“2013 was a sacrifice year. [The state’s] investments were sacrificed in favor of financial and fiscal stability. This is not necessarily a bad thing, but for us construction market players it has not exactly been a good thing,” Lupusor says.
The Romanian state cut its capital spending, i.e. public investments, by 11% in the first nine months of this year. This was done in order to keep within the budget deficit target agreed with external partners at a time when the growth rate of budget revenues was half the original forecast.
Baumit recorded an around EUR28.5 million turnover last year, according to Finance Ministry data. In 2013 volumes sold by Baumit on the Romanian market fell by around 10% (according to company estimates) amid a general decline of the market.
“Less is being built than last year. The state has not invested anymore and private resources are also limited,” Lupusor says.
Baumit says a problem for the market this year is the low solvency of certain companies in the sector.
“ 2013 has been rich in insolvencies, which affected us because in the construction sector the way payments are made affects producers. Materials are not paid upfront, but within a deadline which tends to be extended, and sometimes debt repayment is very unreliable,” Lupusor says.
Despite 2013 being a “difficult” year, the head of Baumit Romania believes next year could bring a slight recovery of the construction sector.
“I remain an optimist although I don’t have strong arguments for that. Demand is there, but the problem is with financing,” Lupusor says. The company expects a turnover rise of up to 10% for next year.
Baumit Romania, which is part of Austrian group Schmid Industrie Holding, has two dry mortars plants in Romania and a plant for paint and decorative plaster.
Baumit’s plants in Romania have this year worked at around 50% of their installed capacity, so the company does not plan investments in new production facilities, at least in the short and medium term.
Sales to distribution firms and to DIY chains account for more than 80% of the company’s turnover, while the rest is accounted for by deliveries to constructors and exports.
In Romania Baumit competes against companies such as Henkel (Germany), AdePlast (controlled by Romanian Marcel Barbut) and Duraziv (Romanian Daniel Guzu).
(English version by Daniela Stoican)