Romanian construction materials market down 56 pct between 2008 and 2012

After the economic crisis froze most of the Romanian real estate sector, the construction materials market dropped 56 percent between 2008 and 2012, according to a report by managerdecriza.com.

With numerous new real estate investments postponed or canceled, the market was mostly sustained by infrastructure developments and renovation works. However, most producers saw revenues go down as reduced budgets led to consumers opting for cheaper products. Given this, many producers, turned to external markets.

Based on data from the National Trade Register Office (ONRC), the large majority of construction materials producers reported sales of under EUR 500,000 in 2012 – 30.2 percent of the companies activating in this sector reported no sales, 41.1 percent reported sales of between EUR 0 – EUR 100,000 and 16.7 percent reported sales of between EUR 100,000 – EUR 500,000.

The crisis reduced the number of companies in this sector by 6 percent (2008-2012) and the number of employees by 45 percent. Last year some 60 percent of construction materials producers reported loss, their share being 12.4 percent higher than in 2008.

Local construction materials producers reported the highest net profit level in 2008 only to see it plunge by 88.5 percent in 2012. This is based on data collected by ONRC from 821 producers with turnovers of between EUR 380,000 and EUR 211 million.

Holcim Romania was the leader of the Romanian construction materials market in 2012 (in terms of sales) despite the fact that its turnover dropped 6.2 percent compared to 2011. The manufacturer reported an average debt collection period of 44 days (industry average was 97 days).

Five of the top ten companies reported profit in 2012. Lafarge Ciment was ranked in the first position followed by Carpatcement Holding. The combined profit of the first ten players in this industry was down 77.4 percent in 2012 compared to 2008.