The construction materials industry is a sector where Romanian entrepreneurs cannot compete at the top where Swiss-held Holcim, German-held Carpatcement Holding and French-held Lafarge are impossible to dislodge, having kept the first three positions in the last few years including 2013.
Last year was not easy for the top three companies in the cement business, either, as their volumes fell by 5% to 19%. Profit margins were at their lowest in years, or less than 10%, considering the construction sector was not free of problems last year and the cement sector put at EUR500 million to EUR600 million fell by 5% to 8% in 2013.
The largest company in the construction material industry after the three cement producers is German-held Henkel, which makes adhesives. The company posted EUR139 million revenue last year, up by more than 2% on 2012, which includes its fast-moving consumer product business.
Fifth and sixth are two subsidiaries of the French Saint-Gobain group: Saint-Gobain Glass, which makes glass in Calarasi and ended 2013 with EUR72 million revenue and Saint-Gobain construction products, which posted more than EUR63 million revenue from plasterboard, plaster, mortars and insulating materials.
“We don’t think the market will witness significant growth this year so we only see our revenue increasing slightly in 2014, largely because of promoting new products and solutions,” says Constantin Hariton, general manager of Saint-Gobain Construction Products – Rigips Business Unit.
The most powerful Romanian entrepreneur in the construction material industry last year was again AdePlast owner Marcel Barbut, whose company posted EUR57.3 million revenue, up 37% on 2012, after an investment in opening several plants on his three industrial sites in Oradea, Ploiesti and Roman.
The other four Romanian-held companies among the leading construction materials producers are Arcon (Ioan Titeiu), Soceram (Emil Tufan and Mihai Anastasescu), Bilka Steel (Horatiu Tepes) and Elis Pavaje (Emil Gota). In all, the five Romanian entrepreneurs posted EUR160 million revenue together in 2013, or just 13% of the total revenue of the top 20 companies.
“There are a number of reasons [why there are only five Romanian entrepreneurs in the top 20] and they include the government steps, which did not encourage entrepreneurship, and business education, which is a problem,” Horatiu Tepes said.
“What they are teaching in schools is not what happens in the everyday life.”
His company, Bilka Steel, whose products include metallic roofing, and which posted almost EUR24 million revenue last year, has been growing during the crisis and became a top 20 construction material producer last year, after an over 40% increase in revenue, according to Finance Ministry data.
“We are seeing a slight growth of the construction materials market in 2014. Optimism helps, and so do steps like tax exemption for reinvested profit. We budgeted 21% growth in revenue for Bilka Steel at the beginning of the year but we’ve already grown 40% in the first half,” Tepes added.
The other companies to have posted significant rise in revenue in 2013 besides Bilka Steel and AdePlast include Ruuki Romania (the local subsidiary of Finland’s Rautaruuki), which posted EUR44.7 million revenue, up almost 37% and Soceram, which ended the year with EUR27.4 million revenue, an increase of almost 21% on 2012.
The construction materials market, which accounts for about one third of the total construction industry, stood at some EUR3.2 billion last year, almost flat on 2012.
(English version by Loredana Fratila-Cristescu)