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Romania Construction Materials Report - Q4, 2014

Romania Construction Materials Report - Q4, 2014

This report covers the market developments in Q3/2014, as well as the data available as of January 2015.

The performance of the construction materials market in Q3/2014 paralleled the decline of the construction sector over the quarter. While the construction works volume dropped by 11.2% y/y in Q3, the construction materials output also diminished by 5% y/y, after having increased by 12.9% y/y in Q2 and 7.8% y/y in Q1. Nonetheless, the good performance in the first half of the year likely managed to offset the decline, since players’ estimates see the value of the market stagnant y/y in full-year 2014.

The cement segment increased by 5.7% y/y in January-September 2014 in value terms, with all the three major producers having recorded higher y/y sales over the period. Most of the demand for cement was generated by residential and commercial constructions, as infrastructure works remained subdued.

The cheering hike of the residential construction works (up by 35.7% y/y in January-November 2014) also impacted positively on the masonry segment. In volume terms, the masonry market grew by 3-5% y/y in 2014, yet in value terms, due to low prices, the market remains much below the 2008 level.

The construction materials and DIY retailers moved on with expansion plans in Q3/2014 and announced new openings this year as well. The cumulated revenues of the top six players increased at double-digit pace y/y in H1/2014, according to market data.

Key points:
• Building materials market value stagnant y/y in 2014, expected to grow in 2015
• Construction materials output down y/y in Q3/2014
• Cement sales increase y/y in Jan-Sep 2014, to continue on upward path in 2015
• Masonry market increases modestly y/y in 2014, driven by residential construction rebound
• Plasterboard market value stagnant y/y in 2014
• Cumulated sales of major DYI players rise 11.8% y/y in H1/2014


Contents
Executive summary 4
Market overview 5
Building materials market value stagnant y/y in 2014, expected to grow in 2015 5
Construction materials output down y/y in Q3/2014 5
Producers’ prices decline for fourth consecutive quarter in Q3/2014 6
Foreign trade with construction materials grows y/y in Jan-Sep 2014 7
Construction works index plunges 11.2% y/y in Q3/2014 8
Number of residential permits drops 0.5% y/y in Q4/2014 10
Number of finished dwellings up y/y for third consecutive quarter 10
Value added by construction to resume growth in 2015 11
Government scales down road infrastructure plan, to concentrate on lower grade roads 12
Construction of motorways remains sluggish in 2014 12
Cement, concrete 12
Cement sales increase y/y in Jan-Sep 2014, to continue on upward path in 2015 12
Holcim’s cement sales up 4.3% y/y in Jan-Sep 2014 13
Lafarge reports increase of cement sales, backed by improving activity in residential constructions 13
Carpat Beton opens concrete station in Targoviste 13
Ceramic bricks, tiles 13
Masonry market increases modestly y/y in 2014, driven by residential construction rebound 13
AAC brick sales rise 10% y/y in 2014 14
Luxembourg-based fund raises stake in Cemacon to 38.7% 14
Wienerberger reports higher revenues, earnings in Romania in Q3/2014 14
Macon’s sales rise in Jan-Sep 2014, on higher demand for AAC bricks, concrete prefabs, terracotta 14
Thermal insulation, finishing materials 15
Plasterboard market value stagnant y/y in 2014 15
AdePlast projects double-digit y/y increase of turnover in 2014 15
Saint-Gobain Weber targets 10% y/y increase of sales in 2015 15
Construction material, DIY retailers 16
Cumulated sales of major DYI players rise 11.8% y/y in H1/2014 16
Dedeman to open fourth store in Bucharest, reports 27% y/y turnover increase in H1/2014 16
Hornbach to open store in Sibiu, on former OBI location 16
Leroy Merlin finalizes acquisition of bauMax Romania 16

Table 1 Non-metallic mineral products output in 2008-2014 (monthly, y/y) 6
Table 2 Output volume of selected construction materials in 2004-2013 (annual) 6
Table 3 Construction materials- Producers' price index in 2008-2014 (monthly, y/y) 7
Table 4 Foreign trade with non metallic mineral products in 2005-2014 (EUR mn, y/y) 8
Table 5 Construction sector performance in 2007-2014 (y/y) 9
Table 6 Construction works index in 2011-2014- Quarterly performance by structure (y/y) 9
Table 7 Construction works index in 2011-2014 - Quarterly performance by destination (y/y) 9
Table 8 Licenses for residential buildings issued quarterly in 2012-2014 (quarterly, number, y/y) 10
Table 9 Licenses for residential buildings issued in 2007-2014 (number, annual, y/y) 10
Table 10 Completed dwellings per type of financing in 2012-2014 (number, y/y, quarterly) 11
Table 11 GDP and Construction output in 2012-2017f (y/y) 11

Figure 1 Manufacturing of other non-metallic mineral products - Monthly output indices in 2007-2014 (2010=100, unadjusted series) 5
Figure 2 Production (Gross Output) of selected construction materials in 2007-2017f ($mn) 6
Figure 3 Construction materials- Producers' price index in 2007-2014 (monthly, 2010=100) 7
Figure 4 Construction works index in 2005-2014 (monthly, y/y) 8
Figure 5 Construction works index in 2005-2014 (monthly, 2010=100) 9
Figure 6 Licenses for residential buildings issued in 2007-2014 (number, monthly) 10
Figure 7 Construction gross output in 2003-2017f (bn 1995 $, y/y) 11
Figure 8 Refractory bricks output volume in 2002-2013 (annual) 14

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