Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
sector in Romania
Overview 2011 and Outlook 2012 2015
November 2012
Client: Trade and Investment Promotion Section of the Republic of Poland (WPHI)
Construction in Romania
2011
www.marketscope.ro
TABLE OF CONTENTS
___________________________________________________________________
I.
ROAD BITUMEN........................................................................................................................................................11
CEMENT, CONCRETE, AGGREGATES.......................................................................................................................15
C e me nt...........................................................................................................................................................15
C oncre te and aggre gate s .................................................................................................................18
WALL BUILDING MATERIALS (WBM).....................................................................................................................21
Wal l bui l di ng mate ri al s ove rvi e w ...............................................................................................21
AAC ....................................................................................................................................................................24
B ri cks...............................................................................................................................................................28
B ri cks and AAC - Product range , ge ograp hi cal cove rage and pri ci ng ............30
STEEL.......................................................................................................................................................................32
ROOFING SOLUTIONS AND STRUCTURAL ELEMENTS..............................................................................................34
Roof ti le s (me tal l i c, ce rami c, concre te, bi tumi no us) ..................................................34
Struct ural e le me nts ..............................................................................................................................39
BUILDING ADHESIVES..............................................................................................................................................42
INSULATING WINDOW AND DOOR SYSTEMS...........................................................................................................47
Profiles for insulating windows and doors...........................................................................................47
Float glass and insulated glazing............................................................................................................51
Thermal insulating carpentry works......................................................................................................54
Fittings..............................................................................................................................................................54
PU foams..........................................................................................................................................................55
INSULATING MATERIALS...........................................................................................................................................56
PAINTS, DECORATIVE PLASTERS AND OTHER WALL FINISHING SOLUTIONS.........................................................61
Pai nts ...............................................................................................................................................................61
De corati ve pl aste rs ...............................................................................................................................66
Painters fillings and plasterboards........................................................................................................68
FLOORING SOLUTIONS.............................................................................................................................................71
Flooring market overview Structure of analyzed segments......................................................71
Ceramic tiles (for floor and wall).............................................................................................................71
Wall-to-wall carpet........................................................................................................................................73
Parquet and other flooring solutions & finishing products............................................................74
CONSTRUCTION EQUIPMENT...................................................................................................................................76
He avy constructi o n e qui pme nt ....................................................................................................76
Professional portable electric power tools..........................................................................................79
IV.
Construction in Romania
2011
www.marketscope.ro
ROMANIA
REPUBLIC
OF
MOLDOVA
HUNGARY
Capital: Bucharest
Major cities:
Constanta, ClujNapoca, Timisoara,
Iasi, Craiova, Galati,
Brasov, Ploiesti, Sibiu
UKRAINE
Language: Romanian
Currency: RON
(1 EUR = 4.54 RON in
October 2012)
SERBIA
The Romanian economy has registered strong and continuous growth in recent pre-crisis
years, the countrys gross domestic product (GDP) doubling from 2004 to 2007 and thus
reaching a value of 124 billion EUR, which exceeded the expectations of economy
specialists. Larger increase than expected was attained in 2008 too, as the GDP increased
by almost 9% in the first semester of year 2008, while the real terms evolution at year-end
was +7% (and brought the GDP value to a record of 137 billion EUR).
However, in the first year with full effects of the world economic crisis, GDP dropped by
almost 7% and economy was able to get back to positive evolution only in year 2011.
However, year 2012 pointed out once again the weaknesses of the Romanian economy, as
Q3 2012 brought decrease in terms of quarterly GDP (vs. Q3 2011), leading to a modest
overall evolution of 0.7% expected by the end of the year.
Evolution of Romania's GDP in years 2004 - 2015
(billion EUR)
180
10%
160
8%
140
6%
120
4%
100
2%
80
0%
60
-2%
40
-4%
20
-6%
0
GDP (bil EUR)
A nnual dynamic**
Construction in Romania
2011
2004
2005
2006
2007
2008
2009
2010
2011
2012*
2013*
2014*
2015*
60.8
79.7
97.8
123.7
136.8
118.3
123
136.5
136.7
144.2
154.9
165.9
8.30%
4.20%
7.90%
6.20%
7.10%
-6.60%
-1.60%
2.50%
0.70%
2%
2.50%
3.30%
www.marketscope.ro
-8%
* Note: Years / Periods marked with * (e.g. 2012*) represent forecasted values.
** Real dynamic (not calculated for evolution of GDP in EUR, but to GDP in RON current prices)
Source: National Institute of Statistics, National Forecast Committee
Construction in Romania
2011
www.marketscope.ro
In 2007, Romania had one of the largest economic growth recorded in the European Union
(+6%), which was still behind the dynamic economies of Slovakia, Latvia, Lithuania, the
Czech Republic and Poland. However, the progress in the past years is undeniable: the GDP
in Romania has exceeded that of Hungary since year 2006, and has been directly competing
with that of the Czech Republic starting with year 2007.
On the other hand, the per capita indicators, a direct measure of a countrys living
standards, are not at the same level as the ones of the other newly admitted countries (the
EU admission waves of 2004 and 2007) Romania currently has one of the lowest values of
the GDP per capita among members of the EU. Although it has increased in real terms and
in value, reaching a level of around 6,000 EUR in 2007-2008, the Romanian GDP per capita
is 4 times smaller than the EU27 average.
Romanias status as a net importer will most likely maintain on medium term.
Unemployment rate has begun to rise starting with the end of year 2008 and reached an
alarming level of 8% in 2009. At present, the indicator is on a right path towards reaching
again the 5% mark.
Foreign investors have long considered the economic environment of Romania as being too
unstable and risky (from the administrative and legal point of view, and also due to
corruption), but the strong economic growth and the privatisation of the large state-owned
companies (oil PETROM, methane gas DISTRIGAZ, metallurgy SIDEX, automobiles
DACIA, banks BCR, telecom ROMTELECOM) have drawn further important investments,
the peak being reached in 2006, when foreign direct investments cumulated over 9 billion
EUR.
More details on the recent and forecasted evolution of the main macroeconomic indicators
of Romania are comprised in the table below.
2004
2006
2008
2010
Indicators / Year
21,673
60.8
8.3
21,065
97.8
7.9
20,423
136.8
7.1
19,734
123.0
-1.6
19,043
136.7
0.7
19,000
165.9
3.3
6.6
n/a
9.2
n/a
11.9
9.3
4.1
7.2
3.4
23.4
6.8
6.6
4.9
3.5
1.3
21.4
26.1
5.1
7.9
6.3
3.7
4.8
-6.3
-7.3
-2.3
6.1
8.0
4.21
0.5
-15
2.4
1.7
3.4
5.1
4.45
-7,346
-14,896
-22,709
-9,509
-9,945
-12.5
6.2
202
10.2
-15.2
5.2
325
9.0
-16.6
4.4
478
16.5
-7.7
7.0
452
-3.7
-7.3
5.2
474
2.8
3.1
1.4
6.1
3.0
2.8
2.5
4.40
13,580
-8.2
4.2
554
1.3
2012*
2015*
Source: National Institute of Statistics, National Forecast Committee, Eurostat; National Bank of Romania
By way of conclusion, the next 2 - 3 years are expected to bring up to 2 - 3 % y-o-y growth
for GDP, with a slow pace of foreign investments (despite Romania remaining fairly
attractive for some categories of investors, the difficulties in the European economy may
not allow for impressive flows of foreign capital into Romania on the short run). The country
appears to be on the way to recovering from the crisis and thus the next 2 3 years are
Construction in Romania
2011
www.marketscope.ro
critical in terms of proving whether the economy can be solid and reliable for investors or
not.
Construction in Romania
2011
www.marketscope.ro
II.
High
potential
sector within
national
economy
2007
2008
2009
2010
Total
Buildings
-8%
5%
5.50%
6%
0.50%
2%
3.50%
Civil engineering 20.17%18.17% -12.20 -3.10% 2.60% 9.50% 7.80% 7.50% 7.30%
Source: National Forecast Committee, National Institute for Statistics
Engineering
construction
remains the
segment with
a more
robust
evolution
(moderate
ups and
downs, as
Construction in Romania
2011
The financial crisis may have indeed crippled the construction sector, but
due to the specific local conditions, there have also been opportunities of
countermeasures to it, especially related to funding from the public sector
focused on major infrastructure projects. On the other hand, Romania has
yet to draw considerable funding from the European funds for
infrastructure and regional development; a positive change in this aspect
would represent an important growth trigger for the construction sector
not only in the context of the crisis, but on the medium and long-term also,
given the severe lack in all segments of construction (especially
infrastructure and housing).
www.marketscope.ro
opposed to
pikes for
buildings
segment,
especially
residential).
The boom
registered by
construction
is backed up
by a real
need for
quality and
affordable
housing and
infrastructur
e. In postcrisis years it
is envisaged
that the lack
in
infrastructur
e and
housing
segments
would further
propel
dynamic
growth
paces.
The capital
Bucharest
concentrates
a high share
of
construction
activity
Construction
through own
management
have
increased
considerably
in value, but
Construction in Romania
2011
Unfortunately, the country has not proved the capability of creating and
managing an efficient system for accessing EU funds to a larger extent,
thus the revival of the construction works value in years 2011 and 2012
remains modest.
As illustrated in the following graph, the total value of construction works
in 2007 reached 19 billion EUR, an astounding 54% growth in EUR value
from the 2006 figure. Although the dynamics illustrated in the graph is
influenced by the evolution of the RON/EUR exchange rate, there is no
doubt about the strong real growth of this sector, especially during period
2006 2008.
24.1
25
18.7
20
16.5 17.0
12.2
15
10
18.1
4.3
4.9
5.5
6.6
8.2
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Source: National Institute of Statistics, Marketscope estimates (for year 2011)
The sector lost works worth almost 8 billion EUR in the 2009 2010
timeframe, with the next couple of years bringing similar yearly levels
(around 17 billion EUR). The value of construction works is expected to
grow more significantly in real terms no sooner than years 2013 2014.
With respect to construction works distribution, the Bucharest-Ilfov region
concentrates most of the construction works value (approximately 30%).
At county level (excluding Bucharest and the county of Ilfov), the largest
concentrations of construction works were recorded in Cluj, Constanta and
Timis (counties with large cities and strong economic growth).
The following table breaks the total value of construction works by activity
new construction versus maintenance and separates construction
works on contract from those performed through own management.
Although there was some increase in the latter starting with 2006, the
share in the total value of new construction is still inconsequential (<1%).
As for maintenance and current repairs, their share of the total was of 18%
in 2010 (rather steady in the past 2 - 3 years).
The evolution of the construction works value, broken down by
activity (million EUR)
www.marketscope.ro
are still
inconsequent
ial
Y200
Y2004 Y2006 Y2007 Y2008
2
Total
construction, of 4,928
which:
New construction
and capital
repairs, of which:
- on contract
- own
management
Maintenance and
current repairs
18,72
5
Y2009
Y2010
6,609
12,19
2
24,12
8
18,099
16,484
3,621
5,114
14,527
13,491
3,534
5,069
14,455
13,414
87
45
76
104
128
71
77
1,307
1,495
2,682
3,727
4,349
3,572
2,993
Nonresidential
building is
not the main
driver for
growth
anymore
Residential buildings
90%
33.0%
80%
70%
60%
50%
24.0%
Transport infrastructure
25.0%
40%
30%
20%
6.0%
2.0%
11.0%
10%
0%
2002
2004
2006
2007
2008
2009
Complex constructions in
industrial areas
Other civil engineering
constructions
2010
The number
of completed
dwellings in
2009 has not
Construction in Romania
2011
www.marketscope.ro
dropped
massively, as
many works
were started
in peak
years.
50%
70,000
40%
60,000
30%
50,000
20%
40,000
10%
30,000
0%
20,000
-10%
10,000
-20%
0
Number of new dwellings
Annual dynamic
2001 2002
2003 2004
2005
2006
2007 2008
2009
2010
2011
-30%
26,811 27,722 29,125 30,127 32,868 39,638 47,299 67,255 62,520 48,862 45,419
1.6%
3.4%
5.1%
3.4%
-7%
-22%
-7%
Concentratio
n of new
dwelling
construction
Construction in Romania
2011
Key information
in Q3 2008 Q1 2009, works in approximately 30% of the
construction sites in Romanias biggest cities were suspended due
to lack of financing; construction companies focused on finishing
www.marketscope.ro
10
Key information
Infrastructure
Key information
Construction in Romania
2011
www.marketscope.ro
11
Construction in Romania
2011
www.marketscope.ro
12
III.
Overview
Market size
and forecast
Volume peak
in 2008 to be
reached
again by
2015
Construction in Romania
2011
www.marketscope.ro
13
By origin
By type
By usage
Romania has its own bitumen producing facilities both for polymerized
and oxidized bitumen, but overall production level has suffered a major
decline when the top player ARPECHIM was shut down in year 2011. In
the second half of the 2001 2010 decade, demand has started to
exceed production capacity for bitumen in Romania, which allowed for
the consolidation of the bitumen importers segment. Imports used to
hold approximately 50% - 65% of the volume before ARPECHIM was
closed. At present, road construction virtually relies only on imported
bitumen.
Within the road construction sector, one can notice two main product
categories, namely normal bitumen and polymer modified bitumen
(PMB). The latter is estimated to represent 25 45% of the total market
volume, although market participants do not reach consensus on this
issue and thus this share could be higher, given recent technical
specification in road construction regulations.
Around 90% of the total volume of bitumen sold in Romania is used in
road construction, while the rest is used mainly in waterproofing
solutions production (either waterproofing membranes or bitumen
primers).
Historically, demand for high quality bitumen usually used for
waterproofing or road surface courses has been purveyed by imports,
with local production meeting demand for lower quality bitumen such as
bitumen for binder courses for roads.
Competitor
landscape
Domination
of imports:
specialized
importers
and direct
imports of
Construction in Romania
2011
www.marketscope.ro
14
road
construction
companies
Largest specialized importers are either located at the Black Sea (the
main two bitumen terminals are controlled by BITUM TRADING and
SARGEANT MARINE), or in the Western or Northern parts of Romania (in
their case, the primary distribution is operated by road): EURO ACTIV,
INSERCO, ECO-VEGA CONSTRUCT, TRANS-BIT, PNEURUS, etc. Other
noticeable bitumen traders include UNICOM HOLDING and MASTERCHEM
OIL.
A category of bitumen users that may not resort to local suppliers is
represented by large road construction companies operating direct
imports (both multinationals and local businesses), which use bitumen
in asphalt mixture production, such as ASTALDI, MAX-BGL, STRABAG,
COLAS, ADP CONSTANTA, ANCORAD OLTENIA etc. (the latter two are
both part of COLAS Romania).
BITUMEN LOCAL PRODUCERS
VEGA
www.eurobitum.co
m
PETROLSUB
DELTA ACM
Construction in Romania
2011
www.marketscope.ro
15
SARGEANT
MARINE
www.sargeant.ne
t
EURO ACTIV
Zalau
www.bitum.ro
Pricing
Main market
driver: Road
infrastructure
in Romania
Construction in Romania
2011
www.marketscope.ro
16
Construction in Romania
2011
www.marketscope.ro
17
Three companies dominate the Romanian cement market; they are the
subsidiaries of some of the largest players on the international market of
construction materials, namely LAFARGE, HEIDELBERG CEMENT and
HOLCIM. These companies entered the Romanian market in 1997-1998 by
purchasing the existing cement factories (built before 1989), which they
have modernised and expanded since.
Cement consumption in Romania has witnessed a dynamic upward trend
starting with year 2000, reaching +20% yearly growth rates in 2006 and
2007. Although expected to be a year of strong growth, 2008 registered
only a 10% increase in cement consumption due to a harsh winter and the
early manifestations of the crisis that shook the Romanian construction
sector in 2009 and after.
Cement consumption (in volume) dropped by a third in two crisis years (a
steep decrease in 2009 and a slighter one in the next year), but a turning
point came in year 2011 and the growth, although minor, is envisaged to
continue in 2012, too.
7 active
clinker
producing
cement
plants
Construction in Romania
2011
Nowadays, seven out of the total of nine cement factories in Romania are
producing clinker the basic material for cement production. A decade
ago, the supply was exceeding the demand thus the production capacities
were perceived as being oversized, but lately, the gap has been
diminishing. 2007 was the first year when demand exceeded supply from
local production, and the first notable clinker imports were made (0.5
million tons). As a direct result, the competitors had to reconsider their
investment plans for capacities enlargement, but expansion plans were
again revised after the crisis struck.
Evolution of the
Romanian
2002 2003 2004 2005 2006
cement market
(million tons)
Local cement
production, of
5.68 5.99 6.24 7.04 8.24
which:
Lafarge
2.29 2.56 2.40 2.72 2.92
CarpatCement* 1.84 1.78 2.06 2.37 3.11
Holcim
1.55 1.64 1.77 1.95 2.21
Imported cement
0.02 0.13 0.22 0.17 0.11
Exported cement
1.00 0.93 0.70 0.75 0.45
Cement
consumption in
4.70 5.18 5.76 6.45 7.90
Romania
Dynamic of the
4% 10% 11% 12% 22%
cement market (%)
Cement
216
238
266
298
366
www.marketscope.ro
200
7
2008
10.0
0
10.5
0
3.80
3.30
2.90
0.15
0.15
3.90
3.30
3.30
0.50
0.15
10.0
0
10.9
5
27%
10%
464
516
18
consumption per
capita (kg)
*CarpatCement is the name of the Romanian subsidiary of Heidelberg Cement
Source: National Institute of Statistics, CIROM, CEMBUREAU, Marketscope estimates
2006- 2007
timeframe
was
spectacular
in terms of
cement
consumption
growth
Cement
production
and
consumption
in crisis and
post-crisis
years
Construction in Romania
2011
www.marketscope.ro
19
Regarding the export of cement, LAFARGE is the only producer that has
made noteworthy exports (perhaps because they operate the only plant
situated near the harbours at the Black Sea, in Medgidia). The descending
trend registered by the exports of cement was caused by the fact that
Lafarge gradually redirected its production almost entirely towards the
internal market, exporting less than 10% of the volumes produced in 20072008, while a few years ago they were exporting almost a third of the
volumes. During crisis, exports became inconsequential (as mentioned
above, production and consumption can virtually be considered equal at
present).
Market
players
The companies that are present on the Romanian cement market are
subsidiaries of LAFARGE, HEIDELBERG CEMENT and HOLCIM. They have
entered the market in 1997 (LAFARGE and HOLCIM) and 1998
(HEIDELBERG CEMENT), by acquiring (gradually) the existing local cement
producers.
Large
investments
were made in
the
modernisatio
n of the
existing
cement
plants, but
no greenfield
investment
was
completed up
to now
Key
producers
have fairly
close results
in terms of
turnover and
production
Construction in Romania
2011
www.marketscope.ro
20
Public financials show that HOLCIM has been less profitable than their
competitors in the analyzed period. All in all, although profits still look
attractive (at least for two out three competitors), the cement producers
not only have lost a third of their revenues due to crisis, but their profit
margins have declined significantly further to the crisis.
Only one
noticeable
specialized
importer
Product
range
Usage
Construction in Romania
2011
www.marketscope.ro
21
Pricing
Average ex-works prices for cement in 2008 ranged between 70-80 EUR
per ton, up 10-15% vs. previous year. On medium term, ex-works prices
were expected to grow by 12% per year in a moderate scenario, but it
appears that in year 2009 the effects of the crisis prevented producers to
operate noticeable changes. Although production costs have been growing
since 2009, cement price registered consecutive decreases (by 5% in both
2009 and 2010), with only a minor increase in year 2011.
Both the concrete and the aggregates markets are fragmented, with
numerous small players and only few important ones. As in many nonmature markets, several problems occur, like black / grey market
practices, sub-standard products, illegal raw materials exploitations, or
environmental issues; however, measures have been taken to improve
the situation, at both authority and private level.
An important development that led to the growth of concrete business
(and implicitly, to the growth of aggregates consumption) was a change
in users preferences, namely that more and more final users having
their concrete delivered as ready-mix product by specialised concrete
stations instead of obtaining it on site, with the help of their own more
or less modern installations.
Market size
Construction in Romania
2011
www.marketscope.ro
22
Illicit
volumes not
included in
market
estimation
practices are still very common (up to about 30% of the market
according to industry experts) and, furthermore, there are also
important volumes of ready-mix concrete obtained by the final users on
site (very difficult to track / quantify / estimate). Therefore, the volumes
mentioned above refer only to product obtained in specialised concrete
stations and sold as such to users.
Market players estimate the aggregates market at 70 - 90 million tons in
2008, while for 2011, numbers range from 50 to 70 million tons of sold
aggregates. However, one should bear in mind the limitations in
estimating this markets volume, as on the aggregates market illegal
practices are widespread (the most common practice is overloading
transports well beyond the limit admitted by law for road transports,
since transport costs can represent as much as 50% of total costs for
companies active in the aggregates supply business).
Market
players
The concrete market and the aggregates market are very fragmented:
200 - 300 companies are active on the concrete market and around 500
- 700 on the aggregates market. Most of these companies are small;
only few distinguish themselves through size and geographical coverage
(the large players are the local subsidiaries of international
competitors).
Furthermore, some large construction companies have their own
concrete stations that provide for their needs; they are not players on
the market of concrete deliveries (they usually do not sell produced
concrete), although they produce important volumes of concrete.
There are two associations that represent these markets: APBR (the
Association of Concrete Producers) and APPA (the Association of
Aggregates Producers). They include some of the most important
players on the market and have an active role in sectors regularisation.
Fragmented
markets,
overlaps
between
players
active on
each market
Products &
Pricing
Construction in Romania
2011
The most notable action taken in order to assure a minimum quality for
the products offered on the market was the implementation in July 2008
of the Code of best practices in concrete production. The code was a
joint project between MDLPL (the Ministry for Development and
Housing), CIROM (the Association of Cement Producers), ARACO (the
Professional Association of Construction Companies) and APBR (the
Association of Concrete Producers) with the purpose of ensuring
minimum safety standards for new construction in Romania.
www.marketscope.ro
23
Heterogeneo
us price
range
Construction in Romania
2011
www.marketscope.ro
24
The main categories of wall building materials used in Romania are AAC
and clay/ceramic bricks, which account together for almost 80% of the
wall building materials market. A peculiarity of the Romanian market is
that, in addition to the two major product categories mentioned above
and other usual types of wall building materials (e.g. timber, concrete
blocks, prefabricated panels, etc.), there are two wall building materials
that are produced and used by handicraft, namely trellis works and
adobe (used primarily in poor rural areas). Although their role should not
be neglected, the relative importance of these materials is low and will
most likely continue to diminish.
Wall building materials - Romanian
2012 (thou m)
Year 2002 2004 2006 2008
AAC
1,350 1,850 2,600 3,200
Brick
s
950 1,350 2,050 2,850
Other 1,450 1,550 1,750 1,950
TOTA
L
3,750 4,750 6,400 8,000
1,800
1,200
1,750
1,150
1,750
1,150
AAC and
bricks
dominate the
market
The figures below show that AAC and bricks are the dominant wall
building materials in Romania by volume (m), with a share of
approximately 39-40% and 36-37% in the 2011 2012 timeframe,
respectively.
% Structure of
WBM market in
2012 (m)
AAC 40%
Bricks 36%
Other
24%
Bricks registered stronger y-o-y growth rates between years 2002 and
2008 as compared to AAC and managed to reduce the gap on AAC.
However, AAC is still the wall building solution of choice for larger
structures (especially in urban areas).
Regarding materials used in construction of homes, consumers seem to
prefer bricks, though in recent years, a part of this segment of
consumers seems to have focused on AAC.
Timber holds around 8-9% of the market and its popularity is slightly
growing (especially in rural areas with low flood risk and / or high
earthquake risk, and for summer / vacation houses) as it is cheaper than
both bricks and AAC. Furthermore, a DIY / small industry material
apparently holds a noticeable share of the market (5-6% at present) this material is called light aerated concrete (LAC) and is competing
directly with AAC (however, the AAC consumption is 6-7 times higher).
The market decreased by more than 30% in volume in 2009 compared
Construction in Romania
2011
www.marketscope.ro
25
Effects of the
financial
crisis are still
visible
with the previous year, with the bricks segment more affected than the
AAC one. In value, the market decrease was even more pronounced,
consumers focusing more on price rather than quality, which forced
producers to lower their prices in an effort to maintain their market
share. Players estimate that market value for wall building materials at
producer level in year 2011 was less than 40% of the market value in
year 2008 (reaching about 100 - 110 million EUR for AAC and about 60 70 million EUR for bricks in year 2011). Moreover, the players
difficulties in dealing with a market in recession were amplified by the
financial / cash-flow problems of their distributors.
Areas such as the North-Eastern part of Romania, where most sales go
to individual projects, were less affected by the crisis, at least in the first
months of 2009. Other regions, such as the western part of Romania,
where large building projects take a higher percentage in sales,
registered major drops in sales since the beginning of the same year.
The market continued to decrease in the 2009 - 2011 period and several
players exited the market. Optimistic scenarios place the market in year
2012 at the same volume as the one in the previous year, even though
sold quantity of wall building materials in the first semester of the year
was less than sales during the same time frame of the previous year,
due to unfavourable weather conditions (the decrease was more
pronounced for the AAC segment).
Some players state that market volume in year 2012 will most likely
continue to decrease, but a refocus on quality of products and increase
of prices may lead to a stagnation regarding the value of market. Main
obstacles in the revitalization of the market, as stated by producers, are
unfriendly loan policies and national politics regarding taxes and
incomes (which make the local market unattractive for investors in
construction). The following period is considered to be that of
stabilization by most players, increases in market volume being
envisioned for years 2013 - 2014.
Imports of
bricks and
AAC have
decreased
Construction in Romania
2011
www.marketscope.ro
26
Competitor
landscape
There are around 25 brick plants and 12 AAC plants currently active in
Romania market is dominated by the 8 AAC producers (controlling 10
plants) and 5 major brick producers (other 10 brick producers are also
worth mentioning in terms of volumes), thus one can notice the sector is
rather concentrated. Only few competitors produce both AAC and
bricks. As regards other wall building materials, the market is more
fragmented. A trend during the 2009 - 2011 period, was for smaller
producers to exit the market or to be taken over by larger groups.
Market
dominated by
around 15
major wall
building
materials
producers
The chart below outlines the top 12 players in the market, based on
total turnover. Except for the international brick producer
WIENERBERGER, the other companies that are specialised in brick
production are situated towards the bottom of the top (CERAMICA Iasi,
SICERAM, CEMACON). SOCERAM is the only producer of both AAC and
bricks present in the top. All players in the top have additional product
segments (usually, AAC companies also produce prefabricated concrete
products, while bricks producers also make ceramic tiles), but AAC /
bricks represent their main product (considering share in company
sales).
Financial results for the top 12 players on the wall
building materials market (million EUR)
28.0
27.9
Wienerberger
25.7
24.4
Macon-Simcor
20.5
20.5
Celco
No major
changes in
turnover in
2011 vs.
2010
16.4
Somaco
20.4
19.9
20.2
Elpreco
Soceram
16.7
Ceramica Iasi
15.4
16.2
Prefab
17.0
15.3
20.0
Turnover 2010
Turnover 2011
13.0
13.3
Siceram
13.1
11.4
Prefabricate Vest
7.5
7.3
Xella
5.3
6.5
Cemacon
0
10
15
20
25
30
Construction in Romania
2011
www.marketscope.ro
27
Bricks and AAC markets are dominated by local players there are only
two multinationals that established a strong foothold in Romania,
namely WIENERBERGER (currently holding 3 brick plants and also
operating imports, mainly from Hungary) and XELLA (started as a sales
office operating imports and began operations at a local production
facility in year 2010).
Due to the high returns obtained by companies active in wall building
production in Romania in years 2008-2009, several international players
and investment funds have taken interest in local players and/or
investments on the market. For example, some of the local players have
been bought by investment funds. The most active funds present in
Romanian construction sector are ENTERPRISE INVESTORS, ORESA
VENTURES and ADVENT INTERNATIONAL, each having made more than
one acquisition of a building materials producer. Their strategy
supposed a profitable exit in 4-5 years or keeping their stakes for 10-15
years if the market grows significantly post-crisis.
In years 2010 - 2011 however, turnovers for most main producers
decreased significantly (reaching values 2 4 times lower than
turnovers in years 2008 - 2009).
Marketoriented
companies
have already
invested in
branding
There is little possibility for product differentiation on the AAC and bricks
market, thus brands can be a powerful tool, especially during crisis,
since now the market no longer absorbs all produced assortments as in
the recent past.
Besides international players WIENERBERGER and XELLA, which have
solid brand policies, one can notice the efforts of some local businesses
in this respect: either companies bought by international funds (that
come with their own vision on product marketing, implementing their
know-how in this area) or players with Romanian shareholding
(companies that have realised the importance of a strong brand in
market competition).
AAC producer
Xella
Macon-Simcor
Prefabricate
Vest
Somaco Grup
Prefabricate
Ytong
Wabe
Bricks
producer
Wienerberger
Siceram
Porotherm
Termobloc
Verblok
Soceram
Durotherm
Somaco
Ceramica Iasi
Brikston
Brand
Brand
A AC
Construction in Romania
2011
www.marketscope.ro
28
AAC market
size
Prior to year 2009, the local AAC market has had a very dynamic
evolution, with y-o-y growth greater than 10% each year (exception
being year 2008, with only a 7% increase). The market deceleration in
year 2008 was also influenced by the physical limitations of production
capacities, which have virtually worked at full capacity since 2007. In
value terms, the market was estimated in 2008 at around 240 million
EUR, growing by 15% from 2007.
In 2009, local AAC production dropped by 30% (to around 2 million m)
and the whole market (including imports) decreased by at least 30 35%. Market players estimate that average prices decreased by 16-18%
in 2009 as compared to the previous year. Estimates of consumed AAC
in Romania in year 2011 range from 1.9 million m to 2.3 million m,
however, most reliable estimates place the market volume at around 2
million m. 2011 was the third consecutive year to register a negative
evolution of AAC market volume.
Expectations of stagnation for year 2012 are considered the most
optimistic, as volumes of AAC sold during the first semester of the year
were lower than those in the similar period of the previous year. The
AAC market is however, expected to return to growth for at least 3-4
years after recession period is over (assumed for year 2013), before
stabilizing, thus boosting the set up of another two or three production
plants. Besides new investments, there is still a need for modernisation
or even replacement of some of the current production lines, as they are
relatively inefficient and use outdated technology (few producers have
invested in entirely new production lines, most of them have limited
themselves to upgrading existing facilities, which have been
constructed in the communist period).
Construction in Romania
2011
www.marketscope.ro
29
AAC
consumption
more than
doubled in
the 20002008
timeframe
Major players
The top 8
producers
active on the
market
account for
more than
90% of the
volumes sold
Some of the most important players on the market are members of the
Pro BCA association (the AAC Producers Association), accounting for
about 70% of the AAC market. The association was established in
September 2008 and is made up of CELCO, MACON, SOCERAM, XELLA,
SOMACO GRUP PREFABRICATE, ELPRECO, ALBA ALUMINIU and ECO
BLOCK, with discussions of also including the company PREFABRICATE
VEST (PREFAB is the only large competitor not member of the
aforementioned association).
The table below outlines the top 8 players on the AAC market, based on
turnover, production capacity and perceived level of AAC sales volume.
Turnover in
2011 (million
EUR)
MACON-SIMCOR
PREFAB
CELCO
XELLA
SOCERAM
ELPRECO
PREFABRICATE VEST
SOMACO GRUP PREFABRICATE
24.4
15.3
20.5
7.3
16.7
20.2
11.4
20.4
AAC
production
capacity (thou
m)
715 (2 units)
420 (1 unit)
400 (1 unit)
400 (1 unit)
360 (2 units)
340 (1 unit)
330 (1 unit)
250 (1 unit)
Brief profiles of most relevant market players in the AAC segment are
outlined below.
MACON SIMCOR
www.macon.ro
Construction in Romania
2011
Key issues
www.marketscope.ro
30
market;
MACON SIMCOR
www.macon.ro
Investments
Capacity
PREFAB
www.prefab.ro
Key issues
Romanian capital building materials producer; besides
AAC, it also produces prefabricated concrete products, aggregates
and PVC window systems;
Investments
Capacity
CELCO
www.celco.ro
Key issues
Romanian capital company that produces AAC and dry
mortars at its Constanta plant, and lime at Corbu (Constanta
county);
Investments
Capacity
Construction in Romania
2011
www.marketscope.ro
31
www.ytong.ro
Key issues
XELLA
www.ytong.ro
Investments
Capacity
local production capacity is 400,000 m3 per year for
AAC;
SOCERAM
www.soceram.ro
Key issues
the company (controlled by METALEUROEST and ELSID
TITU Romanian shareholding) produces both AAC and bricks, dry
mortars, adhesives and metal profiles;
Investments
20 million EUR investment in new brick production line
completed at Doicesti;
Capacity
Construction in Romania
2011
www.marketscope.ro
32
ELPRECO
www.elpreco.ro
Key issues
the company was bought in early 2008 by the Irish
construction materials group CRH; the value of the transaction
estimated at around 70 million EUR;
Investments
Capacity
AAC production capacity of 340,000 m3 (within Craiova
plant);
PREFABRICAT
E VEST
www.pv.ro
Key issues
the company is located in Bucharest and produces
AAC, pavers and other small-dimension prefabricated concrete
products;
Investments
Capacity
SOMACO
GRUP
PREFABRICAT
E
www.somaco.ro
Key issues
ORESA VENTURES, a Swedish investment fund, bought
in 2008 three production units (Buzau, Roman and Adjud) and the
Somaco brand from SOMACO (the former Somaco eventually
was renamed SMC PREFABRICATE PENTRU CONSTRUCTII) for 32.5
million EUR, re-establishing the company as SOMACO GRUP
PREFABRICATE;
Investments
Capacity
Construction in Romania
2011
www.marketscope.ro
33
Bricks
Bricks market
size
Bricks consumption registered an increased y-o-y growth in the 2002 2008 period (over 10% in all years and over 20% in years 2004, 2006
and 2007). Bricks consumption in Romania reached almost 2.9 million
m in 2008, increasing by 12% in volume as compared to the previous
year, despite a slide in Q4 2008. In value terms, the main competitors
on the market estimated it at around 230 - 250 million EUR in the
respective year.
After a sharp decrease in 2009 (over 30% in volume), consumption
continued to drop, but in a lower and more stable pace. For year 2012,
optimistic scenarios estimate the market volume at the same level as
the one in the previous year.
After the economic recession period ends, the construction sector is
expected to grow by two-digit values again, thus justifying the intent of
local producers to continue their investments in capacity
enhancements.
More
dynamic
historical
growth for
the bricks
market as
compared to
AAC
Construction in Romania
2011
www.marketscope.ro
34
Market
players
Top 5 players
hold over
60% of bricks
sales
volumes
(WIENERBER
GER also sells
bricks
imported
from own
plants in
neighbouring
countries)
WIENERBERG
ER
www.wienerberger.
ro
Out of the main 15 main brick plants, seven have capacities over
100,000 m; three of them are controlled by the single major
international player active on the market, namely WIENERBERGER,
which seems to be the leader in the segment. The table below outlines
the top 5 players on the bricks market, based on turnover, production
capacity and perceived level of brick sales volume.
Top 5 Brick players
Turnover in
2011 (million
EUR)
WIENERBERGER
27.9
CERAMICA IASI
16.2
CEMACON
SOCERAM
SICERAM
6.5
16.7
13.3
Bricks
production
capacity (thou
m)
660 (3 units)
370-420 (1
unit)
350 (1 unit)
350 (2 units)
250 (1 unit)
The profiles of key market players in the bricks segment are outlined
below.
Key issues
the local subsidiary of the Austrian-based leading
player on the international market of wall building materials; the
company produces ceramic bricks, facing bricks and pavers;
Investments
the groups medium term plans for Romania, before the
crisis, included investments of 100 million EUR in acquisitions,
greenfield projects, etc., but due to difficult market conditions
most investments have been put on hold;
Capacity
CERAMICA
IASI
www.ceramica-
Construction in Romania
2011
Key issues
www.marketscope.ro
35
iasi.ro
www.brikston.ro
Investments
46 million EUR investments in capacity enhancement
on the Iasi plant platform and the construction of a new
production plant (initially due in 2010), resulting in a total
production capacity of 460,000 m3;
Capacity
current production capacity is over 350,000 m3 per
year;
CEMACON
www.cemaconzalau
.ro
Key issues
the Romanian bricks producer underwent a complex
restructuring and investment process, with closing old production
line at Zalau and keeping the new production facilities at Recea
(Baia Mare County, functioning since 2010);
Investments
Capacity
SICERAM
www.siceram.ro
Key issues
Romanian capital company that produces ceramic
bricks and roof tiles
Investments
Capacity
Construction in Romania
2011
www.marketscope.ro
36
pricing
Large
vertically
perforated
bricks
(ceramic
blocks) have
become the
main brick
format
Concentratio
n of wall
building
materials
sales
Pricing
AAC and bricks are substitutable products, each with pros and cons.
Until recently, price was one of the main reasons for choosing AAC, as
bricks were, on average, 20% more expensive. Presently, prices have
relatively reached the same level.
Distributor prices per m3 were situated, in 2008, around an average of
75-95 EUR for AAC and 80-100 EUR for bricks, higher by 10% than
prices registered in 2007. However, towards the end of 2008, the
reduced demand and rough conditions in the market determined
producers to lower their prices with as much as 25%. The calculation of
average prices in 2009 were influenced by discounts and the opinion of
most players is that the difficult period determined lower prices than in
previous year, even by 10-15% (due to accumulated stock).
The prices decline in the 2009-2011 period, mixed with fall of sold
volume caused a significant contraction of the local wall building
materials market.
In year 2010, average prices per m3 were around 65-70 EUR for both
bricks and AAC. Prices continued to decrease in year 2011, players
complaining that consumers seemed to put price over quality. Scenarios
Construction in Romania
2011
www.marketscope.ro
37
for year 2012 indicate that prices for both bricks and AAC will remain at
similar levels or will increase with about 5-10% due to growing costs of
raw materials and fuel. Also, with increase of purchasing power, local
producers expect consumers to focus on higher quality products.
Construction in Romania
2011
www.marketscope.ro
38
Steel
Iron and steel
foreign trade
and local
production
Romania
remains a net
exporter of
raw steel
Source: EUROSTAT
Construction in Romania
2011
www.marketscope.ro
39
Raw steel
consumption
estimation
and forecast
Pricing
Export prices for steel went from 500 EUR per ton in peak year 2008 to
around 350
EUR per ton in the following year and reached again the 500 EUR mark
in year 2011. On the other hand, average prices in the local market
seem to have witnessed several ups and downs in the analyzed period,
which even lead to a new decrease by the end of year 2011.
Key
competitors
ARCELOR
MITTAL is the
subsidiary of
the leading
international
group that
took over the
former SIDEX
factory
Russian
group
operates 5
factories in
Romania
ARCELOR MITTAL
MECHEL
Construction in Romania
2011
www.marketscope.ro
40
Market size
and
segmentation
The market for roofing solutions registered rapid growth rates during
pre-crisis years due to the real estate boom and to the increase in
number of local players or importers of roofing solutions: major
expansion in the 2005-2007 period (over 30% y-o-y growth) and
approximately 15% increase in year 2008.
The roofing market declined by an approximately 34% in year 2009 (by
volume), being hindered especially by the general economic conditions
on the Romanian market that affected the consumers purchasing
power: financial insecurity, credit blockage etc. Year 2010 was marked
by only a slight decline of the market.
In year 2011, the roofing solutions business registered a slight increase
(about 10%), reaching approximately 125 million EUR in value and 25
million m2 in volume, with the metallic tiles segment dominating both by
value and by volume. Players predict another decline in year 2012 (of 510%), in part due to political instability (according to recent statements
of players in the market).
A large part of demand seems to be represented by renovation projects,
lack of new projects affecting the sector. However, there seems to be a
growing number of recently started construction projects for industrial
and agro-industrial sectors (production halls, warehouses, farms etc.).
The northern half of the country and Bucharest seem to hold the
concentrations of demand in this sector.
Regarding seasonality, autumn season seems to be the most dynamic
period for the roofing solutions market.
Construction in Romania
2011
www.marketscope.ro
41
Metallic tiles
hold the
highest share
in roof sales
Metallic tiles
Construction in Romania
2011
www.marketscope.ro
42
demand.
The rapid increase in the number of players is due to the fact that
entering the metallic tiles segment is relatively easy: the investment in
equipment needed for a small metal profiles production unit is of only
25 - 30,000 EUR (equipment imported from China), and only medium
sized investments require 400,000 to 1 million EUR. However, small
companies with no financial strength to withstand a contracting market
were forced to close down their business (temporarily or even
permanently) during the financial crisis period.
Concrete
tiles
Roof ceramic
tiles
Bituminous
shingles and
corrugated
roofing
19.5
29.7
27.8
26.5
Megaprofil
21.2
20.0
Lindab
11.6
8.1
9.9
10.2
7.7
5.7
7.6
6.8
7.2
7.2
Vikingprofil
Bramac
Coilprofil
Tondach
ArcelorMittal Construction
0
10
15
Turnover 2011
Turnover 2010
20
25
30
35
Construction in Romania
2011
www.marketscope.ro
43
The most important players on the overall roofing market are presented
below.
RUUKKI
www.ruukki.ro
RUUKKI
www.ruukki.ro
MEGAPROFIL
LINDAB
www.megaprofil.r
o
www.lindab.ro
www.astron.ro
Construction in Romania
2011
The company is part of the Belgian group JORIS IDE and has
three production plants (with 14 production lines) at Buzias (Timis
county), Bucov (Prahova county) and Iasi;
www.marketscope.ro
44
www.vkp.ro
BRAMAC
COILPROFIL
TONDACH
ARCELOR
www.bramac.ro
www.coilprofil.ro
www.tondach.ro
Construction in Romania
2011
The companys offer includes metal profiles for roof and wall
cladding, thermo-insulating panels (with mineral wool or polystyrene
insulation), structural and faade casings, galvanised profiles,
metallic tiles and accessories, water drainage systems;
The Austrian company entered the Romanian market in 2003
through the acquisition of a ceramic tiles production facility in Sibiu;
www.marketscope.ro
45
MITTAL
CONSTRUCTI
ON (AMC)
www.armat.ro
www.arvalconstruction.ro
www.arclad.ro
TEGOLA
Other players
www.tegola.ro
Structural elements
Market
Construction in Romania
2011
www.marketscope.ro
46
overview
The economic crisis affected the sector more than anticipated: the
construction of new commercial premises declined (also partly due to
saturation for this type of facilities in some areas), but the effects of the
crisis (risk of non-payment, difficulty in financing) affected even the
construction of logistic centres, the only segment which was expected
to continue to grow in 2009.
During years 2009 and 2010, the construction sector seems to have
focused on infrastructure works. Year 2011 was marked by a slight
decline, while 2012 is expected to be a year of stabilization or recovery
on the market. However, in spite of the overall market decline, it seems
some large players reported increase in business in 2011 due to growth
in demand for new construction in the industrial and agriculture sectors,
investments in enlargements of production facilities, absorption of the
market share from smaller players exiting the market and exports.
However, the demand for these products will continue to grow once
economy exits crisis as there still is shortage in logistic and commercial
centres and a need for modern industrial facilities in Romania.
Prefabricated
concrete
building
components
Construction in Romania
2011
www.marketscope.ro
47
post-crisis years.
Metallic
building
components
and other
Brief profiles
of key market
players
ASA CONS
www.asacons.ro
Note. This section will only include market players whose profiles were
not presented in other sections of the report.
ERGON
CONCRETE
INTERNATION
AL
www.ergoninternational.com
/ro
PLASTSISTEM
www.plastsistem.
Construction in Romania
2011
www.marketscope.ro
48
ro
Thermo-insulating panels
Overview
Construction in Romania
2011
www.marketscope.ro
49
Building adhesives
Tilling adhesives, polystyrene adhesives and assembly adhesives 1
Overview
Tiling
adhesives
has
developed
into a mature
market
Still high
potential in
the
polystyrene
adhesives
market
Market size &
growth
600
400
350
620
430
430
380
350
330
2010
2011
2012*
200
0
2005
2006
2007
2008
2009
Tilling
adhesives
consumption
down 30% in
year 2009
Tilling adhesives market volume increased significantly in years 20052008, reaching an estimated 620,000 tons in 2008. However, following
the evolution of the ceramic tiles market, the tiling adhesives market
dropped by approximately 30% in year 2009 and around 10% in
subsequent years, reaching an estimated 350,000 tons in 2011.
Grouts market volume varies in line with the ceramic tilling market and
is estimated at around 4-5% of the tilling adhesives market in volume
terms.
This section refers to cement-based tilling adhesives, grouts and polystyrene adhesives packaged in sacks and to
assembly adhesives packaged in cartridges (300 ml - most common cartridge, but also 600 ml and bigger
packaging etc.).Usage of PU /acrylic adhesives for laying ceramic tiles and expanded polystyrene boards is
inconsequential and thus not covered in this report
Construction in Romania
2011
www.marketscope.ro
50
Polystyrene
adhesives
consumption
maintained
similar levels
in crisis years
330
200
220
110
(thou tonnes)
240
230
230
240
250
2010
2011
2012
130
70
0
2005
2006
2007
2008
2009
Assembly
adhesive is a
product with
limited
awareness
among
construction
workers, thus
the volumes
are still low
3,7
2,8
3
1,3
2,8
2,5
2,4
2,4
2010
2011
2012*
1,8
0
2005
2006
2007
2008
2009
The assembly adhesives market growth rate turned into a negative pace
in the 2009-2011 period, given the general construction sector context.
The market is estimated to have reached a 2.4 million EUR value in
2011.
Market
structure
Assembly
adhesives
market
dominated by
imports
Assembly adhesives
0%
Local production
Construction in Romania
2011
50%
100%
Imports
www.marketscope.ro
51
Standard
tilling
adhesives
hold the
greatest part
of the market
Competitor
landscape
Tilling and
polystyrene
adhesives
markets are
competitive,
with 10
players
accounting
for most of
the sales
Henkel*
33.6
30.3
Adeplast
29.3
29
Baumit
Weber* *
16.9
22.1
18
13.8
Duraziv
9.4
8.6
Mapei
6.5
7.2
Baumix
Ital-Kol
3.6
5.1
Gabbro
3.6
4.2
MGA
1.9
4.6
10
20
Turnover 2010
Construction in Romania
2011
30
40
50
60
70
Turnover 2011
www.marketscope.ro
52
*HENKELs turnover and profit figures represent half of the total official financial data for
all of Henkels operations in Romania, which also include FMCG products like detergents,
cosmetics etc. **WEBERs turnover and profit figures represent 35% of the official
financial data for all SAINT-GOBAINs operations in Romania, which also include glass,
plasters, insulating materials etc.
37,2
24,8
24,1
Temad
According Group
More
concentrated
competitor
landscape in
the assembly
adhesives
market
Selena
3,9
8,7
8,4
8,5
1,4
1,3
Soudal
0
Turnover 2010
44
10
20
30
40
50
Turnover 2011
*Henkels financial results presented in a previous chart also include sales of assembly
adhesives
HENKEL
www.ceresit.ro
www.ceresit.com
Construction in Romania
2011
www.marketscope.ro
53
ADEPLAST
www.adeplast.ro
BAUMIT
www.baumit.com
Market
drivers
Construction in Romania
2011
www.marketscope.ro
54
Construction in Romania
2011
www.marketscope.ro
55
70% of
market value
currently
generated by
rehabilitation
works
Construction in Romania
2011
Estimated market size of 100 EUR in year 2011 (up to 150 million,
according to more optimistic market participants)
Polyvinyl chloride (PVC) profiles account for approximately 70% of
the market
Concentration: 4-5 players hold over 50% of the market
www.marketscope.ro
56
275 million
EUR in year
2008
Year 2012
could bring
stagnation
Source: Previous research, desk research update, Marketscope estimates
Profiles market size in value terms reached around 190 million EUR in
2006 and increased rapidly to approximately 250 million EUR in 2007. In
2009, the market is estimated to have declined by approximately 50%.
Carpentry profiles sales in 2012 are estimated at fairly similar levels as
the previous year (90 - 100 million EUR).
Construction in Romania
2011
www.marketscope.ro
57
Market
structure
PVC accounts
for 70% of
the profiles
market
Increased
usage of
grade A
PVC profiles
Construction in Romania
2011
www.marketscope.ro
58
Competitor
landscape
Note:
(Imp) stands for importer while (Prod) stands for producer
companies in green frame represent aluminium profiles importers/producers;
*financial data for entire group / company (only a part of turnover represents sales of PVC
profiles and PVC carpentry).
GEALAN
www.gealan.ro
With the exception of ALUMIL, all other companies presented below sell PVC profiles
Construction in Romania
2011
www.marketscope.ro
59
buildings
Construction in Romania
2011
www.marketscope.ro
60
REHAU
www.rehau.ro
TERAPLAST
www.teraplast.ro
ALUMIL
www.alumil.ro
PROFINE
www.trocal.ro
Construction in Romania
2011
www.marketscope.ro
61
Market
volume: 120 170 thousand
tons in year
2012
Market
structure
Low-e glass
had a more
dynamic
growth than
clear float
glass
Market breakdown by type of float glass reveals that clear float glass
accounts for over half of the total market. This type of float glass has
continually diminished its market share in favour of low-emissive glass
or other types such as body-tinted, solar control or other kinds of
special coatings (float glass with special coatings are expected to reach
50% of the local market in 2015). This is mainly due to the fact that an
increasing number of insulated glazing producers no longer
manufacture insulated glazing made up of just clear float glass.
The bulk of float glass imports usually originate from Central and
Eastern Europe (the factories of global producers located in Hungary
and Poland) and China.
Imports diminished their share at just over half of the total market
Construction in Romania
2011
www.marketscope.ro
62
volume in year 2008 (as compared to around 80% in years 2005 - 2006)
once SAINT-GOBAIN GLASS (one of the global producers of float glass),
previously an exporter to Romania, opened a production facility in
Romania at the end of year 2006.
Apparently, float glass producers from China supply the Romanian
market whenever there is over-demand and European producers cannot
supply the extra volumes in the market. Even with all import costs
incurred, float glass produced in China is still cheaper than European
glass; however, it is regarded as of inferior quality.
Specialized
glass is
expected to
increase
importance
Construction in Romania
2011
www.marketscope.ro
63
66
Legend:
One major
local
producer,
with the
other global
brands
present via
importers
SAINT
GOBAIN
www.saint-gobainglass.com/ro
Construction in Romania
2011
www.marketscope.ro
64
GUARDIAN
www.guardian.com
Construction in Romania
2011
www.marketscope.ro
65
Fragmented
market
Fittings
General
information
Competitor
landscape
Construction in Romania
2011
Turnove
r year
2011
(mil
EUR)
GU FERROM
8.7
ROTO ROMANIA
8.6
SCHACHERMAY
ER
Brief profile
Apparently, market leader on the
fittings market
Warehouse situated in Bucharest;
nearest production site is in Hungary
Distributor of major European
manufacturers; 70% of fittings sales
www.marketscope.ro
66
SCHURING ROM
Construction in Romania
2011
0.7
www.marketscope.ro
67
PU foams
Overview
Competitor
landscape
Turnove
r
year
Company
2011
(mil
EUR)
DEN
BRAVEN
44
128
HENKEL
(all
operations
in
Romania)
SELENA
8.5
TEMAD
24.8
PENOSIL
0.9
Brief profile
Construction in Romania
2011
www.marketscope.ro
68
Construction in Romania
2011
www.marketscope.ro
69
Insulating materials
EPS, bituminous membranes and other thermal- & hydro-insulating materials
Market
overview
Potential on
the
renovation
segment
The market has registered large growth rates in the pre-crisis years and
continues to have high potential due to the regulations adopted at EU
level that requires buildings to have a thermal insulation certificate. This
document attests the thermal efficiency of a building and will be needed
when selling a dwelling. It is only natural that dwellings with higher
thermal efficiency will be preferred. New buildings and residential parks
are designed to be thermal efficient, but there is a great number of old
buildings that need thermal refurbishment (it is estimated that thermal
inefficient construction account for about 60% of the total number of
buildings in Romania).
The national
rehabilitation
program
progresses
slowly
Market size
During the crisis years, the total market for insulating materials was
mostly sustained by renovation projects and remained around the same
levels, with a slight increase from approximately 200 million EUR in
2008 to about 220 million EUR in year 2011. Most players on the market
expect a slight increase in 2012 (3-5%) or stagnation. Still, experts
believe that the market can register up to 15-20% annual growth rates
for at least 5 years after the Romanian economy recovers, making it one
of the most attractive building materials markets.
About 3 - 3.5 million m3 of expanded polystyrene (EPS) were sold in
2011, with a value of around 90 - 100 million EUR (volumes and values
are similar to year 2008), while mineral wool sales reached 50 - 60
million EUR (the share of glass and basaltic types in total sales is
approximately equal). Extruded polystyrene (XPS) reached a market
volume of about 0.35 million m3. Players estimate that the EPS has a
medium term growth potential to reach up to 350 million EUR, while
Construction in Romania
2011
www.marketscope.ro
70
mineral wool has the potential to reach 150 million EUR at maturity
level. It is expected that in the following years, the share of mineral
wool in the thermal insulation market to increase.
The sales of bituminous membranes (for hydro insulation) reached
about 50 million EUR, while fireproof insulating materials reached a
market value of about 20 million EUR in year 2011.
Thermal
insulation
materials
cover
approximatel
y 70% of the
insulation
products
market in
Romania
Source: Previous research, desk research update, Marketscope estimates
Consumption
rate
increased
significantly
in pre-crisis
period
Installed
capacity for
polystyrene
exceeds local
demand
Imports of
bituminous
membranes
still hold 20 35% share
Construction in Romania
2011
If local producers dominate the market for EPS, the situation on the
waterproofing market is quite different. Although local production of
bituminous membranes (preferred waterproofing materials on the
Romanian market) has increased significantly in the past years, imports
still hold an important share in consumption, accounting for about 2035% in volume terms. Imports for premium products (4kg/m2)
originate from Italy, Germany, France, Austria, Czech Republic, Hungary,
Belgium and Portugal, while low-cost products (2kg/m 2) originate from
Russia, Bulgaria, Macedonia, Ukraine and Slovenia. Imports of
bituminous membranes generally tend to cover demand for higher
quality products on the Romanian market.
www.marketscope.ro
71
Economic
crisis helped
the market to
reach
maturity
Major players
Most
analyzed
players have
recorded
turnover
growth in
2011
Isover (Saint-Gobain)
48.3
63.3
33.6
30.3
27
23.7
20.6
16.2
17.1
13.2
Adeplast
Arcon
Zentyss
Austrotherm
Turnover 2011
9
6.5
6.7
7.3
6.5
Knauf Insulation
Swisspor
Rockwool
Turnover 2010
5.8
5.7
5.6
6.6
Isopor
Ursa
0
25
50
75
ARCON
Key issues
produces bituminous membranes and expanded polystyrene at the
plant located in Sfantu Gheorghe (Covasna County);
ARCON is leader on the market for bituminous membranes with
about 30-35% market share (upon their own estimations);
sales of bituminous membranes represent about 55% of turnover;
exports represent about 10% of total sales of bituminous
membranes (company officials report that they plan to increase
exports in the following years);
Investments
invested over 8 million EUR in the first production line for EPS in
Construction in Romania
2011
www.marketscope.ro
72
year 2005
invested 3.5 million EUR in 2007 in a new bituminous membranes
production line and expanded polystyrene capacity;
Capacity
bituminous membranes 20 million m2;
expanded polystyrene 900,000 m3;
ZENTYSS
ZENTYSS
Key issues
the company operates two extruded polystyrene production plants
at Arad and Buzau;
until recently, the company also operated production lines for
expanded polystyrene, but those lines were sold to ADEPLAST in
2012 and will be moved to ADEPLASTs production facilities during
the 2012 - 2013 winter;
entered the Ukrainian market through a joint-venture; 5 million EUR
were invested in an expanded polystyrene production plant that will
cover the Kiev-Odessa and Republic of Moldova markets;
Investments
plans to invest 3 million EUR in the extruded polystyrene line in
2013;
Capacity
expanded polystyrene (recently sold to ADEPLAST) 600,000 m3;
extruded polystyrene 255,000 m3;
adhesives and dry mortars 100,000 tons;
AUSTROTHER
M
Key issues
part of the Austrian group SCHMID INDUSTRIE HOLDING;
operates three plants: two EPS production facilities in Bucuresti and
Horia (Neamt county) and one extruded polystyrene plant, also in
Horia;
Investments
8 million EUR investment in the extruded polystyrene plant in Horia
(Neamt county);
Capacity
expanded polystyrene 700,000 m3;
extruded polystyrene 150,000 m3;
SWISSPOR
Key issues
the local subsidiary of the homonymous Swiss group, SWISSPOR
operates a production plant in Ploiesti since year 1998;
produces thermal insulations (expanded and extruded polystyrene,
polyurethane), hydro insulations (bituminous membranes, mastics
and cardboards) and acoustic insulations (basaltic and glass
mineral wool);
exports a part of production to Republic of Moldova, Bulgaria and
Serbia;
Investments
8 million EUR investment in new production unit at Turda - put on
hold in 2007;
Construction in Romania
2011
www.marketscope.ro
73
Capacity
bituminous membranes 15 million m2;
ISOPOR
Key issues
bought by SWISSPOR for 5.5 million EUR in 2008;
the company produces expanded polystyrene in a production
facility in Cluj;
product range also includes extruded polystyrene, bituminous
membranes and mineral wool;
Investments
8 million EUR investment in a production plant in Bucharest was put
on hold;
Capacity
expanded polystyrene 600,000 m3;
SAINTGOBAIN
ISOVER
Key issues
the four SAINT-GOBAIN divisions ISOVER, RIGIPS, PAM and WEBER
were merged into one company (SAINT-GOBAIN CONSTRUCTION
PRODUCTS ROMANIA) in 2009
ISOVER division produces glass and basaltic mineral wool, extruded
polystyrene and diffusion membranes at their Ploiesti plant;
Capacity
mineral wool 8,000 tons; glass wool 20,000 tons;
ADEPLAST
Key issues
producer of adhesives, paints and expanded polystyrene;
production facilities in Oradea and Ploiesti
in year 2012, the company bought the two production lines for EPS
from ZENTYSS from Buzau and Arad and will be moved during the
2012-2013 winter to ADEPLASTs production facilities in Ploiesti and
Oradea respectively
20% of the companys products are sold through DIY chains, the
rest being sold through distributors and directly to construction
companies;
market share on the EPS segment is estimated at around 8%;
Investments
started operations in the new EPS plant in Ploiesti after a 4 million
EUR investment (plant capacity is 700,000 m3);
plans to invest an additional 2.8 million EUR in expanding the
production capacity at the EPS plant in Ploiesti to 850,000 m 3;
Capacity
expanded polystyrene over 1 million m3;
Other
competitors
Construction in Romania
2011
www.marketscope.ro
74
Product uses
Construction in Romania
2011
www.marketscope.ro
75
The paints and varnishes market was one of the most dynamic in the
construction sector, having registered (up to 2008) two-figure yearly
growth rates. In spite the large number of local producers and importers
(over 200), the market is rather concentrated at top, as more than half of
the size is shared by 6 - 8 major local producers.
Many of the companies active on the paints and varnishes market have a
mixed portfolio, besides products complementary to paints (like enamels,
thinners, etc.) also including plasters and adjacent products (such as
adhesives, mortars, expanded polystyrene - EPS, etc.). The tendency has
been to form a portfolio as wide as possible, to include solutions for both
interior and exterior wall finishing.
Market size
Most large players report different data when estimating the local
market. Difficulties in making precise estimations are due to the large
number of players on the market, some with no retail brands, which only
activate in the B2B sector. Also, production of paints is a secondary
activity for some players and they do not report their activities in this
sector. While some large players estimate the market at around 130 150 million EUR in 2011 (probably including most common paints), the
Association for the Painting Industry in Romania estimates a market
value of about 330 million EUR in the same year (most likely including
adjacent products, too). Still, a general market evolution during the past
years can be outlined clearly.
After impressive over 30% y-o-y increase in years 2004 - 2007, and a
peak in 2008 at around 330 - 350 million EUR, sales plummeted in year
2009 and continued a descending evolution in the following years.
Players predict the overall market to continue its decline in 2012 (and
possibly even in 2013).
The
estimated
market value
in year 2008
was a record
of around
330 million
EUR
400
330
5%
250
300
215
0%
200
-5%
100
-10%
-15%
2008
2010
value
2012*
Overall market data refer to all categories usually included in paints producers portfolios: paints, varnishes,
enamels, primer, thinners, wet decorative plasters (destined for all segments: decorative / walls, automotive,
industrial, etc.)
Construction in Romania
2011
www.marketscope.ro
76
Market
structure
Local
production
exceeds
imports
Wall
decorative
paints
dominate the
market
Based on available information, the most common breakdown of the paints market by type includes the
industrial paints & coatings segment (for metal, wood, ship building industry, automotive, etc.) and the
decorative paints segment (dominated by wall paints)
Construction in Romania
2011
www.marketscope.ro
77
100%
50%
0%
1990s
Industrial
Decorative
2010s
Other trends
regarding
market
structure
Competitor
landscape
There are over 200 tier 1 suppliers on the local paint market, which can
be split within three major categories:
Construction in Romania
2011
www.marketscope.ro
78
companies);
The landscape is completed by other small local producers. Thus, based
on the size and number of players, one can notice the market is
concentrated at top (5-6 large producers holding two thirds of market
value) and fragmented at bottom (around 10 medium-size players and a
myriad of other small producers & importers).
The top competitors in the Romanian paints & varnishes market are
outlined in the chart below, along with brief financials.
Most companies operating large plants are local businesses developed
after the 1989 revolution (only POLICOLOR is a traditional industrial
company in the paints industry). International giants in the industry have
not yet set up local plants, despite showing interest. Other foreign
investors drawn to the paint market are investment funds that entered
the ownership of some key players (e.g. ORESA VENTURES at FABRYO,
ADVENT at DEUTEK, while POLICOLOR is held almost entirely by three
funds).
Financial results for the top 5 players on the
paints market (million EUR)
39.1
34.8
Kober
Total
turnover of
top 5 players
in 2011 is
around 140
million EUR
29.8
32.4
Fabryo Corporation
Turnover 2011
29.3
29.0
Policolor
27
Deutek
Turnover 2010
31.0
16.9
17.5
Atlas Corporation
0
10
20
30
40
50
Brief profiles of the major players active on the market are outlined
below:
Key issues
KOBER
www.kober.ro
Construction in Romania
2011
www.marketscope.ro
79
Key brands
Zertifikat, Pitura, Acrilux, Aqualux, Neocar, Duracril
FABRYO
www.fabryo.com
Key issues
Key brands
Savana (premium), Innenweiss and Rost (mainstream)
POLICOLOR
www.policolor.ro
Key issues
Key brands
Spor, Iris Creative Effect, Deko Professional, Klar,
Duralchid
DEUTEK
www.deutek.ro
Construction in Romania
2011
Key issues
www.marketscope.ro
80
Key brands
ATLAS
CORPORATIO
N
Key issues
www.apla.ro
Key brands
Construction in Romania
2011
www.marketscope.ro
81
Pricing
Prices of raw materials hold about 90% of production costs and represent
about 50% of the paint prices at consumer level. The constant increase in
price of raw materials (over 35% in 2011 compared to 2008 and about
10-15% in year 2012 vs. 2011) has led to significant increase in prices on
the decorative paints market.
In 2011, prices for paints at consumer level have raised by approximately
5-10%. With the market declining and producers having to lower their
profitability margins in order to cover some of the increase in costs, a
number of players have exited the market within the past few years or
currently risk insolvency.
Washable paints are generally sold in 15l (25 kg) plastic containers, but
can also be found in 8.5l and 5l containers. Most super-premium
washable wall paints are imported.
Market
Drivers
There is growing demand for colour paints despite the fact that
the white pigment is still the most widely used.
Decorative plasters
Overview
Market size
Estimated
market
volume at
around 18 20 thousand
tons in 2011
Construction in Romania
2011
www.marketscope.ro
82
Market
structure
Construction in Romania
2011
Local production accounts for most of the overall market for decorative
plasters by volume. Also, acrylic decorative plasters seem to dominate
the market, accounting for approximately 75-85% of the overall market;
only 5-10% of the market volume was represented by mineral
decorative plasters, the rest being held by other types of decorative
plasters with inconsequential shares (silicone-based, silicate-based and
silicone-silicate-based).
www.marketscope.ro
83
Competitor
landscape
Although they are a relatively new product for the Romanian market,
decorative plasters have a crowded competitive landscape, with several
well entrenched local plants (which account for the largest part of the
market).
Besides building & finishing materials international groups (with local
production capacities e.g. BAUMIT, HENKEL), another category of
players is represented by the general paints and varnishes local
producers (DEUTEK, FABRYO, POLICOLOR, KOBER, etc.), which have
approached this segment only recently (in the past 3 - 5 years).
Moreover, new players such as MARMORIT (a KNAUF company) or
ADEPLAST have also invested in entering the decorative plasters
market.
Company
Comment
Involvement
of major dry
mortars
producers in
the
decorative
plasters
segment
BAUMIT
HENKEL
ADEPLAST
Market
drivers
Construction in Romania
2011
Key brands
Nano
por
Open
Ceres
it
Deco
Plast
www.marketscope.ro
84
Market
structure
Competitor
landscape
Construction in Romania
2011
PLASTEBOARDS
The bulk of the market is represented by brands held by RIGIPS, KNAUF
GROUP (including NORGIPS which was acquired at international level by
KNAUF in 2004, besides KNAUF brand) and SINIAT (part of ETEX GROUP;
recent market entrant who bought at international level LAFARGEs
division for plasterboards in 2012).
www.marketscope.ro
85
Please note that these companies generally also have significant shares
on the painters fillings market, especially RIGIPS and KNAUF.
Plasterboard manufacturers usually sell complete solutions: besides
plasterboards, they offer all other necessary products for mounting the
plasterboard (e.g.: metallic supporting profiles, screws, fiberglass
netting and painters fillings).
Please see below brief overview of players active on the plasterboard
market:
KNAUF
www.knauf.ro
Key issues
KNAUF Romania was founded in 1993 as a subsidiary of
KNAUF GmbH Austria, and covers the local market with
products delivered from factories in other EU countries
(Bulgaria, Poland etc.)
The company froze a 70 million EUR in a production facility
at Huedin (Cluj County) with a production capacity of 35
million m2 in 2009 due to unfavourable market conditions.
NORGIPS (part of KNAUF group) apparently markets
products solely through ARABESQUE, the leading building
materials distributor in Romania (not via Romanian
subsidiary of KNAUF); it is most likely the products are
imported from Poland
Turnover in year 2011: 23 million EUR
SINIAT
www.lafarge.ro
Key issues
Part of ETEX GROUP, entered the Romanian market through
the acquisition of LAFARGE GIPS in year 2012
Production facilities: a plasterboard plant in Bucharest ( with
a capacity of 17 million m2 yearly capacity) and a plasters
plant in Aghires, Cluj county (50 thousand tons per year)
The company announced in 2012 that it plans to resume
investments in a new production facility for plasterboards in
Turceni (Gorj county) which were first announced in 2008;
company officials declared that the construction of the new
plant will require 20-30 million EUR investments and will
have over 17 million m2 production capacity
Targets a 27% market share in 2013
Turnover in year 2011: 22.6 million EUR
RIGIPS
www.rigips.ro
Construction in Romania
2011
Key issues
Part of BPB GROUP taken over by SAINT-GOBAIN in year
www.marketscope.ro
86
2005
The company has a production capacity of 12 million m2 of
plasterboards / year based in Turda (Cluj county), further to
a 31 million EUR investment
Production capacity for gypsum based products reached
140,000 tons /year
The company also imports some of the plasterboards sold
Turnover in year 2011 (for Romanian SAINT GOBAIN division
including RIGIPS operations): 63.3 million EUR
Construction in Romania
2011
www.marketscope.ro
87
PAINTERS FILLINGS
More
fragmented
competitor
landscape
Market
drivers
Construction in Romania
2011
www.marketscope.ro
88
Flooring solutions
Flooring market overview Structure of analyzed segments
Main flooring products market size in Romania (volume
million sqm)
W
T
W
2009
W
T
W
P
ar
q
u
et
11
15
P
ar
q
u
et
22
32
C
er
a
m
ic
til
e
s
wall-to-wall
carpet
(W-T-W) represent
the bulk of the
flooring market
and are present
in all segments of
building
construction
33
C
er
a
m
ic
til
e
s
Ceramic floor
tiles, parquet and
30
23
20
17
10
4,5
0
2012*
Source: Previous research, desk research update, Marketscope estimates
Note: The term parquet includes not only wooden parquet (solid wood, engineered
parquet), but also laminated parquet (which actually represents the bulk of this category of
flooring used in Romania)
Market size,
structure and
Construction in Romania
2011
www.marketscope.ro
89
trends
of origin for imports were countries with tradition in the industry Italy,
Spain and Egypt and countries that are usually perceived as suppliers of
low cost products China, Turkey). However, imports declined in the
following period, amounting to 70-75% of total sales in year 2011. The
evolution of the ceramic tiles market is outlined in the chart below.
Demand for
ceramic tiles in
the flooring
market more
affected than
demand for
laminated
parquet
Competitive
environment
Market value has grown from 150 160 million EUR back in 2005 to a peak
of 300 million EUR in year 2008 (huge leap determined not only by volume
increase, but to gradual orientation towards more expensive products).
After the drop in 2009, the market was mostly sustained by private
refurbishment projects initiated by natural persons. In 2011, market value
dropped to about 100 130 million EUR. Average prices in year 2011 were
estimated at about 5 EUR per sqm. For the following period, players
predict stagnation (optimistic scenario) or a continued decline taking into
account the markets dependence to the local construction segment and
the relatively small number of on-going construction projects. An increase
in the construction sector would bring a growth of the flooring solution
market only after a period of time as a construction project enters the
finishing phase towards its end.
As regards the quality segmentation, most consumers seem to select
economy / budget products at a retail cost of 4 6 EUR / sqm (which
held around half of the volumes in years 2008-2009). Recently, consumers
seem to prefer large tiles (20X40 cm or 25X40 cm) instead of small ones
(20X20 cm or 30X30 cm). Also, most consumers seem to prefer elegant,
decorative tiles with different colours or decorations.
Austrian group LASSELSBERGER owns the only active local production
facility of ceramic floor and wall tiles located in Cluj-Napoca, with a current
production capacity of 6.5 million sqm, planned to be increased to about
8.5 sqm in year 2013 due to a 14 million EUR investment (the company
also has two closed plants: one in Lugoj, Timis County, closed in year 2008
and one in Bucharest, closed in year 2009 due to high stocks and low
demand). LASSELSBERGER representatives estimate the company had
around 40-42% market share in year 2011 (including imports), but the
level could be overestimated. Another inactive local production plant is
located at Reghin, Mures County and owned by Ceramica Lazar.
Bulgarian producer KAI CERAMICS, which operates a plant in Bulgaria,
situated at only 180 km from Bucharest, has managed to reach an approx.
10% market share in 2011, according to own statements.
Other powerful competitors are represented by importers with large
national or regional distribution capacities (warehouses, retail outlets,
showrooms): DELTA DESIGN, TIGER AMIRA, PAZO GROUP, SSAB, GIROM,
PREMIER COM. Also worth mentioning is the fact that some of those major
Construction in Romania
2011
www.marketscope.ro
90
importers are also distributors for LASSELSBERGER and KAI CERAMICS. The
competitive environment is completed by large building materials
distributors and DIY chains (ARABESQUE, BADUC, PRAKTIKER,
BRICOSTORE, AMBIENT, DEDEMAN, etc.), as well as by a myriad of smaller
importers and distributors.
Top specialized* players on the floor and wall ceramic tiles
Largest
specialized
players are
LASSELSBERGER,
PREMIER COM
and TIGER AMIRA
27.4
31.4
22.9
16.7
19.6
14.5
Premier Com
Lasselsberger
Turnover 2011
4.2
6.7
2.9
3.2
2.3
2.4
1.4
2.2
Delta Distribution
Girom
SSAB
Pazo
0
10
Turnover 2010
15
20
25
30
35
Wall-to-wall carpet
Market size,
structure and
trends
in Romania (million m )
15
10
5
9.5
10.0
2,8
3,8
4.5
2,5
2
2,7
2,3
2012*
2015*
Non-residential
6,7
6,2
0
2007
2008
Residential
Market almost
entirely covered
by imports
Construction in Romania
2011
www.marketscope.ro
91
2 out of 4 major
players in
insolvency in year
2012
Proges
41,4
14,9
12,3
Ax Perpetuum
Turnover 2011
0,6
0,7
Pro Confort
Turnover 2010
Piritex
34,7
0
10
20
30
40
50
Construction in Romania
2011
www.marketscope.ro
92
Laminated floor
solutions
dominate parquet
segment
Advantages and
disadvantages of
flooring solutions
Residential
Laminated parquet is the preferred
solution for cost-effectiveness and
easiness in mounting and
maintenance; also gives possibility of
stylish combinations with small
carpets
Wall-to-wall carpet is warmer and
absorbs sound
Non-residential
Wall-to-wall carpet is the preferred
solution in new offices, hotels and
exhibition centres due to thermal
and sound insulation properties,
variety of models and, sometimes,
lower overall price
Ceramic tiles, PVC and other
industrial flooring solutions are
preferred in commercial spaces,
hospitals and other special public
places, due to easier maintenance
and price
Industrial flooring
solutions market
in early stage of
development
Wide range of
massive wood
parquet finishing
products
Although the massive wood parquet sales are still rather modest in
Romania, the supply of finishing products for massive wood floors is
varied, including international brands LIKE MAPEI, BONA, UZIN, FORBO,
THOMSIT, RECOLL, CHIMIVER, ARTELIT, or SIKA.
Construction in Romania
2011
www.marketscope.ro
93
Construction in Romania
2011
www.marketscope.ro
94
Construction equipment
Heavy construction equipment
Overview
Market size
Market
Construction in Romania
2011
www.marketscope.ro
95
structure
Main types of
equipment /
machinery
(72%) were primary units: 141 excavators units (16% out of total
primary units), 101 loaders units (12% out of total primary units), 149
compact equipment units (17% out of total primary units) and 475
backhoe loaders units (55% out of total primary units). Although
backhoe loaders continue to be in demand, users seem to show growing
interest in specialized equipment.
Secondary units represented about 28% of the market in 2011 (by
number). Road equipment (compactors, pavers etc.) was the product
category with the most significant increase on the market (182% growth
in year 2011 compared to year 2010). Complementary equipment
followed the general trend of the market (70% growth in 2011 compared
to 2010).
Approximately 25% of excavators sold in Romania in year 2008 had an
operating weight of under 12 tons while 30% of loaders sold in Romania
in 2008 had an engine power of over 150 KW / 200 HP. Backhoes within
the price range of 50 - 100 thousands EUR seem to remain the product
with the highest sales on the market (by number).
Second-hand equipment still holds a significant share of the market;
however, new equipment has increased its share mostly due to increase
in available budgets in recent years. Second-hand purchases were also
influenced (to a minor extent) by problems with stock availability of
certain equipment.
Approximately 60% of equipment purchases are made via leasing.
Competitor
landscape
BERGERAT
MONNOYEUR
www.bm-cat.ro
MARCOM
RMC 94
www.marcom.ro
Construction in Romania
2011
www.marketscope.ro
96
TERRA
ROMANIA
www.terraromania.ro
Other major
players
Construction in Romania
2011
etc.
According to company officials, MARCOM is market leader on the
backhoe loader, excavator and loader segments.
Total sales in 2007 reached 1,100 units of which 780 units were
Komatsu
Has 8 sales offices across the country: Baia Mare, Brasov,
Bucuresti (central office), Constanta, Galati, Iasi, Timisoara and
Turda
Invested several million EUR in recent years in distribution
network expansion
Has new and second-hand equipment in its product portfolio and
offers financing solutions
Turnover 2011: 28.6 million EUR
Present on the Romanian market since year 2001, local
subsidiary of TERRA BAUMASCHINEN;
It is sole distributor for Romania of JCB equipment; other brands
include HBM Nobas, Comansa, Crown, Nissan Forklift, Palfinger,
Jumbo and Allroun
Turnover 2011: 24.3 million EUR
www.marketscope.ro
97
Other
information
Construction in Romania
2011
www.marketscope.ro
98
Market size
Dynamic market that clearly overcame the difficult crisis period (1015% y-o-y growth in years 2011 and 2012)
Numerous brands on the market with BOSCH and MAKITA clearly
dominating.
Fragmented distribution.
It is estimated that market value for professional portable electric power
tools reached approximately 20 million EUR in year 2011 (10-15%
increase vs. the previous year).
After significant drops in year 2009 ( minus 75% vs. 2008 approximately 70 million EUR) and a more subtle decrease in year 2010
( minus10%), the market started to recover in year 2011 and is
expected to continue its ascending trend in year 2012, in spite of lower
results during the first months of the year (due to difficult weather
conditions, which influence intensity of construction works).
Market
structure
Competitor
landscape
Company
ROBERT BOSCH
www.bosch-pt.ro
Brief profile
59.3
Includes drilling and demolition, diamond coring, cutting, screw fastening and direct fastening products
Construction in Romania
2011
www.marketscope.ro
99
HILTI
www.hilti.ro
HITACHI
1.8
MAKITA
www.makita.ro
107.81
Other brands Other professional power tools brands present on the Romanian market
(through various distributors) include: DUSS, KRESS, PRO TOOL, FEIN,
FLEX, ITW, CASALS, RYOBI, KEIL, BEAST, MEISTER etc.
Besides all aforementioned players, one should also note strong sales
for Einhell Romania (local subsidiary of German producer of electric
power tools). Einhells turnover in year 2011 reached 5.9 million EUR. In
2008, the company invested 3 million EUR in the completion of the
logistic centre close to Bucharest. The company has three product lines:
Red professional power tools and gardening tools, Blue DIY/semiprofessional power tools and gardening tools, Auto- auto tools. Among
Einhell Romania key accounts: Metro, Praktiker, Bricostore, Selgros,
Real, Cora, Carrefour etc.
1
Turnover includes both Makita companies in Romania: Makita Romania (import of electric power tools turnover:
8.7 million EUR) and Makita EU (production of electric power tools turnover: 99.1 million EUR)
Construction in Romania
2011
www.marketscope.ro
100
MARKET DRIVERS
Due to the fact that for more and more buildings contractors use
higher quality concrete, it is expected an increase in demand for
diamond coring tools
Banning the usage of corded electric power tools on metallic
scaffolding will increase demand for cordless power tools
Sales through DIY store chains are expected to keep upward trend
due to growing demand by small companies or individuals active in
the refurbishing works segment, which prefer to buy their tools (even
professional lines) from DIY stores.
Construction in Romania
2011
www.marketscope.ro
101
IV.
Overview
DIY chains
Construction in Romania
2011
www.marketscope.ro
102
one hand the cost of developing a new outlet has decreased while on
the other hand banks have a stricter loan policy. Players seem to focus
more on maintaining their position rather than expanding their
network. There are however exceptions, as DEDEMAN opened 5 new
stores in year 2011.
Competition in the sector has become fiercer as market growth may not
sustain newly entered competitors, which could grasp market shares
only from existing DIY chains; market situation may ultimately lead to
possible exits or takeovers.
Brief
financials for
DIY chains
show the
recent
success of
DEDEMAN
Turnover in
Y2011 (mil EUR)
Turnover in
Y2010 (mil EUR)
DEDEMAN
475.8
369.1
31
12
PRAKTIKER
156.2
197.4
27
25
BRICOSTORE
144.4
148.3
15
13
AMBIENT1
138.2
107.7
14
15
BAUMAX
135.5
132.0
15
HORNBACH
84.7
71.3
OBI
42.1
39.2
MR. BRICOLAGE2
16.7
17.2
LEROY MERLIN3
6.1
0.004
Company
Types of services provided by DIY market players include: homedelivery, colour-mixing, cutting, tool rental services, free design
consultation etc. Also, most have set up partnerships with financial
institutions in order for clients to access small loans on the spot.
DIY chains in Romania
Company
DEDEMAN
Key issues
about DIY
chains
development
Brief profile
Out of all major players, DEDEMAN was the only
company to make profit in year 2011
Extensive expansion of outlet network in recent
years (from 12 in 2008 to 31 in 2012), currently
covering most of Romania
Average investment per outlet 10 million EUR
30% increase in turnover in year 2011 vs. 2010
Larger turnover in 2011 than the next three players
Approximately 45% of the companys turnover represented by sales through DIY network, while the rest is held
by B2B distribution of construction materials. Number of outlets in the table includes only the largest DIY units.
2
Turnover for BRICO EXPERT SA (company operating the chain)
3
Company opened a DIY store in summer of 2011 (hence the low turnover so far)
Construction in Romania
2011
www.marketscope.ro
103
combined
DEDEMAN overcame PRAKTIKER in value of sales in
year 2010, thus becoming the market leader in the
segment.
Entered the Romanian market in 2002
Average investment per outlet 10 million EUR
Sales increase in year 2007: 55%
Rapid outlet network expansion in pre-crisis period,
currently covering most of Romanias key areas
Currently halted network expansion and focuses on
trying to maintain its market position (though
network expansion remains a priority)
PRAKTIKER
Key issues
about DIY
chains
development
PRAKTIKER
BRICOSTORE
AMBIENT
BAUMAX
HORNBACH
Construction in Romania
2011
www.marketscope.ro
104
OBI
MR.
BRICOLAGE
(BRICO
EXPERT)
LEROY
MERLIN
Construction in Romania
2011
www.marketscope.ro
105
UKRAINE
BT
MM
SM
SV
HUNGARY
Geographical
spread of DIY
chains
BH
BN
SJ
NT
CJ
HR
MS
AR
REPUBLIC OF
MOLDOVA
IS
VS
BC
AB
SB
HD
TM
CV
BV
VN
UKRAINE
GL
BZ
GJ
CS
AG
VL
IF
4
3 3
2 22
DJ
OT
TR
TL
DB
MH
SERBIA
BR
PH
IL
CL
BLACK SEA
CT
GR
BULGARIA
Praktiker
Bricostore
Obi
Ambient
Baumax
Hornbach
Dedeman
Mr. Bricolage
Leroy Merlin
Notes:
5 smaller outlets and 6 logistic centres / warehouses (mostly for B2B sales) in the Ambient
network were not included in this map
Numbers on the bullets represent the number of outlets the company opened in the city
Construction in Romania
2011
www.marketscope.ro
106
Company
Large
building
materials
distributors
ARABESQUE
BADUC
MENATWOR
K1
Brief profile
Largest building materials
distributor on the Romanian market,
with 18 distribution points across
the country and several units
opened in Republic of Moldova,
Serbia, Bulgaria and Ukraine, with
interest in expanding to other
neighbouring countries.
Logistic capabilities: 600 - 700
trucks
Product range: over 30,000 items
80% of sales - on the Romanian
market
The company was set up in 1970
and privatized in year 2005
Active in the southern part of
Romania
Has own processing facilities: sheet
metal processing (cutting,
expansion etc.), welded housings,
reinforcing steel
Offers turnkey building materials
solutions
Product range: over 30,000 items
Group of companies involved in the
distribution, production and
mounting of building materials,
flooring solutions, heating and
ventilation systems, lighting
products (20 companies).
Main office in Bucharest and 4 local
subsidiaries based in Cluj-Napoca,
Constanta, Craiova and Bacau
MENATWORK EST PREFABRICATE
(distributor of construction
materials, electrical equipment and
heating and ventilation solutions)
and METAL WORK INDUSTRY
(producer of metal products)
generate approximately 88% of the
groups turnover.
Part of the group is also
MENATWORK CONSTRUCT
(contractor company)
Over 120 partners (suppliers) for
the distribution division.
Own brands: METALWORK,
MENATWORK, QUATTRO, CARSON
Turnover
(mil EUR)
2011 2010
404.8
354.5
27.5
31.6
36.2
30.3
Construction in Romania
2011
www.marketscope.ro
107
TIGER
AMIRA
EST etc.
Outlets in Oradea, Bucharest,
Timisoara, Cluj-Napoca, Arad
Craiova and Iasi
Product range: over 20,000 items
Collaborates with over 40
international producers and 15 local
producers
31.4
27.4
8.4
4.2
2.3
1.4
Ceramic
Ceramic
Ceramic
Ceramic
tiles
tiles
tiles
tiles
PIRITEX
PROGES
34.7*
33.4
Warm floorings
Warm floorings
CRISTAL BRAD
ISOPALROM
DAFERMANN
11.7
3.7
6
Float glass
Float glass
Float glass
ROCAST
PROENERG
AGENT TRADE
METATOOLS
9.2
7.7
6.9
3.8
Power
Power
Power
Power
tools
tools
tools
tools
Construction in Romania
2011
www.marketscope.ro
108
flooring adhesives; for power tools drill bits, hole saws, diamond core
cutters, jigsaw blades etc.
It is estimated that specialized distributors share at consumer level for
ceramic tiles will grow to around 30% in year 2013 (vs. 10% in year
2010).
Other sales
channels
Construction in Romania
2011
www.marketscope.ro
109
Market
Drivers
Construction in Romania
2011
www.marketscope.ro
110