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How to predict the unpredictible - Doing Business | DOINGBUSINESS.RO

  |  12.11.2012

How to predict the unpredictible

The construction market, including the cement market, had a good start in 2012, continuing the positive trend that raise the level of the consumption of building material products in 2011

But, in the middle of the year the evolution of the economy changed dramatically and we can only guess when it will return to healthy growth.

 

The infrastructure projects were the main drivers of the demand in the first half of 2012, but there were also some important non-residential projects under development, like commercial centers, office buildings and industrial spaces that stimulated the cement consumption. 

 

Unfortunately, the development in the economies of the Euro zone and the changes in the budgetary priorities of the new government, made us to change our estimations for the evolution of the cement market in 2012.

 

If at the beginning of the year we estimated a slight increase of the market, by 2-3 percent, now we will be glad if we finish at the same level as the last year.

 

One of the biggest challenges now is the delay of payments made by the Government to the construction companies, which has an impact on the whole chain of the construction projects, including construction material producers and suppliers.

 

Money plays hard to get

 

Another challenge is that the investments in the private sector are decreasing, where the actual development is very weak, and the future doesn’t look any brighter, because the level of building permits is continously decreasing month by month in comparison to last year.

 

In addition, the level of absorbtion of EU fund is still at a low level and this should be a focal point for the Government in order to boost the infrastructure segment, which can provide significant growth to the GDP and has the potential to attract external financing.

 

It’s too early to make predictions for 2013, but the next year can be more difficult than this year, because of the crisis situation that continues in Euro zone and the difficult market conditions in the construction sector, which is affected by the diminished level of private and public investments.

 

Seizing local potential

 

Despite the actual economic development, Romania has a very important position for Holcim Group in the South-East European region, due to the size of the market and our significant presence in the market, as well as because of our more than 700 million EUR investments made in the last 15 years in Romania.

 

We believe in the potential of the local market and in the competitive advantages that Romania has for attracting foreign investments.

 

Our strategy on the Romanian market involves being close to our clients  and to improve our performance and efficiency in the operational sector.

 

Despite the economic context within the last years, Holcim Romania has intensified its communication activity regarding the solutions it provides to the specialists and end users in the market.

 

In Romania, especially in the crisis period, the ratio of individuals that are building their own houses vs. developers has increased. Many of them decide nowadays not to contract a construction firm and to make the project on their own.

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