“After the IT sector, construction should be the crown jewel and push the GDP towards growth,” said Shlomi Mintzer (41) the Israeli executive in charge of Danya Cebus’ local operations for three years. There are a lot of things to build in Romania, he added.
Construction sector showed its potential to stimulate the economy during the boom days, accounting for 11% of the gross domestic product in 2008 and contributing one third of the economic growth at the time, which stood at more than 7%. Last year, the sector only generated 6.3% of the GDP without contributing to the economic growth in any way. Construction sector stood at EUR8.9 billion in 2014, while Romania’s GDP at more than EUR151 billion, according to Eurostat.
If construction manages to grow by 10% to 15% and reach EUR9.8 billion to EUR10.2 billion, it should contribute 0.6% to 0.9% to this year’s economic growth, according to ZF and Business Construct estimates.
A 10% to 15% growth is plausible, given the latest developments.
Shlomi Mintzer says he has noticed a rebound of the construction sector over the last two years, mainly because of foreign investors. They started with commercial property (shopping centers, office space) and continued with residential projects last year.
Many such developments are actually projects revived on sites bought before the crisis. One example is the GVITown residential project developed by Israeli investors in a EUR20 million investment in Bucharest. Danya Cebus was chosen to build the apartment buildings in that complex.
Mintzer is talking about a resurgence of the local construction sector after having seen it both during the boom and during decline. He first came to Romania in 2008 to spend a year and a half in Bucharest supervising the work on the AFI Palace Cotroceni. He then moved to Russia where he stayed a year and a half supervising the opening of the Moscow City shopping center, working for the beneficiary, AFI Development, this time and not for the builder.
He returned to Romania, as project manager for Danya Cebus and after a year, in 2012, took the reins of the local operations of the builder.
Danya Cebus posted about EUR53 million revenue in Romania last year, an increase of 20% on 2013 and budgeted at least 25% growth in 2015. Where will this growth come from? It signed big contracts and has about EUR100 million worth of orders at the moment, Shlomi Mintzer said.
(English version by Loredana Fratila-Cristescu)