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Construction and building materials

sector in Romania
Overview 2011 and Outlook 2012 2015
November 2012
Client: Trade and Investment Promotion Section of the Republic of Poland (WPHI)

Brief methodology and limitations


The methodology for elaborating this report in based on desk research only (information
from various secondary sources):
o Official statistical sources
o Specialized, economic and general publications
o Own knowledge base (industry information from previous research)
o Industry reports
o Business directories and B2B portals
o Internet
The analysis for this project was backed up by MARKETSCOPES continuous research
undertaken in the construction sector in Romania in the past 10 years, via a market
intelligence approach including thorough desk research and interviews with knowledgeable
industry experts and major players in the sector.
Please note that detailing and accuracy for each section of the report were influenced by
the availability and relevance of information in secondary sources (obtainable upon
proposed methodology and within agreed timeframe).
MARKETSCOPE cannot be held responsible for any decisions made by the client on the basis
of this report.

Construction in Romania
2011

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TABLE OF CONTENTS
___________________________________________________________________

I.

ROMANIA MACROECONOMIC OVERVIEW...................................................................................3

II. OVERVIEW OF THE ROMANIAN CONSTRUCTION SECTOR....................................................5


III.

PROFILES OF MAJOR BUILDING MATERIALS MARKETS IN ROMANIA......................11

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.

BUILDING MATERIALS DISTRIBUTION........................................................................................81

Construction in Romania
2011

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I. ROMANIA MACROECONOMIC OVERVIEW


UKRAINE

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%

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-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

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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

Population (thousand inhabitants)


Gross Domestic Product (GDP - billion EUR)
GDP real growth (%)
Gross value added from:
- Industry (%)
- Agriculture, forestry, fishing, hunting (%)
- Construction (%)
- services (%)
Average rate of inflation (%)
End of the year inflation (%)
Exchange rate (RON for 1 EUR)

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

Commercial balance (FOB - CIF, in million EUR)

-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

- GDP share (%)


Unemployment rate (%)
Average monthly gross earnings per capita (EUR)
Real earnings growth (%)

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

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critical in terms of proving whether the economy can be solid and reliable for investors or
not.

Construction in Romania
2011

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II.

OVERVIEW OF THE ROMANIAN CONSTRUCTION


SECTOR

Size and structure

High
potential
sector within
national
economy

Construction has been amongst the most dynamic economic sectors of


Romania, achieving annual growth of 20 - 30% in recent pre-crisis years.
With a 33.7% increase in real value in 2007, Romanias construction sector
obtained the top place among EU members in terms of growth; in 2008,
Romania was constantly placed among the top three EU members
according to their quarterly growth of the same indicator. The global crisis
however has severely affected construction in Romania, as financing was
hindered or blocked at all levels.
Dynamic of construction production volume index
total and by type
60%
50%
40%
30%
20%
10%
0%
-10%
-20%
-30%

2007

2008

2009

2010

2011 2012* 2013* 2014* 2015*

Total

33.03%27.04% -15.10 -13.20 2.80% 2.20%

Buildings

51.50%36.99% -17.80 -23.90 2.90%

-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).

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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.

The overall value of construction works in Romania


(billion EUR)
30

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)

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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

9,510 14,998 19,779

14,527

13,491

3,534

5,069

9,434 14,894 19,651

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

Source: National Institute of Statistics

Nonresidential
building is
not the main
driver for
growth
anymore

In a breakdown of construction works on contract by value, included in the


following chart, one can observe that fluctuations of different components
have been major in the past 3 years. The most noticeable change is the
drop in share of non-residential buildings in years 2009 and 2010, which is
more significant given that residential buildings have witnessed a
downward trend, too. Transport infrastructure has strengthened position by
gaining extra 5% in the overall market (from 20% to 25% share),
confirming the segment as the most reliable in terms of investments
during crisis.
Structure by value of construction works on contract
100%

Residential buildings

90%
33.0%

80%
70%
60%
50%

24.0%

Transport infrastructure

25.0%

Pipes, electric and


communication lines

40%
30%
20%

6.0%

2.0%
11.0%

10%
0%
2002

2004

2006

2007

2008

2009

Non residential buidings

Complex constructions in
industrial areas
Other civil engineering
constructions

2010

Source: National Institute of Statistics

The number
of completed
dwellings in
2009 has not

Construction in Romania
2011

In addition to major infrastructure projects (which in Romania, in many


cases have either been delayed or put on hold due to lack of funds,
bureaucracy or legal investigations), the evolution of new dwellings
completed is another important indicator of the development of a
countrys construction sector. Although the number of announced or
started residential projects has increased considerably in recent pre-crisis

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dropped
massively, as
many works
were started
in peak
years.

years, the number of delivered dwellings has not risen to expectations,


often works being either delayed or even abandoned due to various
reasons. A historical upward trend can be noticed from the following
graph, with impressive 20% growth registered in 2006 and 2007 and a
record of +40% in year 2008; during crisis period, the low in terms of
dynamics was reached in year 2010, but the downward evolution
continued even in year 2011. However, the clear gap between the existing
stock of 8 million dwellings and the potential demand in the housing
segment (estimated by some experts at another half a million dwellings, at
least) is envisaged to determine growth rates above average (for overall
Evolution and dynamic of new finished dwellings
80,000

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%

9.1% 20.6% 19.3% 42.2%

-7%

-22%

-7%

construction) starting with years 2014 2015.


Source: National Institute of Statistics

Concentratio
n of new
dwelling
construction

North-East and North-West regions of Romania have concentrated together


a third of the new dwellings completed in the 2010 2011 timeframe. The
lowest number of new dwellings completed in the past two years was
registered in the West Region and South-West Region (possible
explanations are rather different: West comprises only 4 counties and thus
a low number of inhabitants, while South-West is among regions with the
lowest GDP per capita).
The number of new dwellings completed in Bucharest and outskirts
account for 13% out of the total units finalized in 2010 2011 timeframe.

Developments during recession


Residential
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

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10

advanced projects for which funding was still available;


a positive effect of the crisis was bursting the real estate bubble,
leading to the cease of speculative transactions that were hindering
the markets maturing process;
a reduction in useful area of flats, from 100 to 60 m2 within new
projects;
new projects are much smaller and benefit both from the lower
prices of construction materials and a limited competition at
completion date;
anti-speculative measures taken by the Government introduction
of a 16% tax on real estate transactions completed by individuals
for commercial purposes;
National Housing Agency intentions to expand its activities: not
only implementing projects for social housing, but also have
mortgage-type offers directed at families with low to medium
budgets.
Nonresidential
building
construction

Key information

Infrastructure

Key information

up until recently, most non-residential projects were concentrated


in the Bucharest area, but due to increasing demand, projects were
also launched in other high potential areas (e.g. the western part of
Romania);
another possible positive effect of the crisis would be the avoidance
of an oversupply on the commercial spaces renting market;
logistic parks construction has been less affected by the crisis;
the area around the Bucharest-Pitesti highway continued to be
preferred for logistic parks;
commercial malls construction has been limited to those projects
that gather the critical mass of renting clients and that benefit
from a well-studied concept, an experienced developer and solid
funding.

bureaucracy and deficient authorisation granting procedure were


amongst the major reasons for poor results in infrastructure
projects progress;
potential access to important funding both from the Romanian
budget and from European funds (but absorption rate is low);
new highway segments finalized: parts of Transylvania Highway,
parts of Bucharest-Brasov, parts of Bucharest ring road, AradTimisoara, Cernavoda-Constanta;
All in all, the
immediate
major effects
of the crisis
were:

Construction in Romania
2011

Around 20,000 construction companies facing insolvency or


bankruptcy
Apparently, the share of construction works demanded by the public
sector grew from 30% to 60% during year 2009 (as financing in the
private sector has been difficult and expensive)
A total of more than 50,000 workers were fired in the sector
The number of building permits for dwellings dropped by 20% in the
first 9 months of year 2009 (vs. similar period of previous year)
Romania has had the steepest drop of construction activity in July and

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11

August 2009 (as compared to year 2008) among EU members, after


being in 2006 2008 one of the top countries in terms of dynamic
growth of this sector
Prima Casa
programme

The Government has launched a programme meant to stimulate demand


for dwellings, called Prima casa (First home), but the low level of the
sum guaranteed by the state within loan applications prevented the
initiative to be a real success that would boost new dwelling construction
the effect was a slight growth of demand for dwellings costing 50,000
70,000 EUR (basically old dwellings or newly constructed dwellings with
low useful areas studio or two-room apartments). The programme seems
to have indeed encouraged transactions, but the role in unfreezing new
residential projects has been limited.

Latest developments in the Romanian construction sector (years 2011


2012)
Overall value of building materials market has dropped from roughly
5 billion EUR in 2008 to 3 billion EUR in year 2011 (similar level
expected in 2012, too).
Players in all segments (building materials producers, contractors
etc.) were strongly affected, as residential construction was severely
hindered by lack of financing, developments in the non-residential
building segment were even slower due to the sufficient number of
projects already completed in pre-crisis years, while progress within
infrastructure projects became a fact only from the second half of
2011.
Price strengthened its position as main decision making criteria for
building materials and construction works, thus generating profit
margin drops for suppliers and the possibility of lower quality
products and services to enjoy some success in the market.
Orientation towards exports of some building materials producers
and of some contractors.
Despite tough market conditions, leading producers in some
building materials segments have announced investments in new
production facilities.

Construction in Romania
2011

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12

III.

PROFILES OF MAJOR BUILDING MATERIALS


MARKETS IN ROMANIA
Road bitumen

Overview

Bitumen market value increased significantly in years 2007


2008, but witnessed a steep slide during crisis year 2009.
Only two local producers of bitumen are still active, further to the
decommissioning of main producer ARPECHIM (held by OMV
PETROM).
Imports currently account for the bulk of the market volume, with
still active local producers controlling less than 10%.

Market size
and forecast

Source: Previous research, desk research update, Marketscope estimates.

Market value for bitumen increased significantly in the past years


mostly because of the dominance of imports, which lead to a major
growth in price per ton. The volume evolution is thus rather different in
% terms, as shown below.

Volume peak
in 2008 to be
reached
again by
2015

Source: Previous research, desk research update, Marketscope estimates.

Revival of major infrastructure projects propelled the road bitumen


market to reach 440 thousand tons in year 2011, with expectations for a

Construction in Romania
2011

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13

steady pace of 9 10% growth in the next years (y-o-y).


Market
structure

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

There are 10 oil refineries in Romania of which 6 have bitumen


producing facilities out of three refineries that used to produce
bitumen in the recent period, apparently only one is currently active
(VEGA, controlled by ROMPETROL). The other two players that recently
have put production on hold are ARPECHIM (as already mentioned) and
CRISANA BALC (former PETROLSUB refinery, recently refurbished and
announced as a new market entrant, but has yet to confirm in the
market).
Out of the 3 refineries with facilities for bitumen that have not been
used for a long time, the one in Darmanesti seems to be potential target
for investments in refurbishments, as owners interest have been
triggered by the domination of imports at high prices in a high potential
sector like road construction.
Another company with bitumen production facility (but not as part of a
refinery) is DELTA ACM (partnership with OMV).

Domination
of imports:
specialized
importers
and direct
imports of

Construction in Romania
2011

Imports of bitumen have amounted close to 400 thousand tons in year


2011, originating mostly from Hungary (120,000 tons), Italy and
Bulgaria (70,000 tons each). Other import sources include OMV
refineries in Austria (this players also imports from Hungary) and Polish
producer PKN.

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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

ownership: ROMPETROL (in turn controlled by KAZ MUNAI GAZ);


bitumen production capacity: 65,000 tons/year;
estimated bitumen output: 30,000 tons in year 2010
(however, at present production seems to be more limited, due to
lack of raw materials);
location: Ploiesti;
investments: 6.2 million EUR in the period 2005-2007 for new
bitumen installation; future investments (up to 1.6 million EUR)
have been directed towards obtaining superior modified bitumen,
used for bitumen waterproofing membranes and primers;
ownership: ECODIESEL Oradea;
bitumen production capacity: 250,000 tons/year
(production was restarted in year 2010, but apparently, the facility
is not active at present);
location: Suplacu de Barcau (Bihor county);
other information: PETROLSUBs product mix is focused on
bitumen non-paraffin road bitumen, light bitumen for asphalt
cardboard, bitumen for waterproofing, cationic bitumen emulsions
but the refinery will also produce fuels and black oil.
DELTA ACM 93 is one of the top contractors in Romania and is
among a group of companies with success in winning public
contracts for road construction and rehabilitation, along with PA&CO,
UMB SPEDITION or EUROCONSTRUCT TRADING
The company finalized in year 2010 the set up of a bitumen
production facility within one of their production plants near
Bucharest (in Popesti-Leordeni); the project is part of a deal with
OMV, with the oil & gas giant supplying raw materials for the final
product and marketing the resulted bitumen, while DELTA ACM
getting a share of the revenues.
The product is a polymer-modified bitumen and company officials
stated that the production capacity reaches 50 tons per hour and
were expecting to sell around 25,000 tons per year.

KEY SPECIALIZED IMPORTERS OF BITUMEN


BITUMTRADI
NG
www.bitumtrading.r
o

Construction in Romania
2011

BITUM TRADING operates a bitumen terminal at the Black Sea


coast, in Mangalia (Constanta County). Delivery capacity is
between 800 and 2,800 tons per day.

www.marketscope.ro

15

SARGEANT
MARINE

www.sargeant.ne
t

EURO ACTIV
Zalau

www.bitum.ro

On-site delivery is made either by trucks with loads of 25 35


tons, or by trains (45 tons per wagon, minimum 12-wagon
transport). The company has its own quality control lab and claims
it can deliver bitumen at a temperature up to 160 degrees Celsius.
BITUM TRADING is controlled by COLAS Romania and it appears
to be the most important bitumen supplier in Romania (in terms of
volumes delivered, roughly estimated at over 60 thousand tons in
peak years)
The company is part of the SARGEANT Group a major multicountry asphalt shipping and bitumen terminal operator with
terminals in North America and Europe based on own statements,
they operated one of the largest fleets of asphalt tankers and
barges in the world, enabling them to supply their valued
customers with quality products via safe and efficient modes of
transportation.
storage facilities: currently, the terminal (located in Constanta)
has 4 storage tanks of 2,000 tons each, 2 tanks of 400 tons each
and 1 tank of 100 tons;
other information: bitumen imports may have reached 45,000
tons in peak years (based on official financial figures released).
EURO ACTIV is a distributor of bitumen sourced both from the
local market and imported, both normal and PMB. Distribution is
carried out by companys own 30-truck fleet with specialized
trailers.
Bitumen sales exceed 30 thousand tons, based on recent
estimations.

Pricing

Bitumen price has registered a spectacular growth in the past 10 years,


from around 200 USD per ton in year 2003 to an average of 350 EUR in
year 2008 (and up to 400 450 EUR per ton in peak periods). In years
2009 - 2010, price has dropped again to an average of about 300 - 320
EUR per ton, but the limitation of local production has brought another
major growth starting with 2011 bitumen price has risen to 450 500
EUR per ton, determining mass-media to be concerned that Romania
pays the highest prices for road and motorway construction in Europe.

Main market
driver: Road
infrastructure
in Romania

It is a well-known fact that Romania has one of the weakest road


networks in the EU, with the lowest number of motorway kilometres (a
total of around 350 km, in several road sections) and still a large share
of not modernized roads (almost 3 quarters of the road kilometres,
especially in rural areas)
The national roads network amounts to 17 thousand km (mostly
modernized), but for half of the length of modernized national roads the
exploitation period is currently exceeded. Moreover, the situation is
critical in terms of county and village roads. In this respect, the country
has been implementing a national roads rehabilitation program that was
supposed to cover two thirds of the total network of national roads by
year 2015, but the current state of many of the respective roads point
out that the implementation has been faulty due to bureaucracy,
inconsistency of involved authorities and the low level of absorption of
available EU funds (to name only a few of the reasons). All in all, the
sector has yet to be invested in for Romania to close the gap to
developed EU countries.

Construction in Romania
2011

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16

Worth mentioning is that besides normal wear of some roads, budgets


are required from authorities for improving road surfaces affected by
low quality works sometimes performed by contractors.
Furthermore, the airports in Romania require massive investments in
their lanes (also made of asphalt): by 2025, it is estimated that the 17
Romanian airports will require rehabilitation works worth over 1 billion
EUR.
Bitumen consumption is also sustained by the fact that cement road
building in Romania has not enjoyed success, mainly due to the complex
and expensive technology required by this alternate solution, but also
due to the lack of experience of local contractors in implementing the
solution.

Construction in Romania
2011

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17

Cement, concrete, aggregates


Cement
Overview

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

Market size &


growth

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

Increases registered in the production of cement until 2004 were modest,


but due to the spectacular dynamic of construction works in all segments,
the demand for cement increased also, leading to growing productivity
and quantities produced. Market players, as well as experts in the field,
were taken by surprise by the +20% increases in cement production and
consumption registered in 2006-2007, since for at least 7 years before, the
cement per capita consumption in Romania was much inferior to other
EU members, even when compared to newly adhered countries from
Eastern Europe. The strong growth of the Romanian construction sector,
and consequently of cement consumption, led to a per capita
consumption of 516 kg/person in 2008, exceeding for the first time the
European average.
Given that imports and exports do not influence significantly the
consumption, one can conclude that the market volume in the cement
business is represented by the overall production level reached by the 3
producers.

Source: Previous research, desk research update, Marketscope estimates.

The slight upward trend is expected to continue in 2013 2015 with 5


8% y-o-y increases. All in all, cement production remains a high-potential
industry, as increases of up to 10% in cement consumption are expected
post-crisis at least until 2018-2020, driven by the severe lack in housing
and infrastructure.
Local
production
covers +95%
of the
demand

Construction in Romania
2011

Imports of cement represent a minute part of the market, usually being


operated by small distributors or small construction companies that use it
for their own needs (there are no specialised importing distributors of large
dimensions); main countries of origin for imported cement are usually
Hungary, Ukraine and Republic of Moldova. Although in 2007 imports

www.marketscope.ro

19

came to represent about 7% of the cement consumption in Romania


(taking into consideration the amount of imported clinker used within the
grinding facilities of local competitors and the quantity of cement resulted,
besides imported cement), in 2008 and from that point on they reverted to
representing an inconsequential share of the market.
Lafarge is the
only player
that has
exported
significant
volumes of
cement
produced in
Romania

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

Environmental issues and an underdeveloped market were the major


problems which the international companies had to deal with further to
their market entry: the technical and environmental status of the factories
was well below European norms & regulations and related international
standards, while the market was undersized after 1989, the production
was reduced drastically due to low demand and the possibility of export
was limited. The situation changed due to the impressive investments
made by the companies (1 billion EUR cumulated investments until 2006):
today, all the factories have integrated environmental permits in
accordance with the European Union legislation.

Key
producers
have fairly
close results
in terms of
turnover and
production

Source: Ministry of Finance

Construction in Romania
2011

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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

CEMINTER is a company operating a cement terminal at the Black Sea, the


product being sourced from the homonymous Spanish group (volumes
level is inconsequential as compared to production of the key
competitors).

Out of the generic 5 types of cement defined by standards (excluding


special cements that have specific regulations), in Romania are produced
several types of CEM I and CEM II cements. Portland composite cements (II
A and B) dominate the market (about 80% of cements used), with the CEM
II/B type accounting for about a half of the total volumes. Regarding type
of delivery, sacks are currently the preferred method of delivery (roughly
55% of cement sold), but bulk deliveries have been steadily gaining
ground and will probably surpass in a few years deliveries by sack (the
same as in mature cement markets in Western Europe).
As for special cements, LAFARGE and CARPATCEMENT produce low
hydration cements
(H II) and cements for roads and airport runways (CD40), while LAFARGE
also produces cement resistant to sulphurous waters and for drilling wells
(SR I and S2RS); masonry cements are produced by HOLCIM and LAFARGE
under the Tenco and Multibat brand names, respectively. Additionally,
HOLCIM used to produce white cement, but due to the unsustainable rises
in the methane gas price (an important element in white cement
production), the company decided in 2007 to give up on the production of
this type of cement (the HOLCIMs Turda factory was the only production
facility in Romania for white cement).

Usage

In Romania, cement is used in the production of three main product


categories (which contain cement in shares ranging from 10 to 20%):
wet or ready-mix products (concrete, mortars and blanket
compounds);
solid compact products (AAC, concrete prefabricated products
roof tiles, pavements, etc.);
solid powder products (adhesives, plasters, dry mortars and selflevelling compounds, etc.).
The main use in terms of volumes needed is the obtaining of wet or readymix products (accounting around 75% of the cement used). These
compounds have a large usage in the construction sector and are
delivered already prepared by specialised stations or are mixed onsite by
final users with own mixing equipment.

Construction in Romania
2011

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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.

Concrete and aggregates


Overview

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

It is estimated that almost 12 million m of ready-mix concrete were sold


in 2007, while in 2008 the market registered an over 20% increase,
topping at around 15 million m. Despite initial positive growth
estimations for 2009 (ranging from 3-4% moderate scenario to 10%
optimistic scenario), the first half of 2009 proved to be worse than
anticipated: some of the most important players on the market
registered as much as 50% drops in sales. Although some suppliers did
not expect the market to plummet, the reality showed one of the
steepest declines in the entire construction sector: almost 50% (market
reaching only 8 million m by the end of year 2009). Further to a
decrease of 10 15% in year 2010, the concrete market is perceived as
to have registered a similar slight growth pace as the construction works
value in period 2011 2012 (as being the key material within the
sector).
However, the figures mentioned above regarding the consumption of
concrete could be considerably underestimated as black market

Construction in Romania
2011

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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

Key competitors are CARPAT BETON / CARPAT AGREGATE


(www.heidelbergcement.ro), LAFARGE (www.lafarge.ro), HOLCIM
(www.holcim.ro),
READYMIX (www.readymix.ro), GENERAL BETON (www.generalbeton.ro),
INDAC INVESTMENT GROUP (www.indac.ro), ALAS (www.alas-romania.ro)
and GRANDEMAR (www.grandemar.ro)

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.

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23

Heterogeneo
us price
range

Concrete pricing depends on its composition, use and geographical


area, thus resulting in large price gaps between concrete products: from
40 to 150 EUR per m3. Areas of concentration for concrete consumption
are Timisoara, Arad and Oradea in the West of the country, Sibiu, Cluj
and Brasov in the Centre, Iasi and Constanta in the east and, of course,
Bucharest and its outskirts.
Prices for obtaining aggregates depend on the quarry exploitation fees
established by the National Agency for Mineral Resources. The fact that
most players on the market are captive (they act as aggregates
divisions delivering their products to mother companies concrete
stations, bitumen stations, construction companies) and that the
product range is rather various makes it difficult even for industry
experts to estimate an average price.

Construction in Romania
2011

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24

Wall building materials (WBM)


Wall building materials overview
Market size
and structure

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

market growth 2002


2009 2010 2011 2012*
2,200 2,100 1,950 1,900
1,850
1,250

1,800
1,200

1,750
1,150

1,750
1,150

5,300 5,100 4,850 4,800

Source: Previous research, desk research update, Marketscope estimates.

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%

Source: Previous research, desk research update, Marketscope estimates.

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

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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

As in case of any heavy product, distribution of wall building materials is


rather regional, imports representing a viable solution only for areas
near the borders or in case of high-volume importers (DIY / building
materials distribution chains or branches of international producers). In
2007-2008, around 10% of the AAC demand was covered through
imports, especially from neighbouring countries such as Hungary and
Bulgaria. However, some players complain that imports from countries
such as Serbia, Croatia, Bulgaria, Hungary or Turkey are not checked by
INCERC (the Romanian Building Research Institute) and they tend to be
of poor quality, hence a threat to building safety.
Imports for bricks accounted for 25-30% of market in years 2007-2008
but recent investments have lead for local production capacity to
exceed consumption with about 50%. However, imports still cover a part
of consumption, with distributors chasing lower prices at plants from
abroad, and local producers with factories abroad aiming for logistics
efficiency (importing from neighbouring countries in order to cover
some areas nearby the borders). The most important countries of origin
for bricks imports are Hungary, Croatia, Bulgaria and Serbia.

Construction in Romania
2011

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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

Source: Ministry of Finance


Note. MACON-SIMCORs turnover and profit represents the financial result of MACON SRL
the only company within the MACON-SIMCOR group with AAC production facilities.
Note. SOMACOs turnover and profit represents the financial result of SOMACO GRUP
PREFABRICATE
Note. PREFABRICATE VESTs turnover and profit represents the aggregated financial result

Construction in Romania
2011

www.marketscope.ro

27

of PREFABRICATE VEST holding (companies PREFABRICATE VEST, PREFABRICATE VEST DOI


and PREFABRICATE VEST PATRU).
Note. All companies turnover reflects all activities undertaken by each company, as
declared at the Ministry of Finance (not necessarily only AAC and / or bricks sales).

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

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29

AAC
consumption
more than
doubled in
the 20002008
timeframe

Source: Previous research, desk research update, Marketscope estimates.

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.

Top 8 AAC players

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)

Source: Previous research, desk research update, Marketscope estimates, Ministry of


Finance

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

ENTERPRISE INVESTORS, a Polish investment fund,


purchased MACON in 2006 for 35 million EUR; in 2008, the fund
also purchased the SIMCOR GROUP, for which it paid 53 million
EUR; in September 2009, the integration of the two companies
was completed, thus creating the largest AAC producer on the

www.marketscope.ro

30

market;

MACON SIMCOR

www.macon.ro

The group has 4 companies: MACON (produces AAC at


Deva and Oradea and other construction materials), SIMCOR VAR
(produces lime at Targu Jiu), SIMBETON (produces reinforced and
pre-stressed concrete elements) and SIMTERAC (produces tile at
Vadu Crisului);

Investments

no large investments are planned on medium term, but


previous investments 2.5 million EUR (2009), 7.5 million EUR
(2010) and 2.5 million EUR (2011) resulted in an increase in AAC
production capacity;

Capacity

PREFAB

www.prefab.ro

production capacity: AAC (715,000 m3 per year),


prefabricated concrete products (50,000 m3 per year), lime (380
tons per day);

Key issues
Romanian capital building materials producer; besides
AAC, it also produces prefabricated concrete products, aggregates
and PVC window systems;

the companys production facilities are situated in


Calarasi;

main focus on South-East region of the country

production grew to over 400 thou m3 of AAC in year


2011, but turnover decreased

Investments

Plans for investments in a cogeneration plant in


Romania and a new wall building material plant in Bulgaria or
Republic of Moldova.

Capacity

CELCO

www.celco.ro

production capacity : AAC (approx. 420,000 m3),


prefabricated concrete products (20,000 m3);

Key issues
Romanian capital company that produces AAC and dry
mortars at its Constanta plant, and lime at Corbu (Constanta
county);

the company underwent a restructuring program, all


activities unrelated to building materials having been passed to a
new company DD Group;

Investments

the company invested in a new special plant for AAC


adhesives (completed in 2007) and in a new lime plant (a 20
million EUR investment completed in 2008);

Capacity

Construction in Romania
2011

production capacity is 400,000 m3 per year for AAC and

www.marketscope.ro

31

a maximum of 500 tons per day for lime;


XELLA

www.ytong.ro

Key issues

XELLA

German group, entered the local market as importer


and started operations at a new production facility in Romania in
year 2009, in Paulesti (Prahova County);
prior to year 2009, the company had planned another
production facility and acquisitions of local producers, but due to
restraining market conditions, further investment activities have
been put on hold
in 2008, XELLA ROMANIA claimed to have sold 340,000
m3 of AAC (further to imports from their Bulgarian and Hungarian
production units);
XELLA plans to continue imports from Bulgaria or
Hungary for logistic efficiency and lower costs;
over 250 distribution points in Romania (including most
DIY store chains);

www.ytong.ro

Investments

Investments in the production facility sum up to about


32 million EUR.

Capacity
local production capacity is 400,000 m3 per year for

AAC;

SOCERAM

www.soceram.ro

in year 2011, the plant worked at about 60 - 65% of its


capacity, company officials hoping to reach full capacity in the
following years, depending on market demand;

Key issues
the company (controlled by METALEUROEST and ELSID
TITU Romanian shareholding) produces both AAC and bricks, dry
mortars, adhesives and metal profiles;

it has three production plants at Doicesti (Dambovita


county; AAC and bricks production units), Bucov (Prahova county;
AAC) and Urziceni (Ialomita county; bricks); the Bucov and
Urziceni plants are currently closed due to low demand and for
modernisation, as well;

another brick production unit (Tandarei plant, Ialomita


county) is intended to be sold, after the company also sold the
brick facilities in Bucov;

Investments
20 million EUR investment in new brick production line
completed at Doicesti;

ambitious investment plan worth 150 million EUR for


construction of nine new production units (seven AAC plants and
two brick plants) was put on hold due to difficult market
conditions; however, a 20 million EUR investment in an AAC plant
in Roman (Iasi County) is due to be completed in year 2013;

Capacity

Construction in Romania
2011

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32

ELPRECO

www.elpreco.ro

production capacity: AAC (360,000 m3 / year), bricks


(350,000 m3 / year);

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;

the company has two production units, in Craiova and


in Titu (Dambovita county), and produces AAC, dry mortars,
concrete roof tiles, pavers, prefabricated concrete products;

Investments

in year 2009, the company invested 5 million EUR in


modernisation and maintenance of current production lines;

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;

some speculation has been made regarding companys


buyout;

Investments

an investment program was started in 2007, with the


target of enhancing production capacity by 30% (to around
450,000 m3);

Capacity

SOMACO
GRUP
PREFABRICAT
E

www.somaco.ro

current AAC production capacity exceeds 330,000 m3


per year (no clear data on whether the aforementioned
investment has been completed or not);

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;

the company produces prefabricated concrete products


for civil or industrial use (especially poles, beams, tubes,
structural elements), for infrastructure (bridge elements, electric
poles), and AAC;

Investments

according to the companys investment program, 8-10


million EUR will be allocated in the next four years for technical
refurbishment, modernisation and equipment;

Capacity

Construction in Romania
2011

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33

production capacity per year: AAC (250,000 m3),


prefabricated concrete products (60,000 m3);

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

Source: Previous research, Marketscope estimates, desk research update

Construction in Romania
2011

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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)

Source: Previous research, desk research update, Marketscope estimates, Ministry of


Finance

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;

operates three production units: Gura Ocnitei in


Dambovita county (opened in 2004), Sibiu (acquired in 2004 and
refurbished through a 18 million EUR investment) and Tritenii de
Jos in Cluj county (a greenfield investment of 25 million EUR
finalised in 2008); WIENERBERGER also has the possibility of
supplementing its offer through imports from production units
abroad;

currently, two out of the three production units (Gura


Ocnitei and Tritenii de Jos) are shut down due to low demand;

approximate market share in year 2011 was 35%


(based on own estimates);

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;

in 2012, the company began set up of fourth plant, at


Razboieni (Iasi County)

Capacity

CERAMICA
IASI
www.ceramica-

Construction in Romania
2011

current overall capacity of all three plants is around


600,000 m3 annually;

Key issues

CERAMICA Iasi was bought in 2007 by the American


private equity fund ADVENT INTERNATIONAL for 22.3 million EUR;

www.marketscope.ro

35

iasi.ro

www.brikston.ro

company officials claim to have sold 373,000 m3 of


bricks in year 2011, increasing market share to about 20% (from
6% in year 2008);

distribution covers over 35 counties in Romania;

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;

the latter stage of the plan (the new production facility)


has been put on hold due to lack of financing;

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);

market share of around 12 - 13% in year 2011 (third


place on the local market, based on own estimates)

focuses on becoming the top bricks suppliers in


Transylvania region (by volume)

Investments

investments between 2007 and 2012 of about 28


million EUR, consisting in a new quarry and clay preparing line
(first stage), and a new bricks production line (second stage); the
third stage will enable the factory to work in three shifts;

Capacity

SICERAM

www.siceram.ro

current bricks production capacity (Recea plant) of


350,000 m3 per year (70% working capacity in year 2012);

Key issues
Romanian capital company that produces ceramic
bricks and roof tiles

abandoned the plan to invest 8 million EUR in a new


bricks production plant due to difficult market conditions;

Investments

a 16 million EUR investment was completed in 2008:


the construction of a ceramic roof tiles production facility;

Capacity

production capacity of 250,000 m3 per year for bricks


and 850,000 m2 per year for ceramic roof tiles;

Bricks and A AC - Product range, geographical coverage and

Construction in Romania
2011

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36

pricing
Large
vertically
perforated
bricks
(ceramic
blocks) have
become the
main brick
format

AAC and bricks are produced in various formats. The diversity of


products is more significant on the bricks market, as variations of AAC
are limited to around 5 main formats.
AAC format 60*20*25 cm appears to be the most common, accounting
more than a third of the market volume. Smaller formats with lower
width used for insulation (interior walls) have limited usage.
Vertically perforated bricks dominate bricks sales, while solid bricks are
currently seldom used, due to obvious disadvantages in terms of price
and work involved in usage.
However, bricks market structure is more fragmented in terms of used
formats, due to various technological endowments of the numerous
plants. The new investments are focused on production of cost-effective
large formats, but significant variations exist from one producer to
another.
The main brick format, marketed by many players and still popular in
the market, is GV 29*24*14 cm, accounting a fifth of the used
volumes. Other larger formats with significant sales have length around
3638 cm and variations of width and height.

Concentratio
n of wall
building
materials
sales

There is a concentration of bricks usage in the northern and western


part of the country, while AAC sales are higher in the south and east.
This is mainly generated by the geographical placement of production
plants, but in part is also caused by regional preferences of consumers /
users and place of residence (rural/urban).
Bucharest and its outskirts account roughly 15% of total AAC and bricks
volumes used in the Romanian market.

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

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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

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38

Steel
Iron and steel
foreign trade
and local
production

Source: Previous research, desk research update, Marketscope estimates

With demand on the local market strongly declining in year 2009,


exports became the sole chance of survival for major steel producers in
Romania. Economies still developing in spite of the crisis, such as Turkey
and some Asian countries kept the steel exports from Romania at a
reasonable level and prevented factories from operating massive
employee dismissals and restructuring.

Romania
remains a net
exporter of
raw steel

Source: EUROSTAT

Construction in Romania
2011

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39

Raw steel
consumption
estimation
and forecast

Based on available statistics and recent market updates of key


competitors and users, the overall steel consumption in Romania is
estimated at 3.5 4 million tons, with expectations of a slight upward
trend in the 2013 2015 timeframe. However, it is worth mentioning
that Romanian production of steel may follow more accurately the
trends in the foreign markets, rather than those of the local demand,
given the large volumes of exported steel.

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

Steel market in Romania is dominated by two groups: ARCELORMITTAL


and MECHEL.

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

The group operates 4 main factories in Romania through several


companies, including ARCELOR MITTAL GALATI (the main steel
factory, on the former SIDEX platform), AMC (construction
materials division that is briefly profiled in a further section of
this report), ARCELOR MITTAL TUBULAR PRODUCTS and ADMET.
Turnover of the Galati plant exceeded 1 billion EUR in year 2011,
but is still well below the peak level in year 2008 (around 2
billion EUR).
ARCELOR MITTAL has been one of the top 3 exporters from
Romania in pre-crisis years, but their position got weaker from
this point of view further to the effects of global decrease in steel
demand (the company remains within top 10 exporters, though).

The group operates 5 plants in Romania, namely MECHEL


Targoviste, MECHEL Campia Turzii, LAMINORUL Braila, DUCTIL
STEEL Buzau and DUCTIL STEEL Otelu Rosu.
Main products include steel and ferroalloys, wires and bars.
Revenues of main plant (in Targoviste) are estimated at over 200
million EUR in year 2012, diminishing by 15 20% as compared
to previous year.
There are recent rumours that Romanian operations are for sale,
in order for the group to be able to cover a part of the debt at
international level it is estimated that the four plants are worth
100 million EUR.

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40

Roofing solutions and structural elements


Roof tiles (metallic, ceramic, concrete, bituminous)
Market
overview

There are several roofing solutions used on the Romanian market:


metallic tiles and profiled sheets, concrete tiles, bituminous and
fibreglass shingles, roof ceramic tiles, corrugated bituminous roofing,
wood shingles and, to some extent, asphalt cardboard. Out of these
alternatives, metallic tiles, concrete tiles, ceramic tiles, bituminous
shingles and corrugated roofing are preferred.
The roofing market followed closely the dynamic of the overall
construction market, with significant growth during the 2004 - 2008
period and a slump in year 2009. In recent years, the market seems to
have remained at levels comparable to year 2009, with y-o-y variations
of -/+ 5 - 10%. The market registered somewhat different dynamics for
each component segments, with metallic tiles having the largest
growth, and is currently dominated by international players which chose
to make large investments in local production capacities during the
boom period, thus reducing imported quantities.

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

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41

Metallic tiles
hold the
highest share
in roof sales

Sales of main roofing solutions in Romania (million EUR)


Segments
2008
2010
2012*
Metallic tiles
89
57
61
Concrete tiles
27
13
13
Ceramic tiles
28
21
21
Bituminous shingles
9
4
4
Bituminous corrugated
25
16
11
roofing
TOTAL
177
111
110
Source: Previous research, desk research update, Marketscope estimates

The metallic tiles segment continues to clearly dominate the market,


with the ceramic and concrete tiles segments in second and third place
respectively. As compared to year 2008, the concrete tiles and
bituminous corrugated roofing segments lost market share to the
metallic tiles segment (which had 55% in year 2011), while the ceramic
tiles segment kept its market shares fairly at the same level (19%).
Competitive
environment

Metallic tiles

Local production is dominant, since international players switched to


operating own production facilities in Romania. There are approx. 60
tier 1 suppliers (including importers) on the roofing market and
although some of the segments are fragmented, in each there is a
group of large competitors holding the bulk of sales.
Key players: LINDAB (including ROVA), MEGAPROFIL, RUUKKI,
ARCELOR MITTAL CONSTRUCTION, COILPROFIL, VIKING PROFIL,
DEPACO, PLANNJA, FINAL DISTRIBUTION, ICOPAL, LIDER PLUS
This segment has been the most dynamic amongst the roofing
alternatives and is still expected to register large growth rates in the
post-crisis years (market potential still allows annual growth of 20-30%).
Investments in production facilities made this segment more
competitive, but also more fragmented (it is estimated that there are 30
players on the metallic tiles segment, with 4 - 5 covering half of the
demand). The most important players of this segment are local
subsidiaries of international players that chose to heavily invest in
production facilities in Romania so as to better cover local and regional

Construction in Romania
2011

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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

Key players: BRAMAC, ELPRECO, MACON, IMCOP


There are few specialised producers of concrete tiles, most of them
having as main products other cement-based construction materials
and prefabs. Local production facilities cover almost the entire demand
(imports account for a maximum of 10% of this segment, according to
recent estimations).

Roof ceramic
tiles

Key players: TONDACH, SICERAM, CARS TARNAVENI, CERAMICA


IASI
The ceramic tiles segment registered a comeback after the investments
made in new technology, which lead to less expensive and quality
competitive products. Consumption is still mostly covered through
imports (about two thirds of the total roof ceramic tiles consumption),
but the ratio is expected to somewhat balance itself in the following
years.

Bituminous
shingles and
corrugated
roofing

Key players: TEGOLA, IKO, ONDULINE, GUTTA, KERABIT,


KOVERTECH
There are no large local producers of bituminous shingles or corrugated
roofing solutions; therefore consumption is covered mostly by imports.

Financial results for the top players on the roofing


solutions market (million EUR)
Ruukki

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

Source: Ministry of Finance

Construction in Romania
2011

www.marketscope.ro

43

*According to the company

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

Subsidiary of the Finnish group RAUTARUUKKI, present in


Romania through three divisions Construction, Engineering and
Metals;
The company finished in 2008 a 35 million investment in a plant
at Bolintin-Deal (Giurgiu county) with three production facilities:
metallic roofing profiles, metallic structures, thermo-insulating
panels; the plants capacity is of 1.2 million linear metres of metallic
profiles and 1.8 million m2 of thermo-insulating panels;
In 2009, a part of the equipment from the groups production
facilities in Czech Republic and Hungary were relocated in the plant
at Bolintin-Deal
The companys offer includes metallic tiles and accessories,
water drainage systems, metal profiles for roof and wall cladding,
structural and faade casings, thermo-insulating panels (with
polyurethane, mineral wool or polystyrene insulation), metal
structures for industrial or road construction;
About 30% of production in 2011 was exported (mostly to
countries such as Lithuania, Czech Republic, Slovakia, Bulgaria,
Serbia, Hungary, Croatia; plus Saudi Arabia in 2012 );
Structure of sales on the local market for metallic tiles in 2011:
by destination - 80% for renovation projects; by price premium
products represented 22% of sales, while medium priced products
represented the bulk of the sales;
Own estimates report that the company increased its market
share in 2011;
Approximately 50% increase in turnover in 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;

Product range includes metallic tiles and roof accessories,


thermo-insulating panels (with polyurethane insulation), metal
profiles for roof and wall cladding, galvanised profiles;
The company is the local subsidiary of the homonymous Swedish
group and has two divisions Profiles and Ventilation plus
ASTRON BUILDINGS, a company that delivers metallic solutions for
industrial buildings;

LINDAB operates a production plant at Stefanestii de Jos (Ilfov


county); the plant can produce up to 3.5 million m 2 of metallic tiles,
3.2 million m2 of metal profiles, 1 million m2 of structural casings and
1 million linear meters of circular ventilation tubing per year;

The company also operates a plant at Floresti (Cluj county) with


0.8 million linear meters of circular ventilation tubing per year;

LINDAB bought in 2008 the SIPOG GROUP, a Slovakian producer


of roofing solutions and wall cladding products, for 24.5 million EUR;
the Romanian subsidiaries of SIPOG are represented by the
companies ROVA (with a roof system production plant at Sibiu) and
VIOS; in June 2009, ROVA undertook VIOS operations, followed in

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44

November by the decision of integrating ROVA within LINDABs


operations under a sole economical unit (the brands ROVA and VIOS
coexist with LINDABs);

The companys offer includes: metallic tiles and accessories,


water drainage systems, metal profiles for roof and wall cladding,
faade and structural casings, garage and industrial doors,
construction frames;

According to own estimations, the company has a 7.5% share in


the roofing solutions market and 14% share in the metallic tiles
market.
VIKING
PROFIL

www.vkp.ro

BRAMAC

COILPROFIL

TONDACH

ARCELOR

www.bramac.ro

www.coilprofil.ro

www.tondach.ro

Construction in Romania
2011

The company was founded in year 2005 as a local metallic tiles


producer and was bought in 2008 by the Polish group BLACHY
PRUSZYNSKI;
The international group invested more than 6 million EUR on the
local market (mostly for refurbishing or expanding production
facilities);
The company has production facilities at Filipestii de Padure
(Prahova county) and Craiova (Dolj county), but plans to expand its
production capacity;
Distribution network includes over 200 collaborators; most sales
are in the North-East, South and South-East regions of Romania;
Studies estimate the companys market share at around 10% for
the metallic tiles segment;
Approximately 45% increase in turnover in year 2011.

The local subsidiary of the Austrian roofing systems provider


(owned by LAFARGE and WIENERBERGER) entered the Romanian
market in 2004 through a greenfield investment at Sibiu, worth 5.8
million EUR; its current production capacity is of 13 million tiles per
year;

BRAMAC is the first roofing solution provider to introduce solar


panels systems on the Romanian market (imports from Austria);

the companys product range includes concrete tiles and


accessories, water drainage systems and solar panels;
The local subsidiary of the homonymous Belgian group,
COILPROFIL has a plant at Ceptura (Prahova county);

A 4 million EUR investment was completed in 2007, resulting in


new production capacities for thermo-insulating panels (with mineral
wool or polystyrene insulation) and faade casings;

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;

The current production capacity is of 12 million tiles per year; the


company supplements its stock from its Hungarian factories;

TONDACHs offer includes ceramic tiles and accessories;


The company is part of the ARCELOR MITTAL group and has three

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45

MITTAL
CONSTRUCTI
ON (AMC)

www.armat.ro
www.arvalconstruction.ro
www.arclad.ro

divisions ARMAT, ARCLAD and ARVAL; AMCs Romanian factories


also export their products on the Bulgarian and Ukrainian markets
(in 2009, the company exported in Bulgaria as much as 30% of its
production);

AMC finished in 2008 a 10 million EUR investment in a


production unit in Pantelimon (Ilfov county); the plants capacity is of
2 million m2 per year: metal roof systems, metallic frame structures,
thermo-insulating panels;

The company has made recent investments in increasing its own


production capacity: a new production units in Iasi and enhancement
of the Pantelimon plants capacity;

The companys offer includes metallic tiles and accessories,


water drainage systems, metal profiles for roof and wall cladding,
galvanised profiles, faade casings, thermo-insulating panels (with
polyurethane or mineral wool insulation), industrial construction
frames;

TEGOLA

Other players

www.tegola.ro

The company is the sales representative of TEGOLA CANADESE


(Italy);

TEGOLA imports on the Romanian market bituminous shingles


and accessories, bituminous shingles with photovoltaic cells,
corrugated plates, water drainage systems, plywood, OSB, HDPE
protective systems, hydro-insulating and thermo-insulating systems;
PLANNJA, a metal roofing solutions provider, started in year
2009 a 9 million EUR investment programme with a production
facility in Racaciuni (Bacau county); the facility is projected to have
three production lines: two for industrial metal sheet profiles and
one for metal roof tiles; other investment objectives are the
development of the companys logistic system and warehousing
capabilities;

DEPACO, initially a distributor of metallic roofing systems,


became a producer after a 2.6 million EUR investment in a
production plant at Baicoi (Prahova county); subsequent
investments were made in equipment and the development of the
companys sales network;

FINAL DISTRIBUTION is an importer of roofing solutions and a


leader on the stone coated steel roofing segment on the local
market; the company is an exclusive importer of the following
brands: Gerard (AHI ROOFING) stone coated steel roofing solutions,
Delta (DOERKEN) roof and foundation membrane, Keylite
(KEYSTONE GROUP) dormer windows; the company started
production of rainwater collection systems in 2008 and later, in
2012, of complete roofing solutions (metal tiles, drainage systems,
anti-condensation sheets) under the Novatik brand;

CERAMICA IASI (traditional wall building bricks producer)


abandoned ceramic tiles production starting with 2009 due to poor
results registered on the segment, but company officials declared in
2011 that they intend to resume production.

Structural elements
Market

Construction in Romania
2011

The market for structural elements consists of prefabricated concrete

www.marketscope.ro

46

overview

building components, structural metallic frames and cladding solutions.


These products are designed especially for commercial, industrial or
infrastructure construction and have the advantage of a quick
assemblage; this makes them an ideal construction solution considering
the conditions in the construction sector: the lack of qualified workers
and short deadlines made the demand for quick assembling building
products to grow considerably in recent years.

Source: Previous research, desk research update, Marketscope estimates

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

Top players: ASA CONS, ERGON CONCRETE INTERNATIONAL,


PREBET, MACON, PREFAB, ELPRECO
Most large players on this market are producers of cement-based
products, with other products as their core business for example, AAC
but there also are specialized producers (numerous companies, but
with small production capacities).
Powerful players in the contracting business took interest in this
segment (shown by important investments in local production facilities
made by large scale international players) as they believe the demand
for these products will grow exponentially: a tripling in consumption in

Construction in Romania
2011

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47

post-crisis years.
Metallic
building
components
and other

metallic structures LINDAB, ARCELORMITTAL CONSTRUCTION,


RUUKKI;
metal profiles MEGAPROFIL, LINDAB, ARCELOR MITTAL
CONSTRUCTION, RUUKKI, COILPROFIL, SOCERAM;
structural casings LINDAB, ARCELORMITTAL CONSTRUCTION,
RUUKKI;
thermo-insulating panels MEGAPROFIL, ARCELORMITTAL
CONSTRUCTION, RUUKKI, COILPROFIL, PLASTSISTEM;
Again, players on this segment have a diversified portfolio; however,
most of them are specialised in providing metal-based solutions for
construction (aside from structural elements and cladding solutions,
they offer metallic roofing solutions).
International players now dominate the structural elements segment:
after being present on the market as sales representatives for several
years, these companies decided to invest in local production facilities
due to the markets great potential. The metal-based construction
materials submarket will continue to grow (during economic stability in
post-crisis years, increases of 20-30% are expected by market players)
due to investments in commercial and industrial premises and growing
usage within residential developments.

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

the company is the Romanian subsidiary of the Hungarian


producer ASA KFT; the ASA group was bought in 2008 by the
Finnish group CONSOLIS, one of the largest players on the
prefabricated concrete building components market;
its production plant is situated in Turda (Cluj county) and has a
capacity of 39,500 m3 of prefabricated components per year;
the companys product offer includes pocket foundations, pillars,
beams, reinforced concrete floors, industrial floors;
turnover (2011): 12.7 million EUR;
the Romanian subsidiary of the homonymous Belgian company
(which is the prefabricated concrete products division of CRH
group) invested 15 million EUR in a production facility at Brazi
(Prahova county); the production facility was completed in 2007
and currently has a capacity of 120,000 m3 yearly
the company produces pocket foundations, pillars, beams,
reinforced concrete floors, hollow core slabs;
turnover for CRH STRUCTURAL CONCRETE (2011): 5.3
million EUR;

the company is part of the Romanian group TERAPLAST GP;

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48

ro

became a producer in 2007, when the first thermo-insulating


panels production line became operational at the companys
Saratel plant (Bistrita-Nasaud county);
the company produces thermo-insulating panels (with
polyurethane insulation), metallic construction frames, industrial
doors;
turnover (2011): 18.7 million EUR;

Thermo-insulating panels
Overview

These products are one of the most complex construction solutions


present on the market, as they fulfil multiple roles: cladding or roofing
solution, thermal insulation, fire proofing, etc. Thus, it is difficult to place
them in a specific market.
Thermo-insulating panels or sandwich panels as they are called
informally consist of two galvanized metal sheets with a thermal
insulating core (can be polystyrene, mineral wool or polyurethane). Due
to quickness in assembling, they are an ideal solution for wall or roof
covering of non-residential projects (logistic centres, industrial buildings,
retail centres) and because of their insulating qualities, they are also
used for refrigerating rooms (food industry).
This segment is one of the most dynamic segments of the construction
market in terms of local production development: in 2006 only 2 million
m2 were produced internally, while in 2007 the internal production
doubled. The market currently reaches a production of approximately
5.3 million m2 and a value of approximately 90 million EUR (expected to
increase to 110 million EUR in 2014). The share of imports has declined
significantly over the past years, from 50-60% in 2007 to about 18-25%
in 2011.

Construction in Romania
2011

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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

Tilling adhesives, polystyrene adhesives and grouts markets roughly


share the same competitors; however, this overlap does not apply to
assembly adhesives where companies active on the market form a
different set of players as compared to the other three products.
Competitor landscape for assembly adhesives mainly includes
construction chemical companies also producing PU foams and sealants,
as well as other putties or primers.
Tilling adhesives and grouts markets are established and mature, with a
number of 10 players accounting for approximately 70 - 80% of the
market and a myriad of other smaller producers sharing the rest.
Polystyrene adhesives market is still not consolidated and more
fragmented with stronger yearly growth in pre-crisis years (brought
about by mass usage of expanded polystyrene boards as a means to
insulate both new and old dwellings), that have drawn a considerable
number of new players. Key players on these markets include
multinationals like HENKEL or BAUMIT as well as local businesses as
ADEPLAST, BAUMIX, GABBRO or MGA.
Unlike tilling and polystyrene adhesives, where local production
accounts for the bulk of the market, assembly adhesives are supplied
almost exclusively from imports. Key brands present on this market are
BISON, DEN BRAVEN, CERESIT (HENKEL), SOUDAL, TYTAN (SELENA) etc.

Tiling adhesives market size in Romania (thou tonnes)


800
550

600
400

350

620

430

430

380

350

330

2010

2011

2012*

200
0
2005

2006

2007

2008

2009

Source: Previous research, desk research update, Marketscope estimates

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

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50

Polystyrene adhesives market size in Romania

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

Source: Previous research, desk research update, Marketscope estimates

Market volume for polystyrene adhesives reached an estimated 240,000


tons in year 2008 and is considered among the few building materials
that did not have a dramatic slide throughout the crisis period due to
the rehabilitation works for old blocks of flats and new projects in the
non-residential sector. In 2011, the market registered a slight increase,
reaching an estimated 240,000 tons, level similar to that in year 2008.

Assembly
adhesive is a
product with
limited
awareness
among
construction
workers, thus
the volumes
are still low

Assembly adhesives market size in Romania


(million EUR)

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

Source: Previous research, desk research update, Marketscope estimates

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

Adhesives market structure in Romania


in years 2010 - 2011, by origin
Tilling and polystyrene adhesives

Assembly adhesives

0%
Local production

Construction in Romania
2011

50%

100%

Imports

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51

Source: Previous research, desk research update, Marketscope estimates

Imports of tilling and polystyrene adhesives are rather limited. On the


assembly adhesives market on the other hand, imports account for
almost all volumes on the market (the only large local producer:
ANTICOROSIV, which produces for DEN BRAVEN that in turn imports
some volumes, too).

Standard
tilling
adhesives
hold the
greatest part
of the market
Competitor
landscape

As regards a breakdown of the tiling adhesives market by product type


(level of quality & usage), standard adhesives hold the largest share, as
price still has an important role in the decision making process amongst
consumers and construction companies. Although powder tiling
adhesives are most common, the supply on the Romanian market
includes also ready-mix adhesives, which do not require to be mixed
with water but to be applied as they are in the packaging (one of the
key suppliers for this type of product is DUNLOP ADHESIVES) - however,
consumption is still low for this special type of adhesives.
The competitor landscape on the cement-based adhesives market is
dominated by players with large production facilities in key geographical
areas and well developed distribution systems (e.g.: HENKEL, BAUMIT,
DURAZIV, ADEPLAST, WEBER, DEUTEK, BAUMIX etc.). Besides these
players, one can add a series of smaller players with smaller capacities,
which distribute their products at a regional/local level (e.g.: BAULINIE,
CAROCAZ, ECOMAT, HASIT etc.).
There are about 20 main competitors on the local cement-based
adhesives market. Although the market shrunk during crisis years, most
major players reported an increase in turnover and market share.

Tilling and
polystyrene
adhesives
markets are
competitive,
with 10
players
accounting
for most of
the sales

Turnover for keyplayers on the tilling and polystyrene adhesives


markets in years 2010 and 2011 (million EUR)
64
66.3

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

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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.

There are also some importers active in the cement-based building


adhesives (e.g.: ARDEX, DUNLOP ADHESIVES, MAPEI, etc.) of which a
notable is the one of MAPEI.
Top 4 companies on the tilling adhesives and polystyrene adhesives
segment appear to be: HENKEL (estimated market share: 30%),
ADEPLAST, BAUMIT and MGA.
Major companies active on the assembly adhesives market include:
HENKEL, TEMAD, DEN BRAVEN, ACCORDING GROUP, SELENA and
SOUDAL.
Turnover for key players* on the assembly adhesives
markets in years 2010 - 2011 (million EUR)
Den Braven

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

DEN BRAVEN is the only competitor operating a production facility on


the local market, for PU foam cartridges (most of the other products
seem to be still imported). As opposed to the other big players, TEMAD
and ACCORDING GROUP are not branches of international producers,
but they distribute powerful international brands (Bison, by TEMAD) or
private labels produced by foreign producers (Compakt, by ACCORDING
GROUP).
Please see below more detailed profiles of major players active on the
relevant markets:
Main players on the tilling / polystyrene adhesives market

HENKEL

www.ceresit.ro
www.ceresit.com

Construction in Romania
2011

Production capacity and locations: 450 500 thousand


tons/year (200,000 t Campia Turzii, Cluj county, 250,000 t
Bucharest)
Investments: plans to invest 10 million EUR in a third production
plant in Roznov, Neamt County which will have a 700 thousand
tons/year production capacity

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53

Other information: player on the markets for other construction


chemicals as well (importer of PU foams, sealants, assembly
adhesives, flooring and waterproofing solutions); very active in both
ATL and BTL promotional campaigns (discounts, etc.)

ADEPLAST
www.adeplast.ro

BAUMIT

www.baumit.com

Market
drivers

Construction in Romania
2011

Production capacity and locations: 700,000 tons/year for


adhesives and mortars (250,000 t Oradea plant; 450,000 t
Ploiesti plant); 220,000 tons for paints and decorative plasters
(Oradea) and 700 thousand cubic meters for polystyrene-EPS (in
Ploiesti)
Investments: plans to open a new production facility for adhesives
and mortars in Roman, Iasi County, with a capacity of 350,000 t /
year and a new polystyrene plant in Ploiesti.

Production capacity and locations: 650,000 tons/year (300,000 t


Teius plant, Alba County; 100,000 t Bucharest plant; 250.000 t
Bolintin Deal, Giurgiu county)
Other information: part of SCHMID INDUSTRIE HOLDING which
also controls AUSTROTHERM (producer of expanded polystyrene EPS boards)

Prices have grown in recent years (4-5% y-o-y growth) due to


increase in costs with raw materials and fuels.

Initial estimates showed a possible increase of the polystyrene


adhesives market with about 45 million EUR due to the old
dwelling rehabilitation programme implemented by the state.
However, due to slow pace of the programme (only a part of
apartment blocks have been rehabilitated), this particular
segment of the demand represented only 5% of the total
adhesives market in 2011 (and 15% of total consumption of
polystyrene adhesives for thermal insulation).

Individual rehabilitation projects (by housing / owners


associations) and new construction in the non-residential
segment (stadiums, stores, shopping centres etc.) seem to have
represented the bulk of the market in 2011 and 2012.

The use of expanded polystyrene boards in thermal insulation


systems is expected to continue its growth in the future.

Grouts market volume growth could suffer a setback due to new


trends of mounting tiles without joints; also, cement-based
grouts are gradually replaced by silicone joint fillers

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54

Construction in Romania
2011

Some competitors active on the assembly adhesives market


(e.g.: HENKEL, SOUDAL, ACCORDING GROUP) introduced new
types of polystyrene adhesives (e.g.: PU / acrylic-based) as an
alternative to cement-based.

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55

Insulating window and door systems


Profiles, float glass, carpentry, fittings, PU foams
Overview

70% of
market value
currently
generated by
rehabilitation
works

This section deals with two aspects of this complex sector:


The perspective of final carpentry works (production and mounting
systems)
The perspective of the elements the systems are made of: glass,
profiles, etc.
Sector turnover for the insulating window and door system carpentry /
works value increased strongly in pre-crisis years, from approximately 650
million EUR in 2006 to approximately 900 -1,000 million EUR in 2008.
In contrast to preceding years, market players and industry experts
estimate an approximately 30-50% decline in year 2009, followed by 10 30% y-o-y decline in the following years. The market is estimated at
around 300 - 500 million EUR in 2011.
Profiles, window fittings and glass markets seem to cover approximately
50% of the total value of the materials included in such carpentry works.
There are several types of companies involved in the thermal insulating
window and door system market:
suppliers of components (profiles, float glass, window fittings)
insulating glazing producers
producers of systems and assemblers (referred to as carpenters)
Among the last 2 categories of players, there are constant overlaps.
Most of the sector turnover seems to be generated by the rehabilitation of
existing dwelling stock. Insulating window and door systems market is
characterized by strong seasonality with a peak between September and
November.

Profiles for insulating windows and doors


Overview

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

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56

Market size &


growth

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

Source: Previous research, desk research update, Marketscope estimates

Increased
usage of
grade A
PVC profiles

Profiles market structure breakdown by materials indicates that


polyvinyl chloride (PVC) holds 70%, while aluminium profiles account for
20-25% out of the total market and are followed by wood and other
materials which account for 5-10% (including aluminium-PVC,
polypropylene etc.)
There has been an upward trend in the usage of higher-quality profiles.
Thus, apparently the most frequently used profile nowadays is the 5chamber PVC one with grade A (thickness of exterior walls of the profile
> 2.8 mm).
After strong increases in the early years of these systems in Romania,
imports started to lose part of their market share and now account for
less than 50% of the market. It is envisaged that their role will continue
to decline mainly because of production capacity enhancement
operated by local producers.
Germany is the main Western European exporter of PVC profiles to
Romania while Greece is the main aluminium profiles exporter to
Romania.
Wood profiles are usually high-end products due to high prices and lack
of technology for automated production lines.

Construction in Romania
2011

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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).

Brief profiles of major competitors


on the insulating profiles market1

GEALAN
www.gealan.ro

Turnover: 28.1 million EUR in year 2011; 36.4 million EUR


in year 2010
Production capacity: 18,000 tons/year in Bucharest plant
Sales: estimated market share in Romania - 30% of the
total market for profiles; the company also exports to
Bulgaria and the Republic of Moldova; client base 450
companies
Investments: investments in production capacity
expansion (from 18,000 tons to 35,000 tons per year) and
production facilities relocation were put on hold in 2008
Logistics: warehouses in Bacau, Craiova, Timisoara, Cluj
and Constanta were closed due to unfavourable market
conditions
Other information: 80% of sales are for the residential and
offices sectors, the rest being for administrative and logistic

With the exception of ALUMIL, all other companies presented below sell PVC profiles

Construction in Romania
2011

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59

buildings

Construction in Romania
2011

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60

REHAU
www.rehau.ro

TERAPLAST
www.teraplast.ro

ALUMIL
www.alumil.ro

PROFINE
www.trocal.ro

Construction in Romania
2011

Turnover: 45.2 million EUR in year 2007; 50.7 million EUR


in year 2010
Sales: approximately 2/3 of turnover is generated by sales
of profiles
Distribution: client base 300 companies; the company
has 5 sales offices across the country
Key accounts: APLAST (major producer of glazing and
carpentry systems based on PVC profiles)
Other information: produces PVC and PE pipes at its
facility located in Sibiu (plans to further invest in production
capacity development)

Turnover: 49.4 million EUR in year 2011; 50.5 million EUR


in year 2010
Sales: in recent years there was a shift from producing only
PVC profiles, to complete insulating windows (including
manufacture of glazing and carpentry); exports account for
approximately 7% of turnover and roughly half of all exports
are destined to Hungary;
Strategy: in 2009 the company invested in re-branding the
division producing thermal insulating window / door systems
brand name changed from Orizont to Teraglass; 1.2
million EUR were budgeted for the re-branding process; the
company aims at operating 40 Teraglass showrooms;
Investments: 1 million EUR investments in 2012 for
launching the production of a new profile system

Activity: aluminium extrusion (profiles, fittings, aluminium


panels etc.)
Turnover: 17.5 million EUR in year 2011 (2/3 of which was
generated by sales of aluminium profiles); 16.1 million EUR
in year 2010
Production capacity and locations: 3,000 tons/year for
aluminium profiles at Filipestii de Padure (Prahova county)
Logistics: over 20 warehouses in Romania; over 4,000
clients

Turnover: 7.3 million EUR in year 2011; 9.3 million EUR in


year 2010
Sales: profiles with 5 chambers account for the highest part
of sales
Distribution: client base over 120 companies
Brands: Trocal, Innonova, AluFusion, PremiLine, InnoSafe

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61

Float glass and insulated glazing


Overview

Float glass market volume dropped to 175,000 tons in year 2010


Low-emissive (low-e) glass has continuously increased its share
in the total market
Suppliers from China increased volumes exported to Romania in
the past 2-3 years

Market size &


growth

Market
volume: 120 170 thousand
tons in year
2012

Source: previous research, desk research update, Marketscope estimates

Float glass market volume reached an estimated 210,000 tons in year


2007 and 240,000 tons in year 2008. In year 2009, the market
registered a significant decline due to the slump in the construction
sector and adjacent markets (including insulating glazing, furniture &
sanitary ware, interior design - sectors which account for approximately
90% of total sales for float glass).

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

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2011

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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

As almost all insulated glazing units are manufactured using 4mm-thick


float glass and 70% of float glass is used in the aforementioned domain
one can assume that 4mm-thick glass is most widely used.

Source: Previous research, desk research update, Marketscope estimates

Increasing usage of glass in interior design has propelled demand for


tempered and laminated glass. As a result, some large float glass
distributors decided to invest in their own glass processing facilities
such as tempering furnaces (most tempering furnaces were supplied by
LISEC and GLASTON).
Competitor
landscape

Construction in Romania
2011

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63

66

Legend:

One major
local
producer,
with the
other global
brands
present via
importers

Local producers / Sales /representative offices of international


producers
Float glass
distributors
Distributors with facilities for insulated glazing
production

There are 2 local producers of float glass: SAINT-GOBAIN GLASS


ROMANIA (SGG) and GES GLASS. Sales / Representative offices of
international producers GUARDIAN and AGC FLAT GLASS (formerly
known as GLAVERBEL) are also present in Romania. These two
companies do not have logistic facilities in Romania and supply to the
Romanian market is handled by neighbouring subsidiaries or clients.
Distribution on the float glass market is made through large specialized
companies (e.g.: CRISTAL BRAD, DAFERMANN) and also through large
insulated glazing producers (e.g.: SPECTRUM INDUSTRIES, ALMAGLASS
etc.), which distribute to smaller producers that generally need less
than the minimum order that producers would supply (e.g.: one/two
truck load(s) etc.). Some producers of insulated glazing are also active
in the carpenters category (e.g.: LIPOPLAST, ALMAGLASS)
Major players on the float glass market

SAINT
GOBAIN
www.saint-gobainglass.com/ro

Turnover: 66 million EUR in year 2011 (approximately 50%


is estimated to represent sales in Romania, while the rest
are exports)
Production capacity and location: 240.000 tons/year at
Calarasi (Southern Romania) following a 130 million EUR

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2011

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64

investment started in year 2006, of which 30 million EUR in


the soft low-e production line (which has a yearly coating
capacity for 10 million m2)
Product range: clear, low-e, solar control float glass

GUARDIAN
www.guardian.com

Sales: own estimation on market share in year 2007 30%


- market leader; apparently, the company lost a significant
part of its share in favour of Saint-Gobain, once the factory
of the latter became functional in Romania
Other information: the company has a production line
with a capacity of 570 tons/day situated at Oroshaza,
Hungary, from where it supplies to neighbouring countries
both clear and low-e glass.
Other competitors on the float glass market are GES and AGC FLAT
GLASS
Major players active in float glass distribution act also as importers
(they distribute both glass produced locally by SGG, but also import
from other producers mentioned). Some of the most notable distributors
on the market are: CRISTAL BRAD, DAFERMANN, ISOPALROM, CAVALA
GLASS, DAKO DISTRIBUTION, METRATEK, VETCHIM etc.
Major companies active in the production of insulating glazing
units sector include: SPECTRUM INDUSTRIES, LIPOPLAST, OLIN, LUSTIC,
RO GRUP GLASS, DRALUC PROD, MONDOGLAS, VALRAS, STITERM, TGLASS, CYSTAR GLASS, AGOTHERM 93 etc.
Besides usage within manufacture of insulating glazing units, glass is
more and more used in interior design and glass furniture segments,
which require thicker tempered and/or laminated glass. DELTA GLASS,
PIETTA GLASS WORKING and GLASS EXPERT seem to be the largest
companies in this field of expertise.

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2011

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65

Thermal insulating carpentry works


Competitor
landscape

Competitors on the carpentry market can be divided into 3 major


categories:

Fragmented
market

large players that developed extensive distribution networks and


try to integrate as much of the manufacturing process as
possible and invest in brand development (e.g.: APLAST, CASA
NOASTRA); these companies have high-performance equipment
and also produce their own insulated glazing. Also, some of them
have decided to expand their outlet network through franchises
or other types of special partnerships
medium and small carpenters, which mostly activate regionally
or locally
very small companies which tend to have a very limited
coverage (part of a city at most) and produce in a rather DIY
manner

Small and very small companies used to generate a significant part of


the carpentry market value. However, crisis determined the number of
small and very small companies to dramatically decrease. Moreover,
with EU quality regulations into force since 2007 (regarding the
necessity for the final product to bear CE marking), small companies
preferred to give up glazing production and specialized in mounting
works exclusively.
Strong increase of the sector in pre-crisis years drove players to access
loans for equipment endowment and working capital. However, with the
sector severely affected by the economic crisis in the 2009 - 2011
period, numerous bankruptcies have occurred.
Major competitors on the insulating window and door carpentry market
include: APLAST, OPTIMEDIA, FAR-EST, CASA NOASTRA, QUASAR
INDUSTRIES, SEND 92, VIMAR IMPEX, BIG ALUMIUM, FINK FENSTER etc.

Fittings
General
information

Window and door fittings market value was estimated at around 80


million EUR in year 2008 and at 25 - 30 million EUR in year 2011.
Imports hold virtually all of the market and mainly originate from
Germany, Turkey and Austria.

Competitor
landscape

Major competitors on the fittings market


Company

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

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66

SCHURING ROM

Construction in Romania
2011

0.7

are generated by Maco fittings.


Official distributor of SCHURING
GERMANY.
SCHURING ROM is part of BRAUN
GROUP, which also comprises other
companies specialized in manufacture
of carpentry, insulated glazing, curtain
walls. Sells fittings and equipment for
carpentry production through a set of
distributors in key cities across the
country.

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67

PU foams
Overview

Competitor
landscape

Market size: estimated at 20 million EUR in 2008 and 7 - 9 million


EUR in 2010
Only one producer active on the market (rest of supply comes from
imports)
With the exception of DEN BRAVEN, all companies present on the
market are importers of PU foams. Previous studies on the market report
that DEN BRAVEN, HENKEL (CERESIT), TEMAD CO (Bison), SELENA
(Tytan) and PENOSIL cover approximately 80% of the volumes.
Major competitors on the PU foams market

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

Sells PU foams, sealants and assembly


adhesives, among other chemicals
Invested 7.5 million EUR in a production
line for PU foams close to Bucharest
Estimated production capacity of 10
million cartridges in year 2008
Exports represent about half the
companys sales
Turnover includes sales of all building
materials in companys portfolio (tilling /
polystyrene adhesives, waterproofing
solutions, flooring adhesives etc.)
PU foams and sealants generate
approximately 5 - 6 EUR in sales.
Company sells PU foams, sealants and
assembly adhesives under brand name
Tytan but also flooring adhesives under
brand name Artelit
60 - 70% of turnover is generated by
sales of PU foams
Markets Bison brand
The company distributes a wide range of
PU foams, sealants, adhesives and
various other construction chemicals and
accessories (cutting discs, abrasives,
protection equipment, etc.)
Launched own brand of PU foams (called
Rino) for mounting of thermal
insulating systems.
Company with headquarters in Estonia,
has subsidiaries in 22 countries.

Among other players on the market one can mention: ACCORDING


GROUP, SIKA and SOUDAL.

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2011

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Construction in Romania
2011

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69

Insulating materials
EPS, bituminous membranes and other thermal- & hydro-insulating materials
Market
overview

The insulation market is divided in four submarkets: thermal


(polystyrene and mineral wool are the most used materials), hydro,
acoustic and fireproof insulation. The products offered on this market
often have multiple insulation properties; therefore there might be
overlaps between those submarkets. Moreover, the companies active on
the insulation materials market tend to diversify their portfolio (several
insulation solutions) or offer complete insulation systems (a product
package based on more insulation products).

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

In this respect, a governmental program has been initiated in 2002


rehabilitation of the national dwelling stock through which the cost of
insulating old buildings was state-subsidized by two thirds of the total
value. The program had enjoyed little success mainly because of red
tape. However, new regulations providing standard projects for various
types of blocks of flats and financing through European Funds reduced
both time and money needed for applications to the program. In
Romania, there are approximately 80,000 blocks of flats (among which
50-60 thousand need to be thermally rehabilitated), of which only
around 1,000 2,000 have been rehabilitated through this program.
Therefore, the thermal refurbishment of old buildings represents a key
driver for the insulation market.

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

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2011

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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

The market for thermo-insulating products has registered a spectacular


evolution in pre-crisis years: in 2003 the consumption rate was of 1m3
per 50 persons, while in 2008 it reached an outstanding 1 m 3 per 6
persons. However, there is still place for improvement, as Romanian
consumption is still inferior to developed EU countries.
The high growth rates of the market during the 2004 - 2008 period and
the relatively small investments needed to start production determined
a high number of players to invest in local production facilities or to
import thermo-insulating products. Currently there are about 60
producers of EPS in Romania, with a cumulated production capacity per
year of over 9 million m3 (greatly exceeding local demand).
On the mineral wool segment there are currently only two local
producers, most quantities being imported.

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.

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71

Economic
crisis helped
the market to
reach
maturity

Players active on the local market of thermo-insulating products declare


that the economic crisis determined an early maturing of the market,
especially the polystyrene submarket. Considering that the polystyrene
production recipe is unique (and therefore there is little difference
between production costs 10% at most), small producers (no name)
exited the market, not being able to withstand larger competitors that
offer, besides the product itself, service packages or those who have
better logistics.

Major players

Although there are numerous players on the polystyrene segment, the


market is rather concentrated, the top five players accounting for more
than three quarters of the existing polystyrene production capacities in
Romania. In contrast, on the mineral wool submarket (with only two
large producers: ISOVER SAINT-GOBAIN and GECSAT) and on the
bituminous membranes submarket, the number of players is rather
small and local production is not sufficient to cover internal demand.
Financial results for the key players on the
insulation market (million EUR)

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

Source: Ministry of Finance


Notes: ISOVER turnover and profit represents official financial data for SAINT-GOBAIN
CONSTRUCTION PRODUCTS ROMANIA which activates in several segments: insulation
materials, plasterboards, adhesives, pipes etc. ADEPLAST turnover and profit are official
financial data for the whole company (activates in multiple sectors)

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

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2011

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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;

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2011

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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

URSA local subsidiary of Spanish group URALITA; one of


the main importers of mineral wool on the local market;
KNAUF INSULATION local subsidiary of KNAUF Group;
one of the main importers of mineral wool on the local market;

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74

Product uses

Construction in Romania
2011

ROCKWOOL one of the main importers of mineral wool


on the local market;
AMVIC has invested about 7 million EUR in a thermoinsulating casings production facility situated in Bragadiru (Ilfov
county);
GECSAT invested 8 million EUR in a glass wool production
facility in Tarnaveni (Mures county), with a total capacity of 7,000
tons per year;
IZOMAT SIMLEU SILVANIEI (Salaj county) has a
production capacity of 16,000 tones per year for basaltic mineral
wool and a production capacity of 5 million m2 per year of part of
bituminous membranes;
GENERAL MEMBRANE, part of EDIL GROUP, invested
approximately 11 million EUR in a new production plant in Buzau
for bituminous membranes, with a production capacity of
approximately 12 million m2 per year.

Although these products are somewhat substitutable, they are preferred


for some type of insulation:
expanded polystyrene has thermal and acoustic insulating
properties and is used for plastered facades, ventilated facades,
exterior and interior walls, non-circulated, low traffic or intense
traffic terraces, heated floors, refrigerating rooms, sloping roofs,
wood-structured floors;
extruded polystyrene is used for the thermal insulation of
foundations and basement walls, interior/exterior
heated/unheated floors, new or renovated buildings facades,
roofs and terraces, pillars, beams, refrigerating rooms;
glass mineral wool is used for thermal insulation and
soundproofing of attics, exterior walls, intermediate floors,
gypsum-cardboard walls, metal profile building systems or
industrial equipments;
basaltic mineral wool is an excellent thermal insulating material,
also with fireproofing and soundproofing qualities, used for:
buildings (outside and inside walls, bridging, attics, and
terraces), industrial buildings made of reinforced concrete or
metal, refrigerating units, vehicles, ships and pipes;
bituminous membranes are used for hydro insulating of
foundations, roofs, terraces, garden roofs, inversed or curved
roofs, metal floors, parking, street passages, basements, bridges,
viaducts, drains, galleries and tunnels, irrigation canals, tanks,
swimming pools and dykes.

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75

Paints, decorative plasters and other wall finishing solutions


Paints 1
Overview

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).

Market value in years 2008-2012 (million EUR)

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*

growth rate (%)

Source: Previous research, desk research update, Marketscope estimates


1

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

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76

The dynamic of the market in volume terms is slightly more volatile: it


seems sales tend to adjust during lower demand periods through
reducing output rather than prices and thus evolution rates have higher
values in case of market volume than for value.
Local
production
capacity
exceeds
demand by
more than 4
times

The bad year in construction sector (both in new construction segment


and in the renovations segment) resulted in a decrease of local
production in year 2009; not only the market had difficulties in absorbing
projected production as it did in the previous years, but some producers
(especially those with smaller capacity / output) were greatly affected by
an increasing exchange rate of the RON (which meant higher costs for
raw materials, which are all imported) and delays in receiving due
payments (considering that some distributors had major financial
problems or even went bankrupt).
The market also performed poorly during the following years, many
companies in the sector still being in risk of insolvency in year 2012.
Currently, the cumulated production capacities of local producers of
paints are estimated at around 700 thousand tons, while actual
consumption in year 2011 was estimated at less than 150 thousand tons.

Market
structure

Local
production
exceeds
imports

Wall
decorative
paints
dominate the
market

Further to a solid development of local producers in 2004-2008 period,


imports of paints and varnishes have diminished their role in the
Romanian market. Currently, it appears local production holds about 7080% of total volumes, with this share even higher in case of decorative
paints1. Imports share is larger in value (as imported paints are more
expensive, especially in the industrial segment, which represents the
bulk of the imported quantities). On the other hand, exports seem to be
on an upward trend as the local market is characterized by overcapacity.

The main structural change that occurred in the paints market in


Romania is the shift towards decorative paints, which gradually occurred
during the past 10 15 years. After the industrial paints segment was
dominant in early 1990s, the transformations in the Romanian economy
(affecting the industrial profile of the country, peoples purchasing power,
entrepreneurship initiatives, etc.) encouraged the development of new
modern paints production plants focused more on wall finishing than the
traditional producers.
At present, the decorative paints segment is estimated to hold at least
two thirds of the market value.

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

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77

Trend towards decorative segment growth

100%

50%

0%
1990s

Industrial

Decorative

2010s

Source: Previous research, desk research update, Marketscope estimates

Other trends
regarding
market
structure

The following trends on market structure are rough estimations, based on


figures quoted by industry participants:

The bulk of the volumes (70-80%) get to the end-users (including


both people and companies using the products) by retail channels
(which is usual for end-users represented by people, but not
efficient in terms of sales to construction companies, rehabilitation
teams of professionals, etc). However, it appears that B2B sales are
more and more significant, sustained by efforts of special B2B sales
units set up by market competitors.
Washable wall paint appears to be the type of decorative paint
with the largest share of the market (according to some market
players, this share is approximately 75%, out of the decorative
segment).

As regards the structure by sales channels, the aforementioned


statement is supported by the fact that modern retail plays a major role.
Thus, it appears that distribution of products is generally made through
DIY chains (DEDEMAN, PRAKTIKER, AMBIENT, BRICOSTORE, HORNBACH,
MR. BRICOLAGE, etc.), large building materials distributors (such as
ARABESQUE, BADUC etc.), but also through smaller building materials
distributors especially in the case of low-cost producers. In addition,
some major players developed their own network of showrooms, which,
besides promoting products, also act as distribution points.

Competitor
landscape

There are over 200 tier 1 suppliers on the local paint market, which can
be split within three major categories:

major local producers (which hold up to 70 - 75% of the market):


POLICOLOR, FABRYO, DEUTEK, KOBER, ATLAS CORPORATION, DAW
BENTA, AZUR, SARCOM;

smaller local producer: CHIMTITAN, NATIONAL PAINTS FACTORIES


(former SAYEGH), VADOVA, SPECTRAL, etc.;

Construction in Romania
2011

local sales offices / branches / representatives of international


players on the paint market (BASF COATINGS, AKZO NOBEL,
TIKKURILLA, etc.) and other importers (in total, about 90

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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

Source: Ministry of Finance

Brief profiles of the major players active on the market are outlined
below:
Key issues

KOBER

www.kober.ro

Construction in Romania
2011

The only large player on the paints market with


Romanian ownership;
The company has two business units: Decorative
(with Zertifikat as its main brand) and Industrial Paints (with
four divisions industrial and marine paints, powder paints,
automotive paints and wood protection products);
Has 2 production facilities, in Neamt county: in
Turturesti (50,000 tons per year production capacity) and in
Savinesti (with a production capacity of 120,000 tons per year);

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79

The companys focus will be ecological products (waterbased paints);

Key brands
Zertifikat, Pitura, Acrilux, Aqualux, Neocar, Duracril

FABRYO

www.fabryo.com

Key issues

The company is controlled by ORESA VENTURE, a


Swedish investment fund;
Underwent a portfolio restructuring, giving up upon 400
adjacent or unprofitable products; now paints, varnishes and
plasters account for 94% of the companys turnover;
ATLAS and FABRYO plan to unite their operations under
a new group holding the two companies ATLAS PAINTS and
FABRYO CORPORATION
Invested approximately 1 million EUR in 2009 in
promotional campaigns to sustain the most important brand
Savana and promote the newest Innenweiss;
Concluded in 2007 a 15 million EUR investment in a
production unit at Popesti Leordeni (Ilfov county), with a capacity
of 250 tons per day; planned investments include a powder paint
production facility for the industrial segment;
Established a B2B department in order to increase
direct sales to contractors and to real-estate developers;

Key brands
Savana (premium), Innenweiss and Rost (mainstream)

POLICOLOR

www.policolor.ro

Key issues

The company, which is controlled by two investment


funds RECONSTRUCTION CAPITAL 2 and ROMANIAN INVESTMENT
FUND, reorganised its activity in 2009, thus creating six divisions:
Architectural, Automotive, Resins, Industrial Coatings, Special
Chemicals and Thermo Insulation; moreover, the company
renounced at 20% of its portfolio, as part of the same
restructuring process;
Most of its production was relocated within Bulgarian
subsidiary, ORGACHIM (only industrial and auto paints are still
produced in Bucharest); the restructuring process will continue
with the relocation of the entire paints production in Bulgaria;
Completed a 5 million EUR investment in a polystyrene
production unit in Bucharest and an adhesives and putty
production facility in Bulgaria;

Key brands
Spor, Iris Creative Effect, Deko Professional, Klar,

Duralchid

DEUTEK

www.deutek.ro

Construction in Romania
2011

Key issues

The company is owned by ADVENT INTERNATIONAL, an

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80

American investment fund;


Underwent a re-branding process, relinquishing the
Dufa brand, property of the German group MEFFERT (the former
owner of the company);
Acquired in 2008, for approximately 23 million EUR, two
adhesives and mortars producers: BENGOSS COMIMPEX
(production unit at Capusul Mare, Cluj county, 250,000 tons per
year capacity) and SCAN (production unit at Fundulea, Calarasi
county, 10,000 tons per year capacity); both companies produce
the Bauleiter brand;
Investments are directed towards marketing the
companys brands Oskar, SuperWeiss, Danke! so that to
compensate relinquishing the high awareness Dufa brand;
The paints portfolio comprises about 90% ecological
water-based products;

Key brands

ATLAS
CORPORATIO
N

Danke!, SuperWeiss, Deutek Profi, Oskar, Bauleiter


(adhesives & mortars)

Key issues

www.apla.ro

The company has Greek shareholders and is structured


into three divisions: construction materials, logistics, and
electronic equipment distribution;
The company plans to separate the construction
materials division into a separate entity, ATLAS PAINTS, structured
into four divisions: paints and varnishes, adhesives, insulating
products and sealing products;
ATLAS and FABRYO plan to merge and thus unite their
building and finishing materials operations;
Production capacity (Tunari facility, Ilfov county):
50,000 tons per year for paints and plasters and 150,000 m for
expanded polystyrene boards;
B2C distribution channels account for 80% of Apla
products sales;

Key brands

Construction in Romania
2011

Apla (Atlas Professional Line Applications)

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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.

Significant growth for upper-mainstream and premium products


(as compared to previous low levels of these segments).
Increase in sales made through B2B channels.

Local producers increased exports during the market decline


period.

Market potential for paints remains high despite current downturn


of the construction sector (due to products importance within
rehabilitation works).

Decorative plasters
Overview

This section refers only to wet / ready-mixed decorative plasters


used for facades.
The largest players active on the decorative plasters segment are
general paints producers; however, some players active on the wall
finishing building materials market (e.g. building adhesives and dry
mortars, flooring, etc.) are also involved on this segment (e.g. BAUMIT,
HENKEL).
Decorative plasters sold on the Romanian market include siliconebased, silicate-based, silicone-silicate-based, acrylic-based and mineral
decorative plasters.

Market size
Estimated
market
volume at
around 18 20 thousand
tons in 2011

Construction in Romania
2011

Estimated market volume for decorative plasters decreased from about


25 thousand tons in year 2008 to about 18 - 20 thousand tons in 2011.
The product is considered in its early stages of development in Romania
(with 40 50% volume growth pace in each of the years 2005, 2006 and
2007) and demand is still much below the real potential. Thus, it is
expected that the decorative plasters segment performs slightly better
than the paints market.

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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).

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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

Three production facilities in


Bucharest, Teius (Alba county) and
Bolintin Deal (Giurgiu). The plant in
Bucharest produces paints and
decorative plasters and has a yearly
production capacity of 12,000 tons.
Among top producers of finishing
materials in the construction sector
(building adhesives, sealants, etc.)
The building adhesives and
mortars producer from Oradea (Bihor
county) completed in 2008 a
production line for paints, decorative
plasters and ready-mix adhesives,
with a total production capacity of
80,000 tons per year.

Key brands
Nano

por

Open

Ceres

it

Deco
Plast

Major paints and decorative plasters players started to sell /


produce polystyrene adhesive and in some cases even expanded
polystyrene boards in order to supply customers with a complete
faade thermal insulating system (and thus increase sales
opportunities for decorative plasters, too).

Growth of disposable income per capita in Romania (up until


2009) led to increased preference for specialized and more stylish
solutions for facades, such as decorative plasters, and also
gradually towards high-quality products.

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84

Painters fillings and plasterboards


Overview

Strong yearly increases on the plasterboard market in pre-crisis years


starting with 2005, with a structural change in the market from
imports to local production. Plasterboard market is dominated by
three players.
Painters fillings market appears to be dominated by players active
on the building adhesive market such as HENKEL, MGA, ATLAS
CORPORATION, GABBRO, and ADEPLAST. Painters fillings market is
more fragmented as compared to plasterboard.
In recent years, there has been a shift from usage of painters fillings
to plasterboards (for wall finishing works) as workforce crisis and the
fast pace of construction works increased the need for more
productive solutions.

Market size &


growth

In terms of volume, local players estimate the plasterboard market in


2008 at around 70-75 million m2 and approximately 40-42 million m2 in
2012. Slight increases are envisaged for years 2013 2015.
Market volume for painters fillings increased significantly in pre-crisis
years, but registered a slightly more pronounced decline in the following
years than the general construction market. Players estimate that the
local market contracted with about 15% in year 2011 vs. 2010 and
forecasts for 2012 and 2013 are rather pessimistic.

Market
structure

Imports of plasterboards began to lose their share in consumption after


investments in local production facilities were undertaken within the
2005-2008 period. Currently, it is estimated that local production covers
over 50% of the local market demand, with the exceeding production
being exported.
Apparently, the largest share of the market value for plasterboards is
held by the commercial segment followed by the industrial / logistic
sectors and by the offices segment. The residential segment is in its
developing stage with strong growth expected to occur on this
particular segment. However, there some players opining that all
aforementioned segments hold fairly similar shares in plasterboards
usage.
Market breakdown by product type reveals that the 9.5 mm-thick
plasterboard has significantly lost market share in favour of thicker
boards (especially 12.5 mm). Also, special plasterboards such as fireresistant or waterproofed become increasingly popular.
As regards painters filling, local production is dominant (imports are
inconsequential).

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).

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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

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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

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87

PAINTERS FILLINGS
More
fragmented
competitor
landscape

Painters fillings market appears to be much more fragmented, as it


mainly comprises both companies active on the plasterboard market
and by a series of players which are active on the building adhesive
market as well (e.g.: HENKEL, MGA, GABBRO, ADEPLAST, etc.).

Market
drivers

One of the driving factors behind the rapid expansion of plasterboard


system as a way of finishing works were the increasing costs of
skilled labour in the construction sector which meant more efficient
solutions were required (factor in favour of plasterboards).
On the other hand, lack of professional plasterboard mounters
impedes market development as poor-quality of construction works is in
some cases wrongfully associated to the technical performance of the
product.
Some market players suggest there are few quarries having good
quality gypsum and therefore access to quality raw materials is
difficult. One solution to access more easily raw materials would be
setting up more desulphurization facilities at large power plants in order
to obtain synthetic gypsum.

Construction in Romania
2011

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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)

Flooring products market has registered a significant drop in year 2009


(approximately minus 30%), as both new building construction and
refurbishments (the latter accounting for a large share of flooring
materials consumption in Romania, especially in the residential segment)
were hindered by the financial blockage. The overall market continued to
drop each of the next years, to the levels shown above. Parquet is the only
segment that seems to have got back on a slight upward trend.

Ceramic tiles (for floor and wall)


Although the chapter analyzes flooring solutions, wall ceramic tiles (faience) are included in the overall category, as ceramic
products for floors and walls are usually treated as a whole by market participants

Market size,
structure and

Construction in Romania
2011

Imports continue to dominate the market, the only local producer


amounting for roughly 20% of market volume in year 2008 (main countries

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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.

Source: Previous research, desk research update, Marketscope estimates

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

market in Romania (turnover in million EUR)


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

* Specialized = ceramic floor tiles is the key product within portfolio


Source: Ministry of finance. Note: Lasselsbergers turnover refers only to the companies
producing / selling ceramic tiles (the Austrian group also operates other business in Romania)

Wall-to-wall carpet
Market size,
structure and
trends

The wall-to-wall carpet market size in Romania reached a maximum 10


million sqm in year 2008, following a period of 3 - 4 years of sustained
growth.
After the renovations of old dwellings had determined for a long time the
supremacy of cheap residential wall-to-wall carpet in the market, the real
estate boom (and especially the dynamics in the office building and
HORECA segments) has drawn an increasing demand for higher quality
products used within non-residential buildings, including professional wallto-wall carpet tiles, as shown in the chart below.
In the 2009-2011 period, the market had a 15-20% decline, year-on-year.
Wall-to-wall carpet market size & structure by usage,
2

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

Source: Previous research, desk research update, Marketscope estimates

Market almost
entirely covered
by imports

Construction in Romania
2011

Imports from countries like Belgium, Turkey, Germany, Netherlands etc.


represent the bulk of the market, as the few local carpet & textiles
producers that have wall-to-wall carpet in their portfolios appear to have

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91

only limited and occasional involvement in the wall-to-wall carpet


segment.
As regards markets structure by product quality, the mainstream segment
holds half of the volumes, while economy / budget segment accounts for
40 45%.
Competitive
environment

Wall-to-wall carpet supply in Romania is rather concentrated, 4 major


players holding 50 55% of market volume, but can also be considered
fragmented as the rest is split between tens of players. In year 2012
PIRITEX and PROGES, two of the main players on the market, entered
insolvency, both companies currently making efforts to avoid bankruptcy.
If either player would exit the market, supply would become even more
fragmented.
Top importers-distributors of wall-to-wall carpet usually are general
suppliers of warm flooring solutions (also including parquet, carpets,
PVC) and have a powerful retail coverage (however, some of them are
more focused on B2B sales). PIRITEX has been the wall-to-wall carpet
market leader in the late 2010s and one of the major retail chains in the
finishing materials sector (their focus is still flooring, although product
range has been diversified lately).

Top players on the wall-to-wall carpet market in Romania

2 out of 4 major
players in
insolvency in year
2012

(turnover in million EUR)


33,4

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

Source: Ministry of finance


Note: Piritex and Proges have 50+ outlets and turnover includes sales of a various product
range (with wall-to-wall carpet accounting 10 20% of turnover), while for the other two
companies, wall-to-wall carpet holds a more significant share within total turnover.

Other noticeable players include DIEGO (powerful outlet chain


concentrated in the Western, Northern and Central regions of Romania),
ROMEST DCOR, PROMOTEX, EPA FLOOR, CONSTRUMA and SONERG.
Key brands present on the Romanian wall-to-wall carpet market are:
from Belgium: Domo, Balta, ITC, Ralux, Associated Weavers
from Netherlands: PVH, Desso, Lano, Interface Heuga
from Germany: Vorwerk, Nordpfeil, Halbmond
from UK: Burmatex, Ryalux
from France: Enia-Tarkett

Parquet and other flooring solutions & finishing products

Construction in Romania
2011

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92

Laminated floor
solutions
dominate parquet
segment

Although producers of massive wood (solid) parquet do no consider that


laminated flooring is part of the parquet market, this cost-effective
solution is still preferred in Romania due to the low budget required.
Laminated flooring is estimated at about 13 million sqm in year 2011
(approximately 30% decline compared to year 2009). Players on the
market report that massive wood parquet declined by 10-20% in year
2010 as compared to year 2009, while laminated flooring remained at
similar levels in the same time frame.
Laminated flooring is estimated to hold approximately 80% of the total
parquet market. Although the share of this product is expected to slightly
diminish, the income of the average Romanian is still too low for massive
wood to become the number one choice in the residential segment. Total
parquet market in 2011 is estimated at 15-17 sqm (mostly imports).
Production of parquet seems to be fragmented in Romania as no local
producer seems to have production lines for laminated flooring. Main
players in the local parquet industry, besides the major importers and
retail groups already mentioned within wall-to-wall carpets and ceramic
tiles markets, are KRONOSPAN (importer of parquet, even though it has
woodworking facilities in Romania in Brasov and Sebes, Alba County),
EGGER (production facilities in Radauti, Suceava County) and BARLINEK
(production facilities in Bacau).
The following table outlines advantages and disadvantages of flooring
solutions on residential and non-residential segments, as perceived by
market players and Romanian customers:

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

This segment has witnessed some recent developments due to


implementation in Romania of EU hygiene regulations concerning health
and food industry spaces. However, it still has the characteristics of a nonmature market, such as few suppliers, low awareness within target
industry sectors and mounting services of below average quality.

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

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Construction in Romania
2011

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94

Construction equipment
Heavy construction equipment
Overview

Market size

The market is recovering after the financial crisis (70% increase


in 2011 after a minimum reached in 2009-2010 period)
2-3 large players dominate the market
An important part of equipment sold is represented by secondhand units (although the share of such sales is decreasing)
Backhoe loaders hold the largest share in the construction
equipment market, by product type.

Heavy construction equipment market value was estimated in year


2008 at over 400 million EUR, up by approximately 10% from 360
million EUR in year 2007. Market value in year 2007 grew by 70% as
compared to year 2006, further to impressive performance in the
construction works sector.
Initial estimates on the heavy construction equipment market for year
2008 forecasted a growth rate of approximately 30%. However, after a
growth of approximately 30% in the first 9 months of year 2008, sales
dropped in Q4 despite expectations, which cut yearly growth rate for
2008 from 30% to around 10%.
In year 2008, approximately 3,300 units of relevant products were sold
on the Romanian market, of which 2,400 units of primary equipment
(e.g.: excavators, loaders, backhoe loaders, compact equipment etc.)
and 900 units of secondary equipment (e.g.: cranes - including auto -,
road building machinery).
Year 2009 brought a slump in sales by approximately 75% in volume
terms (780 units in 2009 vs. 3,300 units in 2008), which reduced the
market below the year 2006 level. In year 2010 volumes continued the
decline, reaching approximately 675 units (13% decline as compared to
the previous year).
Year 2011 brought a significant recovery of the market due to
resumption of large projects such as commercial centres or sports
centres. The increase was of approximately 75%, reaching 1,200 units.
By value, the market was estimated to about 80-100 million EUR in
2011. Players consider that current number of units sold approaches the
normal absorption power of local market.
Sold number of units during the first semester of 2012 was about 475490 units, registering a slight decrease compared to the similar time
frame of the previous year (487 units sold in the first semester of year
2011). Players on the market expect a slight increase in sales in the
following period.

Market

Construction in Romania
2011

Out of approximately 1,200 units sold in 2011, approximately 866 units

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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

There is only one local producer of primary equipment (PROMEX which


produces among other, excavators and compactors however,
apparently with no major role in the market) and one producer of
secondary equipment (UMT which produces auto/mobile cranes and
forklift trucks besides mining equipment and other special cranes), while
all other competitors are importers. The main players on the heavy
construction equipment market in Romania are members of ADUC
(Association of Distributors of Heavy Construction Equipment).
Apparently, largest players on the market are BERGERAT-MONNOYEUR,
MARCOM and TERRA ROMANIA.

www.bm-cat.ro

MARCOM
RMC 94
www.marcom.ro

Construction in Romania
2011

Exclusive dealer of the Caterpillar brand. The companys


headquarters are situated in Mogosoaia (Ilfov county), but it also
has local offices and/or service facilities in Bucharest, Timisoara,
Cluj, Brasov, Galati and Constanta.
Sells an extensive range of Caterpillar construction, industrial
and quarry equipment, new or second-hand, and fixed or mobile
braking and sorting equipment from METSO Minerals.
The company offers the possibility to rent machines and
equipment; it also offers after sales support (maintenance and
repair of equipment) and financing solutions for acquiring
equipment.
Turnover 2011: 38.1 million EUR
Sole distributor of Komatsu (Japanese producer of construction
and mining equipment) in Romania; the company also distributes
other brands such as Potain (cranes), Grove (autocranes), Sandvik

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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

Other major players on the market are:

CASE UTILAJE CONSTRUCTII: authorised reseller of CASE


construction equipment and brands such as Cesab, Furukawa,
Dumec, Officine Meccaniche, JMBH etc.

GLENCO 93: distributor for PUTZMEISTER, LIEBHERR, ATLAS


COPCO, GEHL, BOMAG etc.

IRCAT-CO: distributes a wide range of construction and quarry


equipment, main brands distributed are Doosan, Bobcat, ABG-Volvo
and Hartl Powercrusher

KREIS CONSTRUCT: distributes SCHWING STETTER equipment


used for concrete production / laying

LIEBHERR ROMANIA: local subsidiary of German producer


LIEBHERR, distributing excavators, bulldozers, cranes etc. on the
local market; the company has distribution points in Otopeni, Ilfov
County (main office), Timisoara, Piatra-Neamt, Constanta and ClujNapoca

MEM IMPEX: sells concrete / asphalt mixing stations produced


by AMMANN, road building equipment by ROADTEC etc.

PROTRUCK ECHIPAMENTE CONSTRUCTII: distributes NEW


HOLLAND construction equipment and IVECO trailers

SCANDIK POLIKRAFT: sells VOLVO construction equipment,


ship/boat motors and inflatable rafts

TRACTOR PROIECT COMERT: main imported products are


construction equipment specialized in foundation and drilling work
(Bauer, Klemm, Prakla, RTG, Fambo, Pileco etc.) and loading
equipment (Terex, Genesis, Kinshofer, Hammel)

VOLVO ROMANIA: sells a wide range of construction equipment


(including road building equipment and haulers

WIRTGEN ROMANIA: local subsidiary of WIRTGEN Group


producer of road building equipment

Other players worth mentioning are: COSIM TRADING,


EUROMAT GROUP, HIAROM INVEST, POWER EPAB, POWERTEK,
PROMEX, RADACINI ECHIPAMENTE, RET UTILAJE, STAR WEST

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MARKET IMPEX, ALEXANDRA

Other
information

Construction in Romania
2011

According to some experts, on the Romanian market there are,


apparently, very few companies which are able to deliver
professional maintenance services for equipments
Also, some experts opine that equipment dealers keep very low
stocks for spare parts
In recent years, numerous construction companies bought secondhand equipment and it is expected over the next years those units to
be replaced.

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98

Professional portable electric power tools1


Overview

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

Rotary / combi hammers, breakers and angle grinders hold


approximately 60% of the total market for professional portable
power tools.
Imports share has decreased in recent years as local producer
MAKITA started redirecting a share of their local production from
exports to the local market and EMERSON opened in 2009 a
production facility for its Professional Tools division (RIDGID brand)
near Cluj-Napoca (however, RIDGID is still in early stages of
development in the Romanian market).
Increase in demand for cordless power tools, measuring equipment,
semi-stationery circular saws and diamond coring tools.
Power tools with Li-ion electrical accumulator represent
approximately 35-40% of the market.
Main market players include (alphabetically): AEG, BOSCH, DE WALT
(part of BLACK AND DECKER), HILTI, HITACHI, MAKITA, METABO and
MILWAUKEE. All multinational companies present with their brands in
the Romanian market (either with established local branch or not) have
local distributors through which they sell their products.
Turnover
(mil EUR
2011)

Brief profile

59.3

In Romania, the BOSCH group activates in several


business lines: professional electric power tools,
automotive parts, heating boilers and white goods.
The group has 5 companies in Romania, ROBERT BOSCH
distributing auto parts, ventilation equipment and power
tools.
Imports three power tools product lines: professional (
Bosch blue), semi-professional (Bosch green) and DIY
(brand name: Skil)
According to official statements, the power tools division

Includes drilling and demolition, diamond coring, cutting, screw fastening and direct fastening products

Construction in Romania
2011

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99

HILTI
www.hilti.ro

HITACHI

1.8

MAKITA
www.makita.ro

107.81

has had a good evolution in year 2011 (10% growth) and


it is expected a similar pace for year 2012 (consistent
with the overall market growth). Sales of professional line
products and of SKIL products have been more dynamic
up 23% in year 2011 vs. the previous year, and up 30% in
value sales, respectively.
Products launched within 2 years usually hold up to 40%
of total power tools sales
Despite a leading position in the market, investments in
Romania seem to target local production facilities for
automotive division.
The companys products have been present on the
market since year 1992, but the companys subsidiary
was established in year 2005.
Own estimation of market share: 8%
Has 5 showrooms in 4 cities: Brasov, Cluj-Napoca,
Timisoara (1 showroom each) and Bucharest (2
showrooms)
Opened an office in Bucharest in 2007; prior to this, sales
were coordinated by the subsidiary in Hungary.
Among most important distributors are: Ranexim, Sfax
and Expotrade
Annual production capacity in year 2009: 1 million units;
plant located near Bucharest
Approximately 100% y-o-y increase in turnover for Makita
EU (production division in Romania) in the 2009-2011
period
Approximately 97% of production in 2009 was exported,
but in recent years, the company started redirecting a
small part of production towards the local market
Produces in Romania hammer drills, angle grinders, rotors
for power tools and other products
Company has approximately 200 distributors and
approximately 80 service centres
It is estimated that the companys market share in
Romania for angle grinders is the highest as compared to
the shares held in the market for any of the other
products in portfolio.

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

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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

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101

IV.

Building materials distribution

Overview

Players estimate the building materials distribution market value at


around 3.5 billion EUR in year 2012, with a slight increase compared to
2011. Previous years have brought declines in the market, with a slump
in 2009. DIY chains and large building materials distributors account for
the largest part of the market, with DIY chains share at around 35-40%
(at end-customer level). Players estimate that the DIY chains share will
continue to increase in the following period, while the shares of direct
sales and cash & carry outlets will decline (which is rather normal,
given that the cash & carry channel is not focused on building
materials). The share of specialized distributors is also expected to
increase.
Main distribution channels for building materials include:

DIY chains

DIY chains (e.g.: BRICOSTORE, PRAKTIKER, AMBIENT, DEDEMAN


etc.)

Large building materials distributors (e.g.: ARABESQUE, BADUC


etc)

Small building materials distributors

Specialized distributors (e.g.: wall building & other heavy


materials, ceramic tiles, insulation materials, float glass, power
tools, finishing materials or combinations of the above)

Direct sales / Sales offices

Other: Cash and carry outlet chains (e.g.: SELGROS, METRO) /


Hypermarkets

A number of international players are active on the local DIY market:


PRAKTIKER, BRICOSTORE, BAUMAX, OBI, HORNBACH, MR. BRICOLAGE
and LEROY MERLIN (newly arrived). Noticeable local players on the
market are DEDEMAN and AMBIENT.
All players active on the DIY market have entered through greenfield
projects.
The evolution of the DIY segment followed the general trends of the
construction works sector. Pre-crisis period was marked by strong
growth; players sales increasing by 30% to 60% y-o-y. Year 2008
brought about much smaller increases in turnover, averaging at around
+20%. During the 2009 - 2010 period, the market reported a 20-30%
decrease. Years 2011 and 2012 brought a slight recovery of the market,
especially propelled by renovation / refurbishment sector.
Most of the demand comes from natural persons who make renovations
/ refurbishments or small construction projects or independent
specialists (craftsmen).
Outlet expansion plans are put on hold by major players, which seem to
be apprehensive about new investments (at least some of them). On

Construction in Romania
2011

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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

DIY chains in Romania


Number of
outlets
Year
Year
2012
2008

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

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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

In 2012: introduced a number of services in its offer


(currently testing the markets response): installing
sanitary products, mounting flooring solutions,
windows, exterior doors, painting jobs, renovations
etc.
Apparently, there are speculations of PRAKTIKER
exiting the local market after low results in the
2009 - 2011 period.
Average investment per outlet 10 million EUR
Plans to expand the outlet network were put on
hold due to unfavourable market conditions.
Concentration of outlets in Transylvania region
Rough sales structure: 40% - wall building
materials, cement, reinforcing bars; 35% - finishing
materials; 15% - plumbing; 10% - furniture,
decorations and flowers
Distribution channels: 55% - direct sales; 45% - DIY
network
The company targets cities above 50,000
inhabitants for outlet / store opening
Outlet network comprises of 6 logistic centres /
warehouses (mostly destined for professionals /
companies), 14 large DIY outlets and 5 smaller
outlets.
Average investment per outlet 10 million EUR
(areas between 10,000 and 15,000 m2)
Recently finished investments at a new outlet in
Cluj
Entered the market in mid 2007
Recently completed a 30 million EUR investment
project for an outlet in Timisoara
Outlet size is larger than that of competitors
20,000 m2
Approximately 3,000 3,500 clients/day/outlet
Envisaged amortization for a unit: 3 - 5 years
At international level, KINGFISHER (one of Europes
largest DIY operator) has a 20% stake in
HORNBACH

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104

OBI
MR.
BRICOLAGE
(BRICO
EXPERT)
LEROY
MERLIN

Construction in Romania
2011

Part of TENGELMANN GROUP, also present on the


Romania market through PLUS stores (food retailer)
Average investment per outlet 4 million EUR
Entered the market in year 2007 following a jointventure between MR. BRICOLAGE (French DIY
chain) and Mr. Cezar Ropotan, which also owns
ARABESQUE (the largest B2B distributor of building
materials in Romania)
Entered the Romanian market in 2011, by opening
a DIY store in Bucharest
Own estimates of turnover in year 2012: 30
million EUR

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105

DIY chains across Romania

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

The main 9 DIY players in Romania have a total of approximately 120


outlets.
One can notice from the map above that, while AMBIENT concentrates
on Transylvania, DEDEMAN, PRAKTIKER and BRICOSTORE developed a
nation-wide network of outlets.
Bucharest holds the largest concentration of DIY stores with 19 units (all
nine players are present, even AMBIENT). Other major cities with DIY
chain concentration are Pitesti, Timisoara, Iasi, Brasov, Cluj-Napoca,
Arad, Constanta and Bacau. There are however some counties where
none of the major players have yet invested in a DIY outlet: Gorj, Salaj,
Ialomita, Teleorman, Covasna.

Construction in Romania
2011

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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

Turnover for MENATWORK EST PREFABRICATE.

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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

Other large building materials distributors include: ALVVIMAR, BIANDRA


TRADING, BRICOMAT, BRICOPLUS DISTRIBUTION, CITY GATE, CONSTAM,
COVA GHERA, G&G ROMANIA, INDYGO, PRESCOM, RUDENI GRUP,
SERSTILL, VEGA etc.
All aforementioned companies are more focused on heavy materials and
specialized in B2B sales, but represent main supply sources for natural
persons, too.
Specialized
distributors

Please see below some examples of specialized distributors by sector.


Specialized building & finishing materials / equipment
distributors
Turnover in
Company
2011 (mil
Sector
EUR)
PIASTRELLE
DELTA DISTRIBUTION
SSAB
PAZO GROUP

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

Note: *Turnover for year 2010.

Such types of specialized distributors are also in some cases direct


importers and sell products both to final beneficiaries and to other
resellers. While some have a nation-wide network of outlets such as
DELTA DISTRIBUTION, PIRITEX or CRISTAL BRAD, others have only one
major logistic centre and distribute themselves products on a certain
regional radius or work with a set of re-sellers (e.g.: Agent Trade,
Proenerg), depending on the type of product. Companies also include in
their product range accessories or complementary products: for ceramic
tiles mounting materials or tilling adhesives; for warm floorings

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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

Direct sales / Sales offices / Representative offices


Some local producers resort to direct sales especially in the case of
large volume projects. Sales offices are particularly present on
developing markets where products tend to be of higher value such as
bituminous membranes.
Other distribution channels for various building and finishing
materials (mostly): cash & carry outlets (METRO, SELGROS etc.) and
hypermarkets (CARREFOUR, REAL, AUCHAN, CORA etc.).

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Market
Drivers

Retail parks developers play an important role in developing


distribution networks, especially in the case of DIY chains. In recent
years, fewer development plans took shape due to unfavourable market
conditions and reluctance from banks to finance such projects. As such,
park retail developers have started to focus on build-to-site projects
(built at the request of tenants). Moreover, with fewer opportunities for
investments, large players have also started to be more open to
projects outside Bucharest.
With a continually diminishing share in the building materials
distribution, small distributors and outlets are generally destined for
craftsmen. This sales channel is expected to further lose market share
in favour of DIY chains.
Competition will intensify both within the same sales channel and
among various sales channels. For example, existing DIY chains will
have to face new market entrants (LEROY MERLIN). Also, B2B building
materials distributors could take up a proactive approach to developing
own retail networks if B2B sales continue to decrease (e.g. ARABESQUE
has about 18 outlets that can be visited by natural persons /
independent craftsmen and an online store).
Economic crisis still affects the construction sector, having a direct
impact on building materials distribution. Year 2011 however seems to
have marked the start of recovery in the distribution sector.

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