, president of the Association of Building Material Producers in Romania (APMCR).
He adds the main challenge faced by building material producers is survival, as the market has been witnessing a genuine “price war” on recent years’ low demand, which is likely to also lead to lower product quality.
“The cannibalization among players is also emerging, with the most powerful ‘eating up’ the weakest,” states Georgescu.
As domestic market demand has contracted in recent years, many building material producers have eyed deliveries to other countries. Thus, many companies have started betting on exports for growth. Nonetheless, exports do not hold a significant weight in total sales.
In 2013, building material exports reached only around EUR100 million, according to the latest data provided by APMCR.
(English version by Catalina Apostoiu)