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Construction and building materialssector in Romania

Overview 2011 and Outlook 2012 -2015

November 2012

Client: Trade and Investment romotion !ection o" t#e Re$ublic o" oland %&'I(



)rie" met#odolog* and limitations T#e met#odolog* "or elaborating t#is re$ort in based on desk research only %in"ormation"rom various secondar* sources(:

o O+cial statistical sources

o !$eciali,ed economic and general $ublications

o Own knowledge base %industr* in"ormation "rom $revious researc#(

o Industr* re$orts

o )usiness directories and )2) $ortals

o Internet

T#e anal*sis "or t#is $ro.ect was backed u$ b* /RT!CO3! continuous researc#undertaken in t#e construction sector in Romania in t#e $ast 10 *ears via a marketintelligence a$$roac# including t#oroug# desk researc# and interviews wit# knowledgeableindustr* e4$erts and ma.or $la*ers in t#e sector

lease note t#at detailing and accurac* "or eac# section o" t#e re$ort were in6uenced b*t#e availabilit* and relevance o" in"ormation in secondar* sources %obtainable u$on$ro$osed met#odolog* and wit#in agreed time"rame(

/RT!CO cannot be #eld res$onsible "or an* decisions made b* t#e client on t#e basiso" t#is re$ort

Construction in Romania2011

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T)7 O8 CONTNT! 9999999999999999999999999999999999999999999999999999999999999999999

I. ROMANIA – MACROECONOMIC OVERVIEW...................................................................................3

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

III. PROFIES OF MA!OR "UI#IN$ MATERIAS MAR%ETS IN ROMANIA......................11

RO )IT;/N........................................................................................................................................................11C/NT CONCRT <<R<T!.......................................................................................................................15

Cement ...........................................................................................................................................................15Concrete and aggregates .................................................................................................................18

&77 );I7IN< /TRI7! %&)/(.....................................................................................................................21Wall building materials overview ...............................................................................................21

AAC ....................................................................................................................................................................24

Bricks ...............................................................................................................................................................28Bricks and AAC - Product range, geographical coverage and pricing ............30

! T7.......................................................................................................................................................................32

ROO8IN< !O7;TION! N !TR;CT;R7 7/NT!..............................................................................................34Roof tiles (metallic, ceramic, concrete, bituminous ..................................................34!tructural elements ..............................................................................................................................39

);I7IN< '!I=!..............................................................................................................................................42IN!;7TIN< &INO& N OOR !>!T/!...........................................................................................................47

Pro"les for insulating windows and doors...........................................................................................47 #loat glass and insulated gla$ing............................................................................................................51

%hermal insulating carpentr& works......................................................................................................54#ittings..............................................................................................................................................................54P' foams..........................................................................................................................................................55

IN!;7TIN< /TRI7!...........................................................................................................................................56INT! CORTI= 7!TR! N OT'R &77 8INI!'IN< !O7;TION!.........................................................61

Paints ...............................................................................................................................................................61ecorative plasters ...............................................................................................................................66 Painters) "llings and plasterboards........................................................................................................68

87OORIN< !O7;TION!.............................................................................................................................................71

#looring market overview * !tructure of anal&$ed segments......................................................71Ceramic tiles (for +oor and wall.............................................................................................................71Wall-to-wall carpet ........................................................................................................................................73Paruet and other +ooring solutions "nishing products............................................................74

CON!TR;CTION ?;I/NT...................................................................................................................................76.eav& construction euipment ....................................................................................................76 Professional portable electric power tools..........................................................................................79

IV. "UI#IN$ MATERIAS #ISTRI"UTION........................................................................................81


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RO/NICa$ital: )uc#arest

/a.or cities: Constanta Clu.-Na$oca TimisoaraIasi Craiova <alati)rasov loiesti !ibiu

7anguage: Romanian

Currenc*: RON(/ 0'R 1 2342 R56 in5ctober 78/7

I RO/NI @ /CROCONO/IC O=R=I&

T#e Romanian econom* #as registered strong and continuous growt# in recent $re-crisis*ears t#e countr*3s gross domestic $roduct %<( doubling "rom 200A to 200B and t#usreac#ing a value o" 12A billion ;R w#ic# e4ceeded t#e e4$ectations o" econom*s$ecialists 7arger increase t#an e4$ected was attained in 200 too as t#e < increasedb* almost DE in t#e Frst semester o" *ear 200 w#ile t#e real terms evolution at *ear-endwas GBE %and broug#t t#e < value to a record o" 1HB billion ;R(

'owever in t#e Frst *ear wit# "ull eects o" t#e world economic crisis < dro$$ed b*almost BE and econom* was able to get back to $ositive evolution onl* in *ear 2011

'owever *ear 2012 $ointed out once again t#e weaknesses o" t#e Romanian econom* as?H 2012 broug#t decrease in terms o" Juarterl* < %vs ?H 2011( leading to a modestoverall evolution o" 0BE e4$ected b* t#e end o" t#e *ear

E&ol'()on o* Ro+an)a,s $#P )n years -/ 0 -12

%billion ;R(

0

20

A0

K0

0100

120

1A0

1K0

10

-E

-KE

-AE

-2E

0E2E

AE

KE

E

10E

<: %bil ;R( K0 BDB DB 12HB 1HK 11H 12H 1HK5 1HKB 1AA2 15AD 1K5D

nnual d*namicLL H0E A20E BD0E K20E B10E -KK0E -1K0E 250E 0B0E 2E 250E HH0E

200A 2005 200K 200B 200 200D 2010 2011 2012L 201HL 201AL 2015L


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HUNGARY

SERBIA

UKRAINE

REPUBLICOF

MOLDOVA

UKRAINE



9 6ote: ;ears < Periods marked with 9 (e3g3 78/79 represent forecasted values399 Real d&namic (not calculated for evolution of =P in 0'R, but to =P in R56 current prices !ource: 6ational >nstitute of !tatistics, 6ational #orecast Committee


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In 200B Romania #ad one o" t#e largest economic growt# recorded in t#e uro$ean ;nion%GKE( w#ic# was still be#ind t#e d*namic economies o" !lovakia 7atvia 7it#uania t#eC,ec# Re$ublic and oland 'owever t#e $rogress in t#e $ast *ears is undeniable: t#e <in Romania #as e4ceeded t#at o" 'ungar* since *ear 200K and #as been directl* com$etingwit# t#at o" t#e C,ec# Re$ublic starting wit# *ear 200B

On t#e ot#er #and t#e M$er ca$ita indicators a direct measure o" a countr*3s livingstandards are not at t#e same level as t#e ones o" t#e ot#er newl* admitted countries %t#e; admission waves o" 200A and 200B( @ Romania currentl* #as one o" t#e lowest values o"t#e < $er ca$ita among members o" t#e ; lt#oug# it #as increased in real terms andin value reac#ing a level o" around K000 ;R in 200B-200 t#e Romanian < $er ca$itais A times smaller t#an t#e ;2B average

Romania3s status as a net im$orter will most likel* maintain on medium term;nem$lo*ment rate #as begun to rise starting wit# t#e end o" *ear 200 and reac#ed analarming level o" E in 200D t $resent t#e indicator is on a rig#t $at# towards reac#ingagain t#e 5E mark

8oreign investors #ave long considered t#e economic environment o" Romania as being toounstable and risk* %"rom t#e administrative and legal $oint o" view and also due tocorru$tion( but t#e strong economic growt# and t#e $rivatisation o" t#e large state-ownedcom$anies %oil @ TRO/ met#ane gas @ I!TRI< metallurg* @ !IP automobiles @CI banks @ )CR telecom @ RO/T7CO/( #ave drawn "urt#er im$ortant investmentst#e $eak being reac#ed in 200K w#en "oreign direct investments cumulated over D billion;R

/ore details on t#e recent and "orecasted evolution o" t#e main macroeconomic indicatorso" Romania are com$rised in t#e table below

Indicators / Year 2004 2006 2008 2010 2012* 2015*

o$ulation %t#ousand in#abitants( 21KBH 210K5 20A2H 1DBHA 1D0AH 1D000<ross omestic roduct %< - billion ;R( K0 DB 1HK 12H0 1HKB 1K5D< @ real growt# %E( H BD B1 -1K 0B HH<ross value added "rom:

- Industr* %E( KK B2 1H A 05 H1- griculture "orestr* Fs#ing #unting %E( nQa HA 21A -KH -15 1A- Construction %E( D2 2HA 2K1 -BH 2A K1- services %E( nQa K 51 -2H 1B H0

verage rate o" in6ation %E( 11D KK BD K1 HA 2nd o" t#e *ear in6ation %E( DH AD KH 0 51 254c#ange rate %RON "or 1 ;R( A1 H5 HB A21 AA5 AA0

Commercial balance %8O) - CI8 in million ;R( -BHAK -1ADK -22B0D -D50D -DDA5 -1H50

- < s#are %E( -125 -152 -1KK -BB -BH -2;nem$lo*ment rate %E( K2 52 AA B0 52 A2

verage mont#l* gross earnings $er ca$ita %;R( 202 H25 AB A52 ABA 55AReal earnings growt# %E( 102 D0 1K5 -HB 2 1H

!ource: 6ational >nstitute of !tatistics, 6ational #orecast Committee, 0urostat? 6ational Bank of Romania

)* wa* o" conclusion t#e ne4t 2 - H *ears are e4$ected to bring u$ to 2 - H E *-o-* growt#"or < wit# a slow $ace o" "oreign investments %des$ite Romania remaining "airl*attractive "or some categories o" investors t#e di+culties in t#e uro$ean econom* ma*not allow "or im$ressive 6ows o" "oreign ca$ital into Romania on t#e s#ort run( T#e countr*a$$ears to be on t#e wa* to recovering "rom t#e crisis and t#us t#e ne4t 2 @ H *ears are


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critical in terms o" $roving w#et#er t#e econom* can be solid and reliable "or investors ornot


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II. O=R=I& O8 T' RO/NIN CON!TR;CTION!CTOR

!i,e and structure

High potentialsector withinnationaleconomy

Construction #as been amongst t#e most d*namic economic sectors o"Romania ac#ieving annual growt# o" 20 - H0E in recent $re-crisis *ears&it# a HHBE increase in real value in 200B Romania3s construction sectorobtained t#e to$ $lace among ; members in terms o" growt# in 200Romania was constantl* $laced among t#e to$ t#ree ; membersaccording to t#eir Juarterl* growt# o" t#e same indicator T#e global crisis#owever #as severel* aected construction in Romania as Fnancing was#indered or blocked at all levels

!ource: 6ational #orecast Committee, 6ational >nstitute for !tatistics

Engineeringconstrctionremains thesegment witha morero!ste"oltion#moderateps anddowns$ as

T#e Fnancial crisis ma* #ave indeed cri$$led t#e construction sector butdue to t#e s$eciFc local conditions t#ere #ave also been o$$ortunities o"countermeasures to it es$eciall* related to "unding "rom t#e $ublic sector"ocused on ma.or in"rastructure $ro.ects On t#e ot#er #and Romania #as*et to draw considerable "unding "rom t#e uro$ean "unds "orin"rastructure and regional develo$ment a $ositive c#ange in t#is as$ectwould re$resent an im$ortant growt# trigger "or t#e construction sectornot onl* in t#e conte4t o" t#e crisis but on t#e medium and long-term alsogiven t#e severe lack in all segments o" construction %es$eciall*in"rastructure and #ousing(


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#yna+)c o* cons(r'c()on 3rod'c()on &ol'+e )nde4(o(al and 5y (y3e

-H0E

-20E

-10E

0E

10E

20E

H0E

A0E

50E

K0E

Total HH0HE2B0AE-1510 -1H20 20E 220E 5E 550E KE

)uildings 5150EHKDDE-1B0 -2HD0 2D0E -E 050E 2E H50E

Civil engineering 201BE11BE-1220 -H10E 2K0E D50E B0E B50E BH0E

200B 200 200D 2010 2011 2012L 201HL 201AL 2015L



opposed to%pi&es' (or!ildingssegment$especiallyresidential)

;n"ortunatel* t#e countr* #as not $roved t#e ca$abilit* o" creating andmanaging an e+cient s*stem "or accessing ; "unds to a larger e4tentt#us t#e revival o" t#e construction works value in *ears 2011 and 2012remains modest

+he !oomregistered !y constrctionis !ac&ed p!y a realneed (or,ality anda-orda!lehosing and

in(rastrctr e In post.crisis years it is en"isagedthat the lac&inin(rastrctr e andhosingsegmentswold (rther propeldynamicgrowth paces

s illustrated in t#e "ollowing gra$# t#e total value o" construction worksin 200B reac#ed 1D billion ;R an astounding 5AE growt# in ;R value"rom t#e 200K Fgure lt#oug# t#e d*namics illustrated in t#e gra$# isin6uenced b* t#e evolution o" t#e RONQ;R e4c#ange rate t#ere is nodoubt about t#e strong real growt# o" t#is sector es$eciall* during $eriod200K @ 200

!ource: 6ational >nstitute of !tatistics, @arketscope estimates (for &ear 78//

T#e sector lost works wort# almost billion ;R in t#e 200D @ 2010time"rame wit# t#e ne4t cou$le o" *ears bringing similar *earl* levels%around 1B billion ;R( T#e value o" construction works is e4$ected togrow more signiFcantl* in real terms no sooner t#an *ears 201H @ 201A

+he capitalcharestconcentratesa high shareo(constrctionacti"ity

&it# res$ect to construction works distribution t#e )uc#arest-Il"ov regionconcentrates most o" t#e construction works3 value %a$$ro4imatel* H0E(t count* level %e4cluding )uc#arest and t#e count* o" Il"ov( t#e largestconcentrations o" construction works were recorded in Clu. Constanta and Timis %counties wit# large cities and strong economic growt#(

onstrctionthrogh ownmanagementha"eincreasedconsidera!lyin "ale$ !t

T#e "ollowing table breaks t#e total value o" construction works b* activit*@ new construction versus maintenance @ and se$arates constructionworks on contract "rom t#ose $er"ormed t#roug# own managementlt#oug# t#ere was some increase in t#e latter starting wit# 200K t#es#are in t#e total value o" new construction is still inconseJuential %S1E(s "or maintenance and current re$airs t#eir s#are o" t#e total was o" 1Ein 2010 %rat#er stead* in t#e $ast 2 - H *ears(

The e&ol'()on o* (he cons(r'c()on 6orks &al'e7 5roken do6n 5yac()&)(y 8+)ll)on EUR9


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The o&erall &al'e o* cons(r'c()on 6orks )n Ro+an)a

85)ll)on EUR9

/.: /.; 2.2 <.<=.-

1-.-

1=.>

-/.1

1=.11<.2 1>.

0

5

10

15

2025

H0

2001 2002 200H 200A 2005 200K 200B 200 200D 2010 2011



are stillinconse,ent ial

?--

?-/ ?-< ?-> ?-= ?-; ?-1

To(alcons(r'c()on7 o* 6h)ch@

/7;-= <7<;1-71;

-1=7>-

2-/71-

=1=7;; 1<7/=/

6ew construction

and capitalrepairs, of which:

,7/ 4,//2 ,4/8 /2,D /,EE /2,47E /,2/

- on contract H5HA 50KD DAHA 1ADA 1DK51 1AA55 1HA1A

- ownmanagement

B A5 BK 10A 12 B1 BB

@aintenance andcurrent repairs

/,8E /,24 7,D7 ,E7E 2,2 ,4E7 7,

!ource: 6ational >nstitute of !tatistics

on.residential!ilding isnot the maindri"er (orgrowthanymore

In a breakdown o" construction works on contract b* value included in t#e"ollowing c#art one can observe t#at 6uctuations o" dierent com$onents

#ave been ma.or in t#e $ast H *ears T#e most noticeable c#ange is t#edro$ in s#are o" non-residential buildings in *ears 200D and 2010 w#ic# ismore signiFcant given t#at residential buildings #ave witnessed adownward trend too Trans$ort in"rastructure #as strengt#ened $osition b*gaining e4tra 5E in t#e overall market %"rom 20E to 25E s#are(conFrming t#e segment as t#e most reliable in terms o" investmentsduring crisis


+he nm!ero( completeddwellings in200 has not

In addition to ma.or in"rastructure $ro.ects %w#ic# in Romania in man*cases #ave eit#er been dela*ed or $ut on #old due to lack o" "undsbureaucrac* or legal investigations( t#e evolution o" new dwellingscom$leted is anot#er im$ortant indicator o" t#e develo$ment o" acountr*3s construction sector lt#oug# t#e number o" announced orstarted residential $ro.ects #as increased considerabl* in recent $re-crisis


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S(r'c('re 5y &al'e o* cons(r'c()on 6orks on con(rac(

11.

-.<.

-2.

-/.

::.

0E

10E

20E

H0E

A0E

50E

K0E

B0E

0E

D0E

100E

2002 200A 200K 200B 200 200D 2010

Residential buildings

Non residential buidings

Trans$ort in"rastructure

i$es electric and

communication lines

Com$le4 constructions in

industrial areas

Ot#er civil engineering

constructions



droppedmassi"ely$ asmany wor&swere startedin pea&years

*ears t#e number o" delivered dwellings #as not risen to e4$ectationso"ten works being eit#er dela*ed or even abandoned due to variousreasons #istorical u$ward trend can be noticed "rom t#e "ollowinggra$# wit# im$ressive 20E growt# registered in 200K and 200B and arecord o" GA0E in *ear 200 during crisis $eriod t#e low in terms o"d*namics was reac#ed in *ear 2010 but t#e downward evolution

continued even in *ear 2011 'owever t#e clear ga$ between t#e e4istingstock o" million dwellings and t#e $otential demand in t#e #ousingsegment %estimated b* some e4$erts at anot#er #al" a million dwellings atleast( is envisaged to determine growt# rates above average %"or overall

construction( starting wit# *ears 201A @ 2015


oncentration o( newdwellingconstrction

Nort#-ast and Nort#-&est regions o" Romania #ave concentrated toget#era t#ird o" t#e new dwellings com$leted in t#e 2010 @ 2011 time"rame T#elowest number o" new dwellings com$leted in t#e $ast two *ears wasregistered in t#e &est Region and !out#-&est Region %$ossiblee4$lanations are rat#er dierent: &est com$rises onl* A counties and t#usa low number o" in#abitants w#ile !out#-&est is among regions wit# t#elowest < $er ca$ita(

T#e number o" new dwellings com$leted in )uc#arest and outskirtsaccount "or 1HE out o" t#e total units Fnali,ed in 2010 @ 2011 time"rame

evelo$ments during recession

Res)den()alcons(r'c()on

%ey )n*or+a()on

in ?H 200 @ ?1 200D works in a$$ro4imatel* H0E o" t#econstruction sites in Romania3s biggest cities were sus$ended dueto lack o" Fnancing construction com$anies "ocused on Fnis#ing


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E&ol'()on and dyna+)c o* ne6 Bn)shed d6ell)nCs

0

10000

20000

H0000

A0000

50000

K0000

B0000

0000

-H0E

-20E

-10E

0E

10E

20E

H0E

A0E

50E

Number o" new dwellings 2K11 2BB22 2D125 H012B H2K HDKH AB2DD KB255 K2520AK2 A5A1D

nnual d*namic 1KE HAE 51E HAE D1E 20KE 1DHE A22E -BE -22E -BE

2001 2002 200H 200A 2005 200K 200B 200 200D 2010 2011



advanced $ro.ects "or w#ic# "unding was still available a $ositive eect o" t#e crisis was bursting t#e Mreal estate bubble

leading to t#e cease o" s$eculative transactions t#at were #inderingt#e market3s maturing $rocess

a reduction in use"ul area o" 6ats "rom 100 to K0 m2 wit#in new$ro.ects

new $ro.ects are muc# smaller and beneFt bot# "rom t#e lower$rices o" construction materials and a limited com$etition atcom$letion date

anti-s$eculative measures taken b* t#e <overnment @ introductiono" a 1KE ta4 on real estate transactions com$leted b* individuals"or commercial $ur$oses

National 'ousing genc* intentions to e4$and its activities: notonl* im$lementing $ro.ects "or social #ousing but also #avemortgage-t*$e oers directed at "amilies wit# low to mediumbudgets

Non0res)den()al

5')ld)ncons(r'c()on

%ey )n*or+a()on

u$ until recentl* most non-residential $ro.ects were concentratedin t#e )uc#arest area but due to increasing demand $ro.ects werealso launc#ed in ot#er #ig# $otential areas %eg t#e western $art o" Romania(

anot#er $ossible $ositive eect o" t#e crisis would be t#e avoidanceo" an oversu$$l* on t#e commercial s$aces renting market

logistic $arks construction #as been less aected b* t#e crisis t#e area around t#e )uc#arest-itesti #ig#wa* continued to be

$re"erred "or logistic $arks commercial malls construction #as been limited to t#ose $ro.ects

t#at gat#er t#e Mcritical mass o" renting clients and t#at beneFt"rom a well-studied conce$t an e4$erienced develo$er and solid"unding

In*ras(r'c('re %ey )n*or+a()on

bureaucrac* and deFcient aut#orisation granting $rocedure wereamongst t#e ma.or reasons "or $oor results in in"rastructure$ro.ects3 $rogress

$otential access to im$ortant "unding bot# "rom t#e Romanianbudget and "rom uro$ean "unds %but absor$tion rate is low(

new #ig#wa* segments Fnali,ed: $arts o" Trans*lvania 'ig#wa*$arts o" )uc#arest-)rasov $arts o" )uc#arest ring road rad- Timisoara Cernavoda-Constanta

3ll in all$ theimmediate

maor e-ectso( the crisis

were

round 20000 construction com$anies "acing insolvenc* orbankru$tc*

$$arentl* t#e s#are o" construction works demanded b* t#e $ublicsector grew "rom H0E to K0E during *ear 200D %as Fnancing in t#e$rivate sector #as been di+cult and e4$ensive(

total o" more t#an 50000 workers were Fred in t#e sector T#e number o" building $ermits "or dwellings dro$$ed b* 20E in t#e

Frst D mont#s o" *ear 200D %vs similar $eriod o" $revious *ear( Romania #as #ad t#e stee$est dro$ o" construction activit* in ul* and


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%rima asa'

programme

ugust 200D %as com$ared to *ear 200( among ; members a"terbeing in 200K @ 200 one o" t#e to$ countries in terms o" d*namicgrowt# o" t#is sector

T#e <overnment #as launc#ed a $rogramme meant to stimulate demand"or dwellings called Mrima casa %M8irst #ome( but t#e low level o" t#e

sum guaranteed b* t#e state wit#in loan a$$lications $revented t#einitiative to be a real success t#at would boost new dwelling construction @t#e eect was a slig#t growt# o" demand "or dwellings costing 50000 @B0000 ;R %basicall* old dwellings or newl* constructed dwellings wit#low use"ul areas @ studio or two-room a$artments( T#e $rogramme seemsto #ave indeed encouraged transactions but t#e role in Mun"ree,ing newresidential $ro.ects #as been limited

7atest develo$ments in t#e Romanian construction sector %*ears 2011 @2012(

Overall value o" building materials market #as dro$$ed "rom roug#l*5 billion ;R in 200 to H billion ;R in *ear 2011 %similar levele4$ected in 2012 too(

la*ers in all segments %building materials $roducers contractorsetc( were strongl* aected as residential construction was severel*#indered b* lack o" Fnancing develo$ments in t#e non-residentialbuilding segment were even slower due to t#e su+cient number o"$ro.ects alread* com$leted in $re-crisis *ears w#ile $rogress wit#inin"rastructure $ro.ects became a "act onl* "rom t#e second #al" o"2011

rice strengt#ened its $osition as main decision making criteria "or

building materials and construction works t#us generating $roFtmargin dro$s "or su$$liers and t#e $ossibilit* o" lower Jualit*$roducts and services to en.o* some success in t#e market

Orientation towards e4$orts o" some building materials $roducersand o" some contractors

es$ite toug# market conditions leading $roducers in somebuilding materials segments #ave announced investments in new$roduction "acilities


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III. RO8I7! O8 /OR );I7IN< /TRI7!/RT! IN RO/NI

Road bitumen

O&er&)e6 )itumen market value increased signiFcantl* in *ears 200B @200 but witnessed a stee$ slide during crisis *ear 200D

Onl* two local $roducers o" bitumen are still active "urt#er to t#edecommissioning o" main $roducer RC'I/ %#eld b* O/=TRO/(

Im$orts currentl* account "or t#e bulk o" t#e market volume wit#still active local $roducers controlling less t#an 10E

Marke( s)Deand *orecas(

!ource: Previous research, desk research update, @arketscope estimates3

/arket value "or bitumen increased signiFcantl* in t#e $ast *earsmostl* because o" t#e dominance o" im$orts w#ic# lead to a ma.orgrowt# in $rice $er ton T#e volume evolution is t#us rat#er dierent inE terms as s#own below

7olme pea&

in 2008 to !ereachedagain !y2015


Revival o" ma.or in"rastructure $ro.ects $ro$elled t#e road bitumenmarket to reac# AA0 t#ousand tons in *ear 2011 wit# e4$ectations "or a


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stead* $ace o" D @ 10E growt# in t#e ne4t *ears %*-o-*(

Marke(s(r'c('re

y origin

y type

y sage

Romania #as its own bitumen $roducing "acilities bot# "or $ol*meri,edand o4idi,ed bitumen but overall $roduction level #as suered a ma.ordecline w#en t#e to$ $la*er RC'I/ was s#ut down in *ear 2011 In

t#e second #al" o" t#e 2001 @ 2010 decade demand #as started toe4ceed $roduction ca$acit* "or bitumen in Romania w#ic# allowed "ort#e consolidation o" t#e bitumen im$orters segment Im$orts used to#old a$$ro4imatel* 50E - K5E o" t#e volume be"ore RC'I/ wasclosed t $resent road construction virtuall* relies onl* on im$ortedbitumen

&it#in t#e road construction sector one can notice two main $roductcategories namel* Mnormal bitumen and M$ol*mer modiFed bitumen%/)( T#e latter is estimated to re$resent 25 @ A5E o" t#e total marketvolume alt#oug# market $artici$ants do not reac# consensus on t#isissue and t#us t#is s#are could be #ig#er given recent tec#nicals$eciFcation in road construction regulations

round D0E o" t#e total volume o" bitumen sold in Romania is used inroad construction w#ile t#e rest is used mainl* in water$rooFngsolutions $roduction %eit#er water$rooFng membranes or bitumen$rimers(

'istoricall* demand "or #ig# Jualit* bitumen usuall* used "orwater$rooFng or road sur"ace courses #as been $urve*ed b* im$ortswit# local $roduction meeting demand "or lower Jualit* bitumen suc# asbitumen "or binder courses "or roads

Co+3e()(orlandsca3e T#ere are 10 oil reFneries in Romania o" w#ic# K #ave bitumen$roducing "acilities @ out o" t#ree reFneries t#at used to $roducebitumen in t#e recent $eriod a$$arentl* onl* one is currentl* active%=< controlled b* RO/TRO7( T#e ot#er two $la*ers t#at recentl*#ave $ut $roduction on #old are RC'I/ %as alread* mentioned( andCRI!N )7C %"ormer TRO7!;) reFner* recentl* re"urbis#ed andannounced as a new market entrant but #as *et to conFrm in t#emarket(

Out o" t#e H reFneries wit# "acilities "or bitumen t#at #ave not beenused "or a long time t#e one in armanesti seems to be $otential target"or investments in re"urbis#ments as owners3 interest #ave beentriggered b* t#e domination o" im$orts at #ig# $rices in a #ig# $otential

sector like road construction

not#er com$an* wit# bitumen $roduction "acilit* %but not as $art o" areFner*( is 7T C/ %$artners#i$ wit# O/=(

ominationo( importsspeciali9edimportersand directimports o(

Im$orts o" bitumen #ave amounted close to A00 t#ousand tons in *ear2011 originating mostl* "rom 'ungar* %120000 tons( Ital* and)ulgaria %B0000 tons eac#( Ot#er im$ort sources include O/=reFneries in ustria %t#is $la*ers also im$orts "rom 'ungar*( and olis#$roducer N


wwwmarketsco$ero 1A



roadconstrctioncompanies

7argest s$eciali,ed im$orters are eit#er located at t#e )lack !ea %t#emain two bitumen terminals are controlled b* )IT;/ TRIN< and!R<NT /RIN( or in t#e &estern or Nort#ern $arts o" Romania %int#eir case t#e $rimar* distribution is o$erated b* road(: ;RO CTI=IN!RCO CO-=< CON!TR;CT TRN!-)IT N;R;! etc Ot#ernoticeable bitumen traders include ;NICO/ 'O7IN< and /!TRC'/

OI7

categor* o" bitumen users t#at ma* not resort to local su$$liers isre$resented b* large road construction com$anies o$erating directim$orts %bot# multinationals and local businesses( w#ic# use bitumenin as$#alt mi4ture $roduction suc# as !T7I /P-)U<7 !TR)<CO7! CON!TNT NCOR O7TNI etc %t#e latter two arebot# $art o" CO7! Romania(

"ITUMEN OCA PRO#UCERS

7E:3wwweurobitumco

m

V ownership: RO/TRO7 %in turn controlled b* /;NI <(V !itmen prodction capacity : K5000 tonsQ*ear

V estimated !itmen otpt : H0000 tons in *ear 2010%#owever at $resent $roduction seems to be more limited due tolack o" raw materials(

V location: loiestiV in"estments: K2 million ;R in t#e $eriod 2005-200B "or new

bitumen installation "uture investments %u$ to 1K million ;R(#ave been directed towards obtaining su$erior modiFed bitumenused "or bitumen water$rooFng membranes and $rimers

E+;<=>? • ownership: COI!7 Oradea• !itmen prodction capacity : W 250000 tonsQ*ear

%$roduction was restarted in *ear 2010 but a$$arentl* t#e "acilit*is not active at $resent(

•

location: !u$lacu de )arcau %)i#or count*(• other in(ormation: TRO7!;)3s $roduct mi4 is "ocused on

bitumen @ non-$ara+n road bitumen lig#t bitumen "or as$#altcardboard bitumen "or water$rooFng cationic bitumen emulsions@ but t#e reFner* will also $roduce "uels and black oil

E=+3 3@ 7T C/ 3DH is one o" t#e to$ contractors in Romania and isamong a grou$ o" com$anies wit# success in winning $ubliccontracts "or road construction and re#abilitation along wit# XCO;/) !ITION or ;ROCON!TR;CT TRIN<

T#e com$an* Fnali,ed in *ear 2010 t#e set u$ o" a bitumen$roduction "acilit* wit#in one o" t#eir $roduction $lants near)uc#arest %in o$esti-7eordeni( t#e $ro.ect is $art o" a deal wit#

O/= wit# t#e oil X gas giant su$$l*ing raw materials "or t#e Fnal$roduct and marketing t#e resulted bitumen w#ile 7T C/getting a s#are o" t#e revenues

T#e $roduct is a $ol*mer-modiFed bitumen and com$an* o+cialsstated t#at t#e $roduction ca$acit* reac#es 50 tons $er #our andwere e4$ecting to sell around 25000 tons $er *ear

%E? SPECIAIE# IMPORTERS OF "ITUMEN

I+?@+;3I:

wwwbitumtradingro

• )IT;/ TRIN< o$erates a bitumen terminal at t#e )lack !eacoast in /angalia %Constanta Count*( eliver* ca$acit* isbetween 00 and 200 tons $er da*


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http://www.eurobitum.com/


http://www.bitumtrading.ro/








• On-site deliver* is made eit#er b* trucks wit# loads o" 25 @ H5tons or b* trains %A5 tons $er wagon minimum 12-wagontrans$ort( T#e com$an* #as its own Jualit* control lab and claimsit can deliver bitumen at a tem$erature u$ to 1K0 degrees Celsius

• )IT;/ TRIN< is controlled b* CO7! Romania and it a$$earsto be t#e most im$ortant bitumen su$$lier in Romania %in terms o"

volumes delivered roug#l* estimated at over K0 t#ousand tons in$eak *ears(

>3;:E3+ @3;IE

wwwsargeantnet

• T#e com$an* is $art o" t#e !R<NT <rou$ @ a ma.or multi-countr* as$#alt s#i$$ing and bitumen terminal o$erator wit#terminals in Nort# merica and uro$e @ based on own statementst#e* o$erated one o" t#e largest 6eets o" as$#alt tankers andbarges in t#e world enabling t#em to su$$l* t#eir valuedcustomers wit# Jualit* $roducts via sa"e and e+cient modes o"trans$ortation

• storage (acilities: currentl* t#e terminal %located in Constanta(#as A storage tanks o" 2000 tons eac# 2 tanks o" A00 tons eac#and 1 tank o" 100 tons

•

other in(ormation: bitumen im$orts ma* #ave reac#ed A5000tons in $eak *ears %based on o+cial Fnancial Fgures released(E?;< 3+I7

Aalawwwbitumro

• ;RO CTI= is a distributor o" bitumen sourced bot# "rom t#elocal market and im$orted bot# normal and /) istribution iscarried out b* com$an*3s own H0-truck 6eet wit# s$eciali,edtrailers

• )itumen sales e4ceed H0 t#ousand tons based on recentestimations

Pr)c)n )itumen $rice #as registered a s$ectacular growt# in t#e $ast 10 *ears"rom around 200 ;! $er ton in *ear 200H to an average o" H50 ;R in*ear 200 %and u$ to A00 @ A50 ;R $er ton in $eak $eriods( In *ears200D - 2010 $rice #as dro$$ed again to an average o" about H00 - H20

;R $er ton but t#e limitation o" local $roduction #as broug#t anot#erma.or growt# starting wit# 2011 @ bitumen $rice #as risen to A50 @ 500;R $er ton determining mass-media to be concerned t#at Romania$a*s t#e #ig#est $rices "or road and motorwa* construction in uro$e

Ma)n +arke(dr)&er@ Road)n*ras(r'c('re)n Ro+an)a

It is a well-known "act t#at Romania #as one o" t#e weakest roadnetworks in t#e ; wit# t#e lowest number o" motorwa* kilometres %atotal o" around H50 km in several road sections( and still a large s#areo" not moderni,ed roads %almost H Juarters o" t#e road kilometreses$eciall* in rural areas(

T#e national roads network amounts to 1B t#ousand km %mostl*moderni,ed( but "or #al" o" t#e lengt# o" moderni,ed national roads t#ee4$loitation $eriod is currentl* e4ceeded /oreover t#e situation iscritical in terms o" count* and village roads In t#is res$ect t#e countr*#as been im$lementing a national roads re#abilitation $rogram t#at wassu$$osed to cover two t#irds o" t#e total network o" national roads b**ear 2015 but t#e current state o" man* o" t#e res$ective roads $ointout t#at t#e im$lementation #as been "ault* due to bureaucrac*inconsistenc* o" involved aut#orities and t#e low level o" absor$tion o"available ; "unds %to name onl* a "ew o" t#e reasons( ll in all t#esector #as *et to be invested in "or Romania to close t#e ga$ todevelo$ed ; countries


wwwmarketsco$ero 1K

http://www.sargeant.net/






&ort# mentioning is t#at besides normal wear o" some roads budgetsare reJuired "rom aut#orities "or im$roving road sur"aces aected b*low Jualit* works sometimes $er"ormed b* contractors

8urt#ermore t#e air$orts in Romania reJuire massive investments in

t#eir lanes %also made o" as$#alt(: b* 2025 it is estimated t#at t#e 1BRomanian air$orts will reJuire re#abilitation works wort# over 1 billion;R

)itumen consum$tion is also sustained b* t#e "act t#at cement roadbuilding in Romania #as not en.o*ed success mainl* due to t#e com$le4and e4$ensive tec#nolog* reJuired b* t#is alternate solution but alsodue to t#e lack o" e4$erience o" local contractors in im$lementing t#esolution


wwwmarketsco$ero 1B



Cement concrete aggregates

Cement

O&er&)e6 T#ree com$anies dominate t#e Romanian cement market t#e* are t#esubsidiaries o" some o" t#e largest $la*ers on t#e international market o"construction materials namel* 78R< 'I7)R< C/NT and'O7CI/ T#ese com$anies entered t#e Romanian market in 1DDB-1DD b*$urc#asing t#e e4isting cement "actories %built be"ore 1DD( w#ic# t#e*#ave modernised and e4$anded since

Cement consum$tion in Romania #as witnessed a d*namic u$ward trendstarting wit# *ear 2000 reac#ing G20E *earl* growt# rates in 200K and200B lt#oug# e4$ected to be a *ear o" strong growt# 200 registeredonl* a 10E increase in cement consum$tion due to a #ars# winter and t#eearl* mani"estations o" t#e crisis t#at s#ook t#e Romanian construction

sector in 200D and a"terCement consum$tion %in volume( dro$$ed b* a t#ird in two crisis *ears %astee$ decrease in 200D and a slig#ter one in t#e ne4t *ear( but a turning$oint came in *ear 2011 and t#e growt# alt#oug# minor is envisaged tocontinue in 2012 too

B acti"eclin&er prodcingcement plants

Nowada*s seven out o" t#e total o" nine cement "actories in Romania are$roducing clinker @ t#e basic material "or cement $roduction decadeago t#e su$$l* was e4ceeding t#e demand t#us t#e $roduction ca$acitieswere $erceived as being oversi,ed but latel* t#e ga$ #as beendiminis#ing 200B was t#e Frst *ear w#en demand e4ceeded su$$l* "romlocal $roduction and t#e Frst notable clinker im$orts were made %05

million tons( s a direct result t#e com$etitors #ad to reconsider t#eirinvestment $lans "or ca$acities enlargement but e4$ansion $lans wereagain revised a"ter t#e crisis struck

Marke( s)De ro6(h

E"oltion o( the;omanian

cement mar&et #million tons)

2002 200C 2004 2005 2006200

B2008

ocal ce+en(3rod'c()on7 o*6h)ch@

2.<= 2.;; <.-/ >./ =.-/1.

1.2

a*are22D 25K 2A0 2B2 2D2 H0 HD0Car3a(Ce+en(G 1A 1B 20K 2HB H11 HH0 HH0

Holc)+ 155 1KA 1BB 1D5 221 2D0 HH0Im$orted cement 002 01H 022 01B 011 015 0504$orted cement 100 0DH 0B0 0B5 0A5 015 015Ce+en(cons'+3()on )nRo+an)a

/.> 2.1= 2.>< <./2 >.;1.

1.;

2

*namic o" t#ecement market %E( AE 10E 11E 12E 22E 2BE 10E

Ce+en( -1< -:= -<< -;= :<< /</ 21<


wwwmarketsco$ero 1



cons'+3()on 3erca3)(a 8k9

9CarpatCement is the name of the Romanian subsidiar& of .eidelberg Cement

!ource: 6ational >nstitute of !tatistics, C>R5@, C0@B'R0A', @arketscope estimates

2006. 200Btime(ramewasspectaclarin terms o(cementconsmptiongrowth

Increases registered in t#e $roduction o" cement until 200A were modestbut due to t#e s$ectacular d*namic o" construction works in all segmentst#e demand "or cement increased also leading to growing $roductivit*and Juantities $roduced /arket $la*ers as well as e4$erts in t#e Feldwere taken b* sur$rise b* t#e MG20E increases in cement $roduction andconsum$tion registered in 200K-200B since "or at least B *ears be"ore t#ecement M$er ca$ita consum$tion in Romania was muc# in"erior to ot#er; members even w#en com$ared to newl* ad#ered countries "romastern uro$e T#e strong growt# o" t#e Romanian construction sector

and conseJuentl* o" cement consum$tion led to a M$er ca$itaconsum$tion o" 21< k3erson in 200 e4ceeding "or t#e Frst time t#euro$ean average

ement prodctionandconsmptionin crisis and post.crisisyears

<iven t#at im$orts and e4$orts do not in6uence signiFcantl* t#econsum$tion one can conclude t#at t#e market volume in t#e cementbusiness is re$resented b* t#e overall $roduction level reac#ed b* t#e H$roducers


T#e slig#t u$ward trend is e4$ected to continue in 201H @ 2015 wit# 5 @E *-o-* increases ll in all cement $roduction remains a #ig#-$otentialindustr* as increases o" u$ to 10E in cement consum$tion are e4$ected$ost-crisis at least until 201-2020 driven b* t#e severe lack in #ousingand in"rastructure

=ocal prodctionco"ers D5o( thedemand

Im$orts o" cement re$resent a minute $art o" t#e market usuall* beingo$erated b* small distributors or small construction com$anies t#at use it"or t#eir own needs %t#ere are no s$ecialised im$orting distributors o" largedimensions( main countries o" origin "or im$orted cement are usuall*'ungar* ;kraine and Re$ublic o" /oldova lt#oug# in 200B im$orts


wwwmarketsco$ero 1D



came to re$resent about BE o" t#e cement consum$tion in Romania%taking into consideration t#e amount o" im$orted clinker used wit#in t#egrinding "acilities o" local com$etitors and t#e Juantit* o" cement resultedbesides im$orted cement( in 200 and "rom t#at $oint on t#e* reverted tore$resenting an inconseJuential s#are o" t#e market

=a(arge is theonly playerthat haseFportedsigniGcant"olmes o(cement prodced in;omania

Regarding t#e e4$ort o" cement 78R< is t#e onl* $roducer t#at #asmade notewort#* e4$orts %$er#a$s because t#e* o$erate t#e onl* $lantsituated near t#e #arbours at t#e )lack !ea in /edgidia( T#e descendingtrend registered b* t#e e4$orts o" cement was caused b* t#e "act t#at7a"arge graduall* redirected its $roduction almost entirel* towards t#einternal market e4$orting less t#an 10E o" t#e volumes $roduced in 200B-200 w#ile a "ew *ears ago t#e* were e4$orting almost a t#ird o" t#evolumes uring crisis e4$orts became inconseJuential %as mentionedabove $roduction and consum$tion can virtuall* be considered eJual at$resent(

Marke(

3layers

T#e com$anies t#at are $resent on t#e Romanian cement market are

subsidiaries o" 78R< 'I7)R< C/NT and 'O7CI/ T#e* #aveentered t#e market in 1DDB %78R< and 'O7CI/( and 1DD%'I7)R< C/NT( b* acJuiring %graduall*( t#e e4isting local cement$roducers

=argein"estmentswere made inthemodernisation o( theeFistingcement plants$ !tno greenGeld in"estmentwascompleted pto now

nvironmental issues and an underdevelo$ed market were t#e ma.or$roblems w#ic# t#e international com$anies #ad to deal wit# "urt#er tot#eir market entr*: t#e tec#nical and environmental status o" t#e "actorieswas well below uro$ean norms X regulations and related internationalstandards w#ile t#e market was undersi,ed @ a"ter 1DD t#e $roductionwas reduced drasticall* due to low demand and t#e $ossibilit* o" e4$ortwas limited T#e situation c#anged due to t#e im$ressive investmentsmade b* t#e com$anies %1 billion ;R cumulated investments until 200K(:toda* all t#e "actories #ave integrated environmental $ermits inaccordance wit# t#e uro$ean ;nion legislation

ey prodcersha"e (airlyclose resltsin terms o(trno"er and prodction

!ource: @inistr& of #inance


wwwmarketsco$ero 20



ublic Fnancials s#ow t#at 'O7CI/ #as been less $roFtable t#an t#eircom$etitors in t#e anal*,ed $eriod ll in all alt#oug# $roFts still lookattractive %at least "or two out t#ree com$etitors( t#e cement $roducersnot onl* #ave lost a t#ird o" t#eir revenues due to crisis but t#eir $roFtmargins #ave declined signiFcantl* "urt#er to t#e crisis

<nly onenoticea!lespeciali9edimporter

C/INTR is a com$an* o$erating a cement terminal at t#e )lack !ea t#e$roduct being sourced "rom t#e #omon*mous !$anis# grou$ %volumeslevel is inconseJuential as com$ared to $roduction o" t#e ke*com$etitors(

Prod'c(rane

Out o" t#e generic 5 t*$es o" cement deFned b* standards %e4cludings$ecial cements t#at #ave s$eciFc regulations( in Romania are $roduced

several t*$es o" C/ I and C/ II cements ortland com$osite cements %II and )( dominate t#e market %about 0E o" cements used( wit# t#e C/IIQ) t*$e accounting "or about a #al" o" t#e total volumes Regarding t*$eo" deliver* sacks are currentl* t#e $re"erred met#od o" deliver* %roug#l*55E o" cement sold( but bulk deliveries #ave been steadil* gainingground and will $robabl* sur$ass in a "ew *ears deliveries b* sack %t#esame as in mature cement markets in &estern uro$e(

s "or s$ecial cements 78R< and CRTC/NT $roduce low#*dration cements%' II( and cements "or roads and air$ort runwa*s %CA0( w#ile 78R<also $roduces cement resistant to sul$#urous waters and "or drilling wells

%!R I and !2R!( masonr* cements are $roduced b* 'O7CI/ and 78R<under t#e Tenco and /ultibat brand names res$ectivel* dditionall*'O7CI/ used to $roduce w#ite cement but due to t#e unsustainable risesin t#e met#ane gas $rice %an im$ortant element in w#ite cement$roduction( t#e com$an* decided in 200B to give u$ on t#e $roduction o"t#is t*$e o" cement %t#e 'O7CI/3s Turda "actor* was t#e onl* $roduction"acilit* in Romania "or w#ite cement(

Usae In Romania cement is used in t#e $roduction o" t#ree main $roductcategories %w#ic# contain cement in s#ares ranging "rom 10 to 20E(:

• wet or read*-mi4 $roducts %concrete mortars and blanket

com$ounds(• solid com$act $roducts %C concrete $re"abricated $roducts @

roo" tiles $avements etc(• solid $owder $roducts %ad#esives $lasters dr* mortars and sel"-

levelling com$ounds etc(

T#e main use in terms o" volumes needed is t#e obtaining o" wet or read*-mi4 $roducts %accounting around B5E o" t#e cement used( T#esecom$ounds #ave a large usage in t#e construction sector and aredelivered alread* $re$ared b* s$ecialised stations or are mi4ed onsite b*Fnal users wit# own mi4ing eJui$ment


wwwmarketsco$ero 21



Pr)c)n verage e4-works $rices "or cement in 200 ranged between B0-0 ;R$er ton u$ 10-15E vs $revious *ear On medium term e4-works $riceswere e4$ected to grow b* 12E $er *ear in a moderate scenario but ita$$ears t#at in *ear 200D t#e eects o" t#e crisis $revented $roducers too$erate noticeable c#anges lt#oug# $roduction costs #ave been growingsince 200D cement $rice registered consecutive decreases %b* 5E in bot#200D and 2010( wit# onl* a minor increase in *ear 2011

Concrete and aggregates

O&er&)e6 )ot# t#e concrete and t#e aggregates markets are "ragmented wit#numerous small $la*ers and onl* "ew im$ortant ones s in man* non-mature markets several $roblems occur like Mblack Q gre* market$ractices sub-standard $roducts illegal raw materials e4$loitations orenvironmental issues #owever measures #ave been taken to im$rovet#e situation at bot# aut#orit* and $rivate level

n im$ortant develo$ment t#at led to t#e growt# o" concrete business%and im$licitl* to t#e growt# o" aggregates consum$tion( was a c#angein users3 $re"erences namel* t#at more and more Fnal users #avingt#eir concrete delivered as Mread*-mi4 $roduct b* s$ecialised concretestations instead o" obtaining it on site wit# t#e #el$ o" t#eir own more

or less modern installations

Marke( s)De It is estimated t#at almost 12 million mY o" read*-mi4 concrete were soldin 200B w#ile in 200 t#e market registered an over 20E increaseto$$ing at around 15 million mY es$ite initial $ositive growt#estimations "or 200D %ranging "rom H-AE @ moderate scenario @ to 10E @o$timistic scenario( t#e Frst #al" o" 200D $roved to be worse t#anantici$ated: some o" t#e most im$ortant $la*ers on t#e market

registered as muc# as 50E dro$s in sales lt#oug# some su$$liers didnot e4$ect t#e market to $lummet t#e realit* s#owed one o" t#estee$est declines in t#e entire construction sector: almost 50E %marketreac#ing onl* million mY b* t#e end o" *ear 200D( 8urt#er to adecrease o" 10 @ 15E in *ear 2010 t#e concrete market is $erceived asto #ave registered a similar slig#t growt# $ace as t#e construction worksvalue in $eriod 2011 @ 2012 %as being t#e ke* material wit#in t#esector(

'owever t#e Fgures mentioned above regarding t#e consum$tion o"concrete could be considerabl* underestimated as Mblack market


wwwmarketsco$ero 22



Illicit"olmes notinclded inmar&etestimation

$ractices are still ver* common %u$ to about H0E o" t#e marketaccording to industr* e4$erts( and "urt#ermore t#ere are alsoim$ortant volumes o" read*-mi4 concrete obtained b* t#e Fnal users onsite %ver* di+cult to track Q Juanti"* Q estimate( T#ere"ore t#e volumesmentioned above re"er onl* to $roduct obtained in s$ecialised concretestations and sold as suc# to users

/arket $la*ers estimate t#e aggregates market at B0 - D0 million tons in200 w#ile "or 2011 numbers range "rom 50 to B0 million tons o" soldaggregates 'owever one s#ould bear in mind t#e limitations inestimating t#is market3s volume as on t#e aggregates market illegal$ractices are wides$read %t#e most common $ractice is overloadingtrans$orts well be*ond t#e limit admitted b* law "or road trans$ortssince trans$ort costs can re$resent as muc# as 50E o" total costs "orcom$anies active in t#e aggregates su$$l* business(

Marke(3layers

T#e concrete market and t#e aggregates market are ver* "ragmented:200 - H00 com$anies are active on t#e concrete market and around 500- B00 on t#e aggregates market /ost o" t#ese com$anies are smallonl* "ew distinguis# t#emselves t#roug# si,e and geogra$#ical coverage%t#e large $la*ers are t#e local subsidiaries o" internationalcom$etitors(

8urt#ermore some large construction com$anies #ave t#eir ownconcrete stations t#at $rovide "or t#eir needs t#e* are not $la*ers ont#e market o" concrete deliveries %t#e* usuall* do not sell $roducedconcrete( alt#oug# t#e* $roduce im$ortant volumes o" concrete

T#ere are two associations t#at re$resent t#ese markets: )R %t#essociation o" Concrete roducers( and %t#e ssociation o"

ggregates roducers( T#e* include some o" t#e most im$ortant$la*ers on t#e market and #ave an active role in sector3s regularisation

ragmentedmar&ets$o"erlaps!etween playersacti"e oneach mar&et

e* com$etitors are CRT )TON Q CRT <R<T%www#eidelbergcementro( 78R< %wwwla"argero( 'O7CI/%www#olcimro(R>/IP %wwwread*mi4ro( <NR7 )TON %wwwgeneralbetonro(INC IN=!T/NT <RO; %wwwindacro( 7! %wwwalas-romaniaro(and <RN/R %wwwgrandemarro(

Prod'c(s Pr)c)n

T#e most notable action taken in order to assure a minimum Jualit* "ort#e $roducts oered on t#e market was t#e im$lementation in ul* 200o" t#e MCode o" best $ractices in concrete $roduction T#e code was a .oint $ro.ect between /77 %t#e /inistr* "or evelo$ment and'ousing( CIRO/ %t#e ssociation o" Cement roducers( RCO %t#ero"essional ssociation o" Construction Com$anies( and )R %t#essociation o" Concrete roducers( wit# t#e $ur$ose o" ensuringminimum sa"et* standards "or new construction in Romania


wwwmarketsco$ero 2H

http://www.heidelbergcement.ro/

http://www.lafarge.ro/

http://www.holcim.ro/

http://www.readymix.ro/

http://www.generalbeton.ro/

http://www.indac.ro/

http://www.alas-romania.ro/

http://www.grandemar.ro/

http://www.heidelbergcement.ro/


http://www.holcim.ro/

http://www.readymix.ro/

http://www.generalbeton.ro/

http://www.indac.ro/

http://www.alas-romania.ro/

http://www.grandemar.ro/



Heterogeneos pricerange

Concrete $ricing de$ends on its com$osition use and geogra$#icalarea t#us resulting in large $rice ga$s between concrete $roducts: "romA0 to 150 ;R $er mH reas o" concentration "or concrete consum$tionare Timisoara rad and Oradea in t#e &est o" t#e countr* !ibiu Clu.and )rasov in t#e Centre Iasi and Constanta in t#e east and o" course

)uc#arest and its outskirts

rices "or obtaining aggregates de$end on t#e Juarr* e4$loitation "eesestablis#ed b* t#e National genc* "or /ineral Resources T#e "act t#atmost $la*ers on t#e market are ca$tive %t#e* act as Maggregatesdivisions delivering t#eir $roducts to mot#er com$anies @ concretestations bitumen stations construction com$anies( and t#at t#e$roduct range is rat#er various makes it di+cult even "or industr*e4$erts to estimate an average $rice


wwwmarketsco$ero 2A



&all building materials %&)/(

&all building materials overview

Marke( s)Deand s(r'c('re

T#e main categories o" wall building materials used in Romania are Cand cla*Qceramic bricks w#ic# account toget#er "or almost 0E o" t#ewall building materials market $eculiarit* o" t#e Romanian market ist#at in addition to t#e two ma.or $roduct categories mentioned aboveand ot#er usual t*$es o" wall building materials %eg timber concreteblocks $re"abricated $anels etc( t#ere are two wall building materialst#at are $roduced and used b* #andicra"t namel* trellis works andadobe %used $rimaril* in $oor rural areas( lt#oug# t#eir role s#ould notbe neglected t#e relative im$ortance o" t#ese materials is low and willmost likel* continue to diminis#

Jall !ilding materials . ;omanian mar&et growth 2002 K

2012 #tho mL)Year -- -/ -< -= -; -1 -11 -1-G

AAC 1H50 150 2K00 H200 2200 2100 1D50 1D00"r)ck s D50 1H50 2050 250 150 100 1B50 1B50O(her 1A50 1550 1B50 1D50 1250 1200 1150 1150TOTA :7>2 /7>2 <7/ =7 27: 271 /7=2 /7=


33 and!ric&s

dominate themar&et

T#e Fgures below s#ow t#at C and bricks are t#e dominant wallbuilding materials in Romania b* volume %mY( wit# a s#are o"

a$$ro4imatel* HD-A0E and HK-HBE in t#e 2011 @ 2012 time"rameres$ectivel*

E !tructure o"&)/ market in2012 %mY(

AAC / "r)cks :<O(her-/


)ricks registered stronger *-o-* growt# rates between *ears 2002 and200 as com$ared to C and managed to reduce t#e ga$ on C'owever C is still t#e wall building solution o" c#oice "or largerstructures %es$eciall* in urban areas(

Regarding materials used in construction o" #omes consumers seem to$re"er bricks t#oug# in recent *ears a $art o" t#is segment o"consumers seems to #ave "ocused on C

Timber #olds around -DE o" t#e market and its $o$ularit* is slig#tl*growing %es$eciall* in rural areas wit# low 6ood risk and Q or #ig#eart#Juake risk and "or summer Q vacation #ouses( as it is c#ea$er t#anbot# bricks and C 8urt#ermore a I> Q small industr* materiala$$arentl* #olds a noticeable s#are o" t#e market %5-KE at $resent( -t#is material is called lig#t aerated concrete %7C( and is com$etingdirectl* wit# C %#owever t#e C consum$tion is K-B times #ig#er(

T#e market decreased b* more t#an H0E in volume in 200D com$ared


wwwmarketsco$ero 25



E-ects o( theGnancialcrisis are still

"isi!le

wit# t#e $revious *ear wit# t#e bricks segment more aected t#an t#eC one In value t#e market decrease was even more $ronouncedconsumers "ocusing more on $rice rat#er t#an Jualit* w#ic# "orced$roducers to lower t#eir $rices in an eort to maintain t#eir markets#are la*ers estimate t#at market value "or wall building materials at$roducer level in *ear 2011 was less t#an A0E o" t#e market value in

*ear 200 %reac#ing about 100 - 110 million ;R "or C and about K0 -B0 million ;R "or bricks in *ear 2011( /oreover t#e $la*ers3di+culties in dealing wit# a market in recession were am$liFed b* t#eFnancial Q cas#-6ow $roblems o" t#eir distributors

reas suc# as t#e Nort#-astern $art o" Romania w#ere most sales goto individual $ro.ects were less aected b* t#e crisis at least in t#e Frstmont#s o" 200D Ot#er regions suc# as t#e western $art o" Romaniaw#ere large building $ro.ects take a #ig#er $ercentage in salesregistered ma.or dro$s in sales since t#e beginning o" t#e same *ear

T#e market continued to decrease in t#e 200D - 2011 $eriod and several$la*ers e4ited t#e market O$timistic scenarios $lace t#e market in *ear

2012 at t#e same volume as t#e one in t#e $revious *ear even t#oug#sold Juantit* o" wall building materials in t#e Frst semester o" t#e *earwas less t#an sales during t#e same time "rame o" t#e $revious *eardue to un"avourable weat#er conditions %t#e decrease was more$ronounced "or t#e C segment(

!ome $la*ers state t#at market volume in *ear 2012 will most likel*continue to decrease but a re"ocus on Jualit* o" $roducts and increaseo" $rices ma* lead to a stagnation regarding t#e value o" market /ainobstacles in t#e revitali,ation o" t#e market as stated b* $roducers areMun"riendl* loan $olicies and national $olitics regarding ta4es andincomes %w#ic# make t#e local market unattractive "or investors inconstruction( T#e "ollowing $eriod is considered to be t#at o"stabili,ation b* most $la*ers increases in market volume beingenvisioned "or *ears 201H - 201A

Imports o(!ric&s and 33 ha"edecreased

s in case o" an* #eav* $roduct distribution o" wall building materials israt#er regional im$orts re$resenting a viable solution onl* "or areasnear t#e borders or in case o" #ig#-volume im$orters %I> Q buildingmaterials distribution c#ains or branc#es o" international $roducers( In200B-200 around 10E o" t#e C demand was covered t#roug#im$orts es$eciall* "rom neig#bouring countries suc# as 'ungar* and)ulgaria 'owever some $la*ers com$lain t#at im$orts "rom countriessuc# as !erbia Croatia )ulgaria 'ungar* or Turke* are not c#ecked b*INCRC %t#e Romanian )uilding Researc# Institute( and t#e* tend to be

o" $oor Jualit* #ence a t#reat to building sa"et*Im$orts "or bricks accounted "or 25-H0E o" market in *ears 200B-200but recent investments #ave lead "or local $roduction ca$acit* toe4ceed consum$tion wit# about 50E 'owever im$orts still cover a $arto" consum$tion wit# distributors c#asing lower $rices at $lants "romabroad and local $roducers wit# "actories abroad aiming "or logisticse+cienc* %im$orting "rom neig#bouring countries in order to coversome areas nearb* t#e borders( T#e most im$ortant countries o" origin"or bricks im$orts are 'ungar* Croatia )ulgaria and !erbia


wwwmarketsco$ero 2K



Co+3e()(orlandsca3e

T#ere are around 25 brick $lants and 12 C $lants currentl* active inRomania @ market is dominated b* t#e C $roducers %controlling 10$lants( and 5 ma.or brick $roducers %ot#er 10 brick $roducers are alsowort# mentioning in terms o" volumes( t#us one can notice t#e sector israt#er concentrated Onl* "ew com$etitors $roduce bot# C and

bricks s regards ot#er wall building materials t#e market is more"ragmented trend during t#e 200D - 2011 $eriod was "or smaller$roducers to e4it t#e market or to be taken over b* larger grou$s

@ar&etdominated !y arond 15maor wall!ildingmaterials prodcers

o maor

changes intrno"er in2011 "s2010

T#e c#art below outlines t#e to$ 12 $la*ers in t#e market based ontotal turnover 4ce$t "or t#e international brick $roducer&INR)R<R t#e ot#er com$anies t#at are s$ecialised in brick$roduction are situated towards t#e bottom o" t#e to$ %CR/IC Iasi!ICR/ C/CON( !OCR/ is t#e onl* $roducer o" bot# C andbricks $resent in t#e to$ ll $la*ers in t#e to$ #ave additional $roductsegments %usuall* C com$anies also $roduce $re"abricated concrete$roducts w#ile bricks $roducers also make ceramic tiles( but C Qbricks re$resent t#eir main $roduct %considering s#are in com$an*sales(

F)nanc)al res'l(s *or (he (o3 1- 3layers on (he 6all

5')ld)n +a(er)als +arke( 8+)ll)on EUR9

<.2

>.:

11./

1:.:

12.:

1<.-

1<.>

-.-

-./

-.2

-/./

->.;

5H

B5

1H1

1H0

1B0

15A

200

1DD

1KA

205

25B

20

0 5 10 15 20 25 H0

Cemacon

Pella

re"abricate =est

!iceram

re"ab

Ceramica Iasi

!oceram

l$reco

!omaco

Celco

/acon-!imcor

&ienerberger

Turnover 2010

Turnover 2011


6ote3 @AC56-!>@C5R)s turnover and pro"t represents the "nancial result of @AC56 !RF *the onl& compan& within the @AC56-!>@C5R group with AAC production facilities36ote3 !5@AC5)s turnover and pro"t represents the "nancial result of !5@AC5 =R'PPR0#ABR>CA%06ote3 PR0#ABR>CA%0 G0!%)s turnover and pro"t represents the aggregated "nancial result


wwwmarketsco$ero 2B



of PR0#ABR>CA%0 G0!% holding (companies PR0#ABR>CA%0 G0!%, PR0#ABR>CA%0 G0!% 5>and PR0#ABR>CA%0 G0!% PA%R'36ote3 All companies) turnover re+ects all activities undertaken b& each compan&, asdeclared at the @inistr& of #inance (not necessaril& onl& AAC and < or bricks sales3

)ricks and C markets are dominated b* local $la*ers @ t#ere are onl*two multinationals t#at establis#ed a strong "oot#old in Romania

namel* &INR)R<R %currentl* #olding H brick $lants and alsoo$erating im$orts mainl* "rom 'ungar*( and P77 %started as a saleso+ce o$erating im$orts and began o$erations at a local $roduction"acilit* in *ear 2010(

ue to t#e #ig# returns obtained b* com$anies active in wall building$roduction in Romania in *ears 200-200D several international $la*ersand investment "unds #ave taken interest in local $la*ers andQorinvestments on t#e market 8or e4am$le some o" t#e local $la*ers #avebeen boug#t b* investment "unds T#e most active "unds $resent inRomanian construction sector are NTRRI! IN=!TOR! OR!=NT;R! and =NT INTRNTION7 eac# #aving made more t#anone acJuisition o" a building materials $roducer T#eir strateg*su$$osed a $roFtable e4it in A-5 *ears or kee$ing t#eir stakes "or 10-15

*ears i" t#e market grows signiFcantl* $ost-crisisIn *ears 2010 - 2011 #owever turnovers "or most main $roducersdecreased signiFcantl* %reac#ing values 2 @ A times lower t#anturnovers in *ears 200 - 200D(

@ar&et.orientedcompaniesha"e alreadyin"ested in!randing

T#ere is little $ossibilit* "or $roduct dierentiation on t#e C and bricksmarket t#us brands can be a $ower"ul tool es$eciall* during crisissince now t#e market no longer absorbs all $roduced assortments as int#e recent $ast

)esides international $la*ers &INR)R<R and P77 w#ic# #avesolid brand $olicies one can notice t#e eorts o" some local businesses

in t#is res$ect: eit#er com$anies boug#t b* international "unds %t#atcome wit# t#eir own vision on $roduct marketing im$lementing t#eirknow-#ow in t#is area( or $la*ers wit# Romanian s#are#olding%com$anies t#at #ave realised t#e im$ortance o" a strong brand inmarket com$etition(

33 prodcer rand ric&s

prodcer rand

Pella >tong &ienerberger orot#erm/acon-!imcor &abe !iceram Termoblocre"abricate=est

=erblok !oceram urot#erm

!omaco <ru$re"abricate !omaco Ceramica Iasi )rikston

C


wwwmarketsco$ero 2



AAC +arke(s)De

rior to *ear 200D t#e local C market #as #ad a ver* d*namicevolution wit# *-o-* growt# greater t#an 10E eac# *ear %e4ce$tionbeing *ear 200 wit# onl* a BE increase( T#e market deceleration in*ear 200 was also in6uenced b* t#e $#*sical limitations o" $roductionca$acities w#ic# #ave virtuall* worked at "ull ca$acit* since 200B Invalue terms t#e market was estimated in 200 at around 2A0 million

;R growing b* 15E "rom 200B

In 200D local C $roduction dro$$ed b* H0E %to around 2 million mY(and t#e w#ole market %including im$orts( decreased b* at least H0 -H5E /arket $la*ers estimate t#at average $rices decreased b* 1K-1Ein 200D as com$ared to t#e $revious *ear stimates o" consumed Cin Romania in *ear 2011 range "rom 1D million mY to 2H million mY#owever most reliable estimates $lace t#e market volume at around 2million mY 2011 was t#e t#ird consecutive *ear to register a negativeevolution o" C market volume

4$ectations o" stagnation "or *ear 2012 are considered t#e mosto$timistic as volumes o" C sold during t#e Frst semester o" t#e *ear

were lower t#an t#ose in t#e similar $eriod o" t#e $revious *ear T#eC market is #owever e4$ected to return to growt# "or at least H-A*ears a"ter recession $eriod is over %assumed "or *ear 201H( be"orestabili,ing t#us boosting t#e set u$ o" anot#er two or t#ree $roduction$lants )esides new investments t#ere is still a need "or modernisationor even re$lacement o" some o" t#e current $roduction lines as t#e* arerelativel* ine+cient and use outdated tec#nolog* %"ew $roducers #aveinvested in entirel* new $roduction lines most o" t#em #ave limitedt#emselves to u$grading e4isting "acilities w#ic# #ave beenconstructed in t#e communist $eriod(


wwwmarketsco$ero 2D



33consmptionmore thando!led inthe 2000.2008time(rame


Maor 3layers !ome o" t#e most im$ortant $la*ers on t#e market are members o" t#eMro )C association %t#e C roducers3 ssociation( accounting "orabout B0E o" t#e C market T#e association was establis#ed in!e$tember 200 and is made u$ o" C7CO /CON !OCR/ P77!O/CO <R; R8)RICT 7RCO 7) 7;/INI; and CO)7OC wit# discussions o" also including t#e com$an* R8)RICT=!T %R8) is t#e onl* large com$etitor not member o" t#ea"orementioned association( T#e table below outlines t#e to$ $la*ers on t#e C market based onturnover $roduction ca$acit* and $erceived level o" C sales volume

+he top 8 prodcers

acti"e on themar&etaccont (ormore than0 o( the"olmes sold

To3 = AAC 3layers

T'rno&er )n

-11 8+)ll)onEUR9

AAC3rod'c()on

ca3ac)(y 8(ho'+J9

/CON-!I/COR 2AA >12 %2 units(R8) 15H /- %1 unit(C7CO 205 / %1 unit(P77 BH / %1 unit(!OCR/ 1KB :< %2 units(7RCO 202 :/ %1 unit(R8)RICT =!T 11A :: %1 unit(!O/CO <R; R8)RICT 20A -2 %1 unit(

!ource: Previous research, desk research update, @arketscope estimates, @inistr& of

#inance

)rie" $roFles o" most relevant market $la*ers in t#e C segment areoutlined below

@3< .>I@<;

wwwmaconro

%ey )ss'es

NTRRI! IN=!TOR! a olis# investment "und$urc#ased /CON in 200K "or H5 million ;R in 200 t#e "undalso $urc#ased t#e !I/COR <RO; "or w#ic# it $aid 5H million;R in !e$tember 200D t#e integration o" t#e two com$anieswas com$leted t#us creating t#e largest C $roducer on t#e


wwwmarketsco$ero H0

http://www.macon.ro/




@3< .>I@<;

wwwmaconro

market T#e grou$ #as A com$anies: /CON %$roduces C at

eva and Oradea and ot#er construction materials( !I/COR =R%$roduces lime at Targu iu( !I/)TON %$roduces rein"orced and$re-stressed concrete elements( and !I/TRC %$roduces tile at=adu Crisului(

In&es(+en(s

no large investments are $lanned on medium term but$revious investments @ 25 million ;R %200D( B5 million ;R%2010( and 25 million ;R %2011( @resulted in an increase in C$roduction ca$acit*

Ca3ac)(y

$roduction ca$acit*: C %B15000 mH $er *ear($re"abricated concrete $roducts %50000 mH $er *ear( lime %H0tons $er da*(

;E3www$re"abro

%ey )ss'es

Romanian ca$ital building materials $roducer besidesC it also $roduces $re"abricated concrete $roducts aggregatesand =C window s*stems

t#e com$an*3s $roduction "acilities are situated inCalarasi

main "ocus on !out#-ast region o" t#e countr* $roduction grew to over A00 t#ou mH o" C in *ear

2011 but turnover decreased

In&es(+en(s

lans "or investments in a cogeneration $lant inRomania and a new wall building material $lant in )ulgaria orRe$ublic o" /oldova

Ca3ac)(y

$roduction ca$acit* : C %a$$ro4 A20000 mH($re"abricated concrete $roducts %20000 mH(

E=<wwwcelcoro

%ey )ss'es

Romanian ca$ital com$an* t#at $roduces C and dr*mortars at its Constanta $lant and lime at Corbu %Constantacount*(

t#e com$an* underwent a restructuring $rogram allactivities unrelated to building materials #aving been $assed to anew com$an* @ <rou$

In&es(+en(s

t#e com$an* invested in a new s$ecial $lant "or Cad#esives %com$leted in 200B( and in a new lime $lant %a 20million ;R investment com$leted in 200(

Ca3ac)(y

$roduction ca$acit* is A00000 mH $er *ear "or C and


wwwmarketsco$ero H1


http://www.prefab.ro/

http://www.celco.ro/


http://www.prefab.ro/

http://www.celco.ro/



a ma4imum o" 500 tons $er da* "or lime

ME==3www*tongro

ME==3

www*tongro

%ey )ss'es

<erman grou$ entered t#e local market as im$orterand started o$erations at a new $roduction "acilit* in Romania in

*ear 200D in aulesti %ra#ova Count*( $rior to *ear 200D t#e com$an* #ad $lanned anot#er

$roduction "acilit* and acJuisitions o" local $roducers but due torestraining market conditions "urt#er investment activities #avebeen $ut on #old

in 200 P77 RO/NI claimed to #ave sold HA0000mH o" C %"urt#er to im$orts "rom t#eir )ulgarian and 'ungarian$roduction units(

P77 $lans to continue im$orts "rom )ulgaria or'ungar* "or logistic e+cienc* and lower costs

over 250 distribution $oints in Romania %including mostI> store c#ains(

In&es(+en(s

Investments in t#e $roduction "acilit* sum u$ to aboutH2 million ;R

Ca3ac)(y

local $roduction ca$acit* is A00000 mH $er *ear "orC

in *ear 2011 t#e $lant worked at about K0 - K5E o" itsca$acit* com$an* o+cials #o$ing to reac# "ull ca$acit* in t#e"ollowing *ears de$ending on market demand

><E;3@wwwsoceramro

%ey )ss'es

t#e com$an* %controlled b* /T7;RO!T and 7!I TIT; @ Romanian s#are#olding( $roduces bot# C and bricks dr*mortars ad#esives and metal $roFles

it #as t#ree $roduction $lants at oicesti %ambovitacount* C and bricks $roduction units( )ucov %ra#ova count*C( and ;r,iceni %Ialomita count* bricks( t#e )ucov and;r,iceni $lants are currentl* closed due to low demand and "ormodernisation as well

anot#er brick $roduction unit %Tandarei $lant Ialomitacount*( is intended to be sold a"ter t#e com$an* also sold t#e

brick "acilities in )ucovIn&es(+en(s

20 million ;R investment in new brick $roduction linecom$leted at oicesti

ambitious investment $lan wort# 150 million ;R "orconstruction o" nine new $roduction units %seven C $lants andtwo brick $lants( was $ut on #old due to di+cult marketconditions #owever a 20 million ;R investment in an C $lantin Roman %Iasi Count*( is due to be com$leted in *ear 201H

Ca3ac)(y


wwwmarketsco$ero H2

http://www.ytong.ro/


http://www.soceram.ro/



http://www.soceram.ro/



$roduction ca$acit*: C %HK0000 mH Q *ear( bricks%H50000 mH Q *ear(

E=;E<wwwel$recoro

%ey )ss'es

t#e com$an* was boug#t in earl* 200 b* t#e Iris#

construction materials grou$ CR' t#e value o" t#e transactionestimated at around B0 million ;R t#e com$an* #as two $roduction units in Craiova and

in Titu %ambovita count*( and $roduces C dr* mortarsconcrete roo" tiles $avers $re"abricated concrete $roducts

In&es(+en(s

in *ear 200D t#e com$an* invested 5 million ;R inmodernisation and maintenance o" current $roduction lines

Ca3ac)(y

C $roduction ca$acit* o" HA0000 mH %wit#in Craiova$lant(

;E3;I3+ E 7E>+

www$vro

%ey )ss'es

t#e com$an* is located in )uc#arest and $roducesC $avers and ot#er small-dimension $re"abricated concrete$roducts

some s$eculation #as been made regarding com$an*3sbu*out

In&es(+en(s

an investment $rogram was started in 200B wit# t#etarget o" en#ancing $roduction ca$acit* b* H0E %to aroundA50000 mH(

Ca3ac)(y

current C $roduction ca$acit* e4ceeds HH0000 mH $er *ear %no clear data on w#et#er t#e a"orementionedinvestment #as been com$leted or not(

><@3<:;?

;E3;I3+ E

wwwsomacoro

%ey )ss'es

OR! =NT;R! a !wedis# investment "und boug#tin 200 t#ree $roduction units %)u,au Roman and d.ud( and t#eM!omaco brand "rom !O/CO %t#e "ormer !omaco eventuall*was renamed !/C R8)RICT NTR; CON!TR;CTII( "or H25million ;R re-establis#ing t#e com$an* as !O/CO <R;

R8)RICT t#e com$an* $roduces $re"abricated concrete $roducts"or civil or industrial use %es$eciall* $oles beams tubesstructural elements( "or in"rastructure %bridge elements electric$oles( and C

In&es(+en(s

according to t#e com$an*3s investment $rogram -10million ;R will be allocated in t#e ne4t "our *ears "or tec#nicalre"urbis#ment modernisation and eJui$ment

Ca3ac)(y


wwwmarketsco$ero HH

http://www.elpreco.ro/

http://www.pv.ro/

http://www.somaco.ro/

http://www.elpreco.ro/

http://www.pv.ro/

http://www.somaco.ro/



$roduction ca$acit* $er *ear: C %250000 mH($re"abricated concrete $roducts %K0000 mH(

)ricks

"r)cks +arke(s)De

)ricks consum$tion registered an increased *-o-* growt# in t#e 2002 -200 $eriod %over 10E in all *ears and over 20E in *ears 200A 200Kand 200B( )ricks consum$tion in Romania reac#ed almost 2D millionmY in 200 increasing b* 12E in volume as com$ared to t#e $revious*ear des$ite a slide in ?A 200 In value terms t#e main com$etitorson t#e market estimated it at around 2H0 - 250 million ;R in t#eres$ective *ear

"ter a s#ar$ decrease in 200D %over H0E in volume( consum$tioncontinued to dro$ but in a lower and more stable $ace 8or *ear 2012o$timistic scenarios estimate t#e market volume at t#e same level ast#e one in t#e $revious *ear

"ter t#e economic recession $eriod ends t#e construction sector ise4$ected to grow b* two-digit values again t#us .usti"*ing t#e intent o"local $roducers to continue t#eir investments in ca$acit*en#ancements

@oredynamichistoricalgrowth (orthe !ric&smar&et ascompared to

33

!ource: Previous research, @arketscope estimates, desk research update


wwwmarketsco$ero HA



Marke(3layers

Out o" t#e main 15 main brick $lants seven #ave ca$acities over100000 mY t#ree o" t#em are controlled b* t#e single ma.orinternational $la*er active on t#e market namel* &INR)R<Rw#ic# seems to be t#e leader in t#e segment T#e table below outlinest#e to$ 5 $la*ers on t#e bricks market based on turnover $roductionca$acit* and $erceived level o" brick sales volume

+op 5 playershold o"er60 o( !ric&ssales"olmes#JIEE;E;:E; also sells!ric&simported(rom own

plants inneigh!oringcontries)

To3 2 "r)ck 3layersT'rno&er )n

-11 8+)ll)onEUR9

"r)cks3rod'c()on

ca3ac)(y 8(ho'+J9

&INR)R<R 2BD << %H units(

CR/IC I!I 1K2 :>0/- %1unit(

C/CON K5 :2 %1 unit(!OCR/ 1KB :2 %2 units(!ICR/ 1HH -2 %1 unit(

!ource: Previous research, desk research update, @arketscope estimates, @inistr& of#inance

T#e $roFles o" ke* market $la*ers in t#e bricks segment are outlinedbelow

JIEE;E;:E;

wwwwienerbergerro

%ey )ss'es

t#e local subsidiar* o" t#e ustrian-based leading$la*er on t#e international market o" wall building materials t#ecom$an* $roduces ceramic bricks "acing bricks and $avers

o$erates t#ree $roduction units: <ura Ocnitei inambovita count* %o$ened in 200A( !ibiu %acJuired in 200A andre"urbis#ed t#roug# a 1 million ;R investment( and Tritenii de

os in Clu. count* %a greenFeld investment o" 25 million ;RFnalised in 200( &INR)R<R also #as t#e $ossibilit* o"su$$lementing its oer t#roug# im$orts "rom $roduction unitsabroad

currentl* two out o" t#e t#ree $roduction units %<uraOcnitei and Tritenii de os( are s#ut down due to low demand

a$$ro4imate market s#are in *ear 2011 was H5E%based on own estimates(

In&es(+en(s

t#e grou$3s medium term $lans "or Romania be"ore t#ecrisis included investments o" 100 million ;R in acJuisitionsgreenFeld $ro.ects etc but due to di+cult market conditions

most investments #ave been $ut on #old in 2012 t#e com$an* began set u$ o" "ourt# $lant at

Ra,boieni %Iasi Count*(

Ca3ac)(y

current overall ca$acit* o" all t#ree $lants is aroundK00000 mH annuall*

E;3@I3I3>I

wwwceramica-

%ey )ss'es

CR/IC Iasi was boug#t in 200B b* t#e merican$rivate eJuit* "und =NT INTRNTION7 "or 22H million ;R


wwwmarketsco$ero H5

http://www.wienerberger.ro/


http://www.ceramica-iasi.ro/






iasiro

wwwbrikstonro

com$an* o+cials claim to #ave sold HBH000 mH o"bricks in *ear 2011 increasing market s#are to about 20E %"romKE in *ear 200(

distribution covers over H5 counties in Romania

In&es(+en(s

AK million ;R investments in ca$acit* en#ancementon t#e Iasi $lant $lat"orm and t#e construction o" a new$roduction $lant %initiall* due in 2010( resulting in a total$roduction ca$acit* o" AK0000 mH

t#e latter stage o" t#e $lan %t#e new $roduction "acilit*(#as been $ut on #old due to lack o" Fnancing

Ca3ac)(y

current $roduction ca$acit* is over H50000 mH $er*ear

E@3<

wwwcemacon,alauro

%ey )ss'es

t#e Romanian bricks $roducer underwent a com$le4restructuring and investment $rocess wit# closing old $roductionline at alau and kee$ing t#e new $roduction "acilities at Recea%)aia /are Count* "unctioning since 2010(

market s#are o" around 12 - 1HE in *ear 2011 %t#ird$lace on t#e local market based on own estimates(

"ocuses on becoming t#e to$ bricks su$$liers in Trans*lvania region %b* volume(

In&es(+en(s

investments between 200B and 2012 o" about 2million ;R consisting in a new Juarr* and cla* $re$aring line

%Frst stage( and a new bricks $roduction line %second stage( t#et#ird stage will enable t#e "actor* to work in t#ree s#i"ts

Ca3ac)(y

current bricks $roduction ca$acit* %Recea $lant( o"H50000 mH $er *ear %B0E working ca$acit* in *ear 2012(

>IE;3@wwwsiceramro

%ey )ss'es

Romanian ca$ital com$an* t#at $roduces ceramicbricks and roo" tiles

abandoned t#e $lan to invest million ;R in a newbricks $roduction $lant due to di+cult market conditions

In&es(+en(s

a 1K million ;R investment was com$leted in 200:t#e construction o" a ceramic roo" tiles $roduction "acilit*

Ca3ac)(y

$roduction ca$acit* o" 250000 mH $er *ear "or bricksand 50000 m2 $er *ear "or ceramic roo" tiles

)ricks and C - roduct range geogra$#ical coverage and


wwwmarketsco$ero HK


http://www.brikston.ro/

http://www.cemaconzalau.ro/


http://www.siceram.ro/


http://www.brikston.ro/



http://www.siceram.ro/



$ricing

=arge"ertically per(orated

!ric&s#%ceramic!loc&s') ha"e!ecome themain !ric&(ormat

C and bricks are $roduced in various "ormats T#e diversit* o"$roducts is more signiFcant on t#e bricks market as variations o" Care limited to around 5 main "ormats

C "ormat K0L20L25 cm a$$ears to be t#e most common accountingmore t#an a t#ird o" t#e market volume !maller "ormats wit# lowerwidt# used "or insulation %interior walls( #ave limited usage

=erticall* $er"orated bricks dominate bricks sales w#ile solid bricks arecurrentl* seldom used due to obvious disadvantages in terms o" $riceand work involved in usage

'owever bricks market structure is more "ragmented in terms o" used"ormats due to various tec#nological endowments o" t#e numerous$lants T#e new investments are "ocused on $roduction o" cost-eectivelarge "ormats but signiFcant variations e4ist "rom one $roducer toanot#er

T#e main brick "ormat marketed b* man* $la*ers and still $o$ular int#e market is M<= 2DL2AL1A cm accounting a F"t# o" t#e usedvolumes Ot#er larger "ormats wit# signiFcant sales #ave lengt# aroundHK@H cm and variations o" widt# and #eig#t

oncentration o( wall!ildingmaterialssales

T#ere is a concentration o" bricks usage in t#e nort#ern and western$art o" t#e countr* w#ile C sales are #ig#er in t#e sout# and east T#is is mainl* generated b* t#e geogra$#ical $lacement o" $roduction$lants but in $art is also caused b* regional $re"erences o" consumers Qusers and $lace o" residence %ruralQurban(

)uc#arest and its outskirts account roug#l* 15E o" total C and bricksvolumes used in t#e Romanian market

Pr)c)n C and bricks are substitutable $roducts eac# wit# $ros and cons;ntil recentl* $rice was one o" t#e main reasons "or c#oosing C asbricks were on average 20E more e4$ensive resentl* $rices #averelativel* reac#ed t#e same level

istributor $rices $er mH were situated in 200 around an average o"B5-D5 ;R "or C and 0-100 ;R "or bricks #ig#er b* 10E t#an$rices registered in 200B 'owever towards t#e end o" 200 t#ereduced demand and roug# conditions in t#e market determined$roducers to lower t#eir $rices wit# as muc# as 25E T#e calculation o"

average $rices in 200D were in6uenced b* discounts and t#e o$inion o"most $la*ers is t#at t#e di+cult $eriod determined lower $rices t#an in$revious *ear even b* 10-15E %due to accumulated stock(

T#e $rices decline in t#e 200D-2011 $eriod mi4ed wit# "all o" soldvolume caused a signiFcant contraction o" t#e local wall buildingmaterials market In *ear 2010 average $rices $er mH were around K5-B0 ;R "or bot#bricks and C rices continued to decrease in *ear 2011 $la*erscom$laining t#at consumers seemed to $ut $rice over Jualit* !cenarios


wwwmarketsco$ero HB



"or *ear 2012 indicate t#at $rices "or bot# bricks and C will remain atsimilar levels or will increase wit# about 5-10E due to growing costs o"raw materials and "uel lso wit# increase o" $urc#asing $ower local$roducers e4$ect consumers to "ocus on #ig#er Jualit* $roducts


wwwmarketsco$ero H



!teel

Iron and s(eel

*ore)n (radeand local3rod'c()on

;omaniaremains a net eFporter o(raw steel

!ource: Previous research, desk research update, @arketscope estimates

&it# demand on t#e local market strongl* declining in *ear 200De4$orts became t#e sole c#ance o" survival "or ma.or steel $roducers inRomania conomies still develo$ing in s$ite o" t#e crisis suc# as Turke*and some sian countries ke$t t#e steel e4$orts "rom Romania at areasonable level and $revented "actories "rom o$erating massiveem$lo*ee dismissals and restructuring

!ource: 0'R5!%A%


wwwmarketsco$ero HD



Ra6 s(eelcons'+3()ones()+a()onand *orecas(

)ased on available statistics and recent market u$dates o" ke*com$etitors and users t#e overall steel consum$tion in Romania isestimated at H5 @ A million tons wit# e4$ectations o" a slig#t u$wardtrend in t#e 201H @ 2015 time"rame 'owever it is wort# mentioningt#at Romanian $roduction o" steel ma* "ollow more accuratel* t#e

trends in t#e "oreign markets rat#er t#an t#ose o" t#e local demandgiven t#e large volumes o" e4$orted steel

Pr)c)n 4$ort $rices "or steel went "rom 500 ;R $er ton in $eak *ear 200 toaround H50;R $er ton in t#e "ollowing *ear and reac#ed again t#e 500 ;R markin *ear 2011 On t#e ot#er #and average $rices in t#e local marketseem to #ave witnessed several u$s and downs in t#e anal*,ed $eriodw#ic# even lead to a new decrease b* t#e end o" *ear 2011

%ey

co+3e()(ors

!teel market in Romania is dominated b* two grou$s: RC7OR/ITT7

and /C'7

3;E=<;@I++3= is thes!sidiary o(the leadinginternationalgrop thattoo& o"er the(ormer >IEM (actory

ARCEOR MITTA

T#e grou$ o$erates A main "actories in Romania t#roug# severalcom$anies including RC7OR /ITT7 <7TI %t#e main steel"actor* on t#e "ormer !IP $lat"orm( /C %constructionmaterials division t#at is brie6* $roFled in a "urt#er section o"t#is re$ort( RC7OR /ITT7 T;);7R RO;CT! and /T

Turnover o" t#e <alati $lant e4ceeded 1 billion ;R in *ear 2011but is still well below t#e $eak level in *ear 200 %around 2billion ;R(

RC7OR /ITT7 #as been one o" t#e to$ H e4$orters "romRomania in $re-crisis *ears but t#eir $osition got weaker "romt#is $oint o" view "urt#er to t#e eects o" global decrease in steeldemand %t#e com$an* remains wit#in to$ 10 e4$orters t#oug#(

;ssiangropoperates 5(actories in;omania

MECHE

T#e grou$ o$erates 5 $lants in Romania namel* /C'7 Targoviste /C'7 Cam$ia Tur,ii 7/INOR;7 )raila ;CTI7!T7 )u,au and ;CTI7 !T7 Otelu Rosu

/ain $roducts include steel and "erroallo*s wires and bars Revenues o" main $lant %in Targoviste( are estimated at over 200

million ;R in *ear 2012 diminis#ing b* 15 @ 20E as com$aredto $revious *ear

T#ere are recent rumours t#at Romanian o$erations are "or salein order "or t#e grou$ to be able to cover a $art o" t#e debt atinternational level @ it is estimated t#at t#e "our $lants are wort#100 million ;R


wwwmarketsco$ero A0



RooFng solutions and structural elements

Roo" tiles %metallic ceramic concrete bituminous(

Marke(o&er&)e6

T#ere are several rooFng solutions used on t#e Romanian market:metallic tiles and $roFled s#eets concrete tiles bituminous andFbreglass s#ingles roo" ceramic tiles corrugated bituminous rooFngwood s#ingles and to some e4tent as$#alt cardboard Out o" t#esealternatives metallic tiles concrete tiles ceramic tiles bituminouss#ingles and corrugated rooFng are $re"erred

T#e rooFng market "ollowed closel* t#e d*namic o" t#e overallconstruction market wit# signiFcant growt# during t#e 200A - 200$eriod and a slum$ in *ear 200D In recent *ears t#e market seems to#ave remained at levels com$arable to *ear 200D wit# *-o-* variationso" -QG 5 - 10E T#e market registered somew#at dierent d*namics "oreac# com$onent segments wit# metallic tiles #aving t#e largestgrowt# and is currentl* dominated b* international $la*ers w#ic# c#oseto make large investments in local $roduction ca$acities during t#eMboom $eriod t#us reducing im$orted Juantities

Marke( s)Deandse+en(a()on

T#e market "or rooFng solutions registered ra$id growt# rates during$re-crisis *ears due to t#e real estate boom and to t#e increase innumber o" local $la*ers or im$orters o" rooFng solutions: ma.ore4$ansion in t#e 2005-200B $eriod %over H0E *-o-* growt#( anda$$ro4imatel* 15E increase in *ear 200

T#e rooFng market declined b* an a$$ro4imatel* HAE in *ear 200D %b*volume( being #indered es$eciall* b* t#e general economic conditionson t#e Romanian market t#at aected t#e consumers3 $urc#asing$ower: Fnancial insecurit* credit blockage etc >ear 2010 was markedb* onl* a slig#t decline o" t#e market

In *ear 2011 t#e rooFng solutions business registered a slig#t increase%about 10E( reac#ing a$$ro4imatel* 125 million ;R in value and 25million m2 in volume wit# t#e metallic tiles segment dominating bot# b*value and b* volume la*ers $redict anot#er decline in *ear 2012 %o" 5-10E( in $art due to $olitical instabilit* %according to recent statementso" $la*ers in t#e market(

large $art o" demand seems to be re$resented b* renovation $ro.ectslack o" new $ro.ects aecting t#e sector 'owever t#ere seems to be agrowing number o" recentl* started construction $ro.ects "or industrialand agro-industrial sectors %$roduction #alls ware#ouses "arms etc(

T#e nort#ern #al" o" t#e countr* and )uc#arest seem to #old t#econcentrations o" demand in t#is sector

Regarding seasonalit* autumn season seems to be t#e most d*namic$eriod "or t#e rooFng solutions market


wwwmarketsco$ero A1



@etallic tileshold thehighest sharein roo( sales

>ales o( main rooGng soltions in ;omania #million E?;)

>egments -= -1 -1-G/etallic tiles D 5B K1Concrete tiles 2B 1H 1HCeramic tiles 2 21 21)ituminous s#ingles D A A)ituminous corrugatedrooFng 25 1K 11

TOTA 1BB 111 110!ource: Previous research, desk research update, @arketscope estimates

T#e metallic tiles segment continues to clearl* dominate t#e marketwit# t#e ceramic and concrete tiles segments in second and t#ird $laceres$ectivel* s com$ared to *ear 200 t#e concrete tiles andbituminous corrugated rooFng segments lost market s#are to t#emetallic tiles segment %w#ic# #ad 55E in *ear 2011( w#ile t#e ceramictiles segment ke$t its market s#ares "airl* at t#e same level %1DE(

Co+3e()()&een&)ron+en(

7ocal $roduction is dominant since international $la*ers switc#ed too$erating own $roduction "acilities in Romania T#ere are a$$ro4 K0Mtier 1 su$$liers %including im$orters( on t#e rooFng market andalt#oug# some o" t#e segments are "ragmented in eac# t#ere is agrou$ o" large com$etitors #olding t#e bulk o" sales

@etallic tiles e* $la*ers: IN#A" 8)ncl'd)n ROVA97 ME$APROFI7 RUU%%I7ARCEOR MITTA CONSTRUCTION7 COIPROFI7 VI%IN$ PROFI7

#EPACO7 PANN!A7 FINA #ISTRI"UTION7 ICOPA7 I#ER PUS

T#is segment #as been t#e most d*namic amongst t#e rooFngalternatives and is still e4$ected to register large growt# rates in t#e$ost-crisis *ears %market $otential still allows annual growt# o" 20-H0E(Investments in $roduction "acilities made t#is segment morecom$etitive but also more "ragmented %it is estimated t#at t#ere are H0$la*ers on t#e metallic tiles segment wit# A - 5 covering #al" o" t#edemand( T#e most im$ortant $la*ers o" t#is segment are localsubsidiaries o" international $la*ers t#at c#ose to #eavil* invest in$roduction "acilities in Romania so as to better cover local and regional


wwwmarketsco$ero A2



demand

T#e ra$id increase in t#e number o" $la*ers is due to t#e "act t#atentering t#e metallic tiles segment is relativel* eas*: t#e investment ineJui$ment needed "or a small metal $roFles $roduction unit is o" onl*25 - H0000 ;R %eJui$ment im$orted "rom C#ina( and onl* medium

si,ed investments reJuire A00000 to 1 million ;R 'owever smallcom$anies wit# no Fnancial strengt# to wit#stand a contracting marketwere "orced to close down t#eir business %tem$oraril* or even$ermanentl*( during t#e Fnancial crisis $eriod

oncretetiles

e* $la*ers: "RAMAC7 EPRECO7 MACON7 IMCOP

T#ere are "ew s$ecialised $roducers o" concrete tiles most o" t#em#aving as main $roducts ot#er cement-based construction materialsand $re"abs 7ocal $roduction "acilities cover almost t#e entire demand%im$orts account "or a ma4imum o" 10E o" t#is segment according torecent estimations(

;oo( ceramictiles

e* $la*ers: TON#ACH7 SICERAM7 CARS TARNAVENI7 CERAMICAIASI

T#e ceramic tiles segment registered a comeback a"ter t#e investmentsmade in new tec#nolog* w#ic# lead to less e4$ensive and Jualit*com$etitive $roducts Consum$tion is still mostl* covered t#roug#im$orts %about two t#irds o" t#e total roo" ceramic tiles consum$tion(but t#e ratio is e4$ected to somew#at balance itsel" in t#e "ollowing*ears

itminosshingles and

corrgated rooGng

e* $la*ers: TE$OA7 I%O7 ON#UINE7 $UTTA7 %ERA"IT7%OVERTECH

T#ere are no large local $roducers o" bituminous s#ingles or corrugatedrooFng solutions t#ere"ore consum$tion is covered mostl* b* im$orts

F)nanc)al res'l(s *or (he (o3 3layers on (he rooBnC

sol'()ons +arke( 8+)ll)on EUR9

B2

K

5B

102

1

200

2K5

1D5

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>.>

;.;

11.<

-1.-

->.=

-;.>

0 5 10 15 20 25 H0 H5

rcelor/ittal Construction

Tondac#

Coil$roFl

)ramac

=iking$roFl

7indab

/ega$roFl

Ruukki

Turnover 2011

Turnover 2010



wwwmarketsco$ero AH



9According to the compan&

T#e most im$ortant $la*ers on t#e overall rooFng market are $resentedbelow

;??I

wwwruukkiro

;??Iwwwruukkiro

• !ubsidiar* o" t#e 8innis# grou$ R;TR;;I $resent in

Romania t#roug# t#ree divisions @ MConstruction Mngineering andM/etals• T#e com$an* Fnis#ed in 200 a H5 million investment in a $lant

at )olintin-eal %<iurgiu count*( wit# t#ree $roduction "acilities:metallic rooFng $roFles metallic structures t#ermo-insulating$anels t#e $lant3s ca$acit* is o" 12 million linear metres o" metallic$roFles and 1 million m2 o" t#ermo-insulating $anels

• In 200D a $art o" t#e eJui$ment "rom t#e grou$3s $roduction"acilities in C,ec# Re$ublic and 'ungar* were relocated in t#e $lantat )olintin-eal

• T#e com$an*3s oer includes metallic tiles and accessorieswater drainage s*stems metal $roFles "or roo" and wall claddingstructural and "aZade casings t#ermo-insulating $anels %wit#$ol*uret#ane mineral wool or $ol*st*rene insulation( metalstructures "or industrial or road construction

• bout H0E o" $roduction in 2011 was e4$orted %mostl* tocountries suc# as 7it#uania C,ec# Re$ublic !lovakia )ulgaria!erbia 'ungar* Croatia $lus !audi rabia in 2012 (

• !tructure o" sales on t#e local market "or metallic tiles in 2011:b* destination - 0E "or renovation $ro.ects b* $rice @ $remium$roducts re$resented 22E o" sales w#ile medium $riced $roductsre$resented t#e bulk o" t#e sales

• Own estimates re$ort t#at t#e com$an* increased its markets#are in 2011

• $$ro4imatel* 50E increase in turnover in 2011

@E:3;<I=wwwmega$roFlr

o

• T#e com$an* is $art o" t#e )elgian grou$ ORI! I and #ast#ree $roduction $lants %wit# 1A $roduction lines( at )u,ias %Timiscount*( )ucov %ra#ova count*( and Iasi

• roduct range includes metallic tiles and roo" accessoriest#ermo-insulating $anels %wit# $ol*uret#ane insulation( metal$roFles "or roo" and wall cladding galvanised $roFles

=I3wwwlindabrowwwastronro

• T#e com$an* is t#e local subsidiar* o" t#e #omon*mous !wedis#grou$ and #as two divisions @ MroFles and M=entilation @ $lus!TRON );I7IN<! a com$an* t#at delivers metallic solutions "orindustrial buildings

• 7IN) o$erates a $roduction $lant at !te"anestii de os %Il"ovcount*( t#e $lant can $roduce u$ to H5 million m2 o" metallic tilesH2 million m2 o" metal $roFles 1 million m2 o" structural casings and1 million linear meters o" circular ventilation tubing $er *ear

• T#e com$an* also o$erates a $lant at 8loresti %Clu. count*( wit#0 million linear meters o" circular ventilation tubing $er *ear

• 7IN) boug#t in 200 t#e !IO< <RO; a !lovakian $roducero" rooFng solutions and wall cladding $roducts "or 2A5 million ;Rt#e Romanian subsidiaries o" !IO< are re$resented b* t#ecom$anies RO= %wit# a roo" s*stem $roduction $lant at !ibiu( and=IO! in une 200D RO= undertook =IO!3 o$erations "ollowed in


wwwmarketsco$ero AA

http://www.ruukki.ro/


http://www.megaprofil.ro/


http://www.lindab.ro/

http://www.astron.ro/





http://www.lindab.ro/

http://www.astron.ro/



November b* t#e decision o" integrating RO= wit#in 7IN)3so$erations under a sole economical unit %t#e brands RO= and =IO!coe4ist wit# 7IN)3s(

• T#e com$an*3s oer includes: metallic tiles and accessorieswater drainage s*stems metal $roFles "or roo" and wall cladding"aZade and structural casings garage and industrial doors

construction "rames• ccording to own estimations t#e com$an* #as a B5E s#are in

t#e rooFng solutions market and 1AE s#are in t#e metallic tilesmarket

7II:;<I=

wwwvk$ro

• T#e com$an* was "ounded in *ear 2005 as a local metallic tiles$roducer and was boug#t in 200 b* t#e olis# grou$ )7C'>R;!>N!I

• T#e international grou$ invested more t#an K million ;R on t#elocal market %mostl* "or re"urbis#ing or e4$anding $roduction"acilities(

• T#e com$an* #as $roduction "acilities at 8ili$estii de adure

%ra#ova count*( and Craiova %ol. count*( but $lans to e4$and its$roduction ca$acit*

• istribution network includes over 200 collaborators most salesare in t#e Nort#-ast !out# and !out#-ast regions o" Romania

• !tudies estimate t#e com$an*3s market s#are at around 10E "ort#e metallic tiles segment

• $$ro4imatel* A5E increase in turnover in *ear 2011

;3@3wwwbramacro

• T#e local subsidiar* o" t#e ustrian rooFng s*stems $rovider%owned b* 78R< and &INR)R<R( entered t#e Romanianmarket in 200A t#roug# a MgreenFeld investment at !ibiu wort# 5million ;R its current $roduction ca$acit* is o" 1H million tiles $er

*ear• )R/C is t#e Frst rooFng solution $rovider to introduce solar

$anels s*stems on t#e Romanian market %im$orts "rom ustria(• t#e com$an*3s $roduct range includes concrete tiles and

accessories water drainage s*stems and solar $anels

<I=;<I=wwwcoil$roFlro

• T#e local subsidiar* o" t#e #omon*mous )elgian grou$COI7RO8I7 #as a $lant at Ce$tura %ra#ova count*(

• A million ;R investment was com$leted in 200B resulting innew $roduction ca$acities "or t#ermo-insulating $anels %wit# mineralwool or $ol*st*rene insulation( and "aZade casings

• T#e com$an*3s oer includes metal $roFles "or roo" and wall

cladding t#ermo-insulating $anels %wit# mineral wool or $ol*st*reneinsulation( structural and "aZade casings galvanised $roFlesmetallic tiles and accessories water drainage s*stems

+<3Hwwwtondac#ro

• T#e ustrian com$an* entered t#e Romanian market in 200Ht#roug# t#e acJuisition o" a ceramic tiles $roduction "acilit* in !ibiu

• T#e current $roduction ca$acit* is o" 12 million tiles $er *ear t#ecom$an* su$$lements its stock "rom its 'ungarian "actories

• TONC'3s oer includes ceramic tiles and accessories

3;E=<; • T#e com$an* is $art o" t#e RC7OR /ITT7 grou$ and #as t#ree


wwwmarketsco$ero A5

http://www.vkp.ro/

http://www.bramac.ro/

http://www.coilprofil.ro/

http://www.tondach.ro/

http://www.vkp.ro/

http://www.bramac.ro/

http://www.coilprofil.ro/

http://www.tondach.ro/



@I++3=<>+;?+I

< #3@)wwwarmatro

wwwarval-constructionro

wwwarcladro

divisions @ R/T RC7 and R=7 /C3s Romanian "actoriesalso e4$ort t#eir $roducts on t#e )ulgarian and ;krainian markets%in 200D t#e com$an* e4$orted in )ulgaria as muc# as H0E o" its$roduction(

• /C Fnis#ed in 200 a 10 million ;R investment in a$roduction unit in antelimon %Il"ov count*( t#e $lant3s ca$acit* is o"

2 million m2 $er *ear: metal roo" s*stems metallic "rame structurest#ermo-insulating $anels

• T#e com$an* #as made recent investments in increasing its own$roduction ca$acit*: a new $roduction units in Iasi and en#ancemento" t#e antelimon $lant3s ca$acit*

• T#e com$an*3s oer includes metallic tiles and accessorieswater drainage s*stems metal $roFles "or roo" and wall claddinggalvanised $roFles "aZade casings t#ermo-insulating $anels %wit#$ol*uret#ane or mineral wool insulation( industrial construction"rames

+E:<=3wwwtegolaro

• T#e com$an* is t#e sales re$resentative o" T<O7 CN!

%Ital*(• T<O7 im$orts on t#e Romanian market bituminous s#ingles

and accessories bituminous s#ingles wit# $#otovoltaic cellscorrugated $lates water drainage s*stems $l*wood O!) '$rotective s*stems #*dro-insulating and t#ermo-insulating s*stems

<ther players • PANN!A a metal rooFng solutions $rovider started in *ear200D a D million ;R investment $rogramme wit# a $roduction"acilit* in Racaciuni %)acau count*( t#e "acilit* is $ro.ected to #avet#ree $roduction lines: two "or industrial metal s#eet $roFles andone "or metal roo" tiles ot#er investment ob.ectives are t#edevelo$ment o" t#e com$an*3s logistic s*stem and ware#ousingca$abilities

• #EPACO initiall* a distributor o" metallic rooFng s*stemsbecame a $roducer a"ter a 2K million ;R investment in a$roduction $lant at )aicoi %ra#ova count*( subseJuentinvestments were made in eJui$ment and t#e develo$ment o" t#ecom$an*3s sales network

• FINA #ISTRI"UTION is an im$orter o" rooFng solutions and aleader on t#e stone coated steel rooFng segment on t#e localmarket t#e com$an* is an e4clusive im$orter o" t#e "ollowingbrands: <erard %'I ROO8IN<( @ stone coated steel rooFng solutionselta %ORN( @ roo" and "oundation membrane e*lite%>!TON <RO;( @ dormer windows t#e com$an* started$roduction o" rainwater collection s*stems in 200 and later in

2012 o" com$lete rooFng solutions %metal tiles drainage s*stemsanti-condensation s#eets( under t#e Novatik brand• CERAMICA IASI %traditional wall building bricks $roducer(

abandoned ceramic tiles $roduction starting wit# 200D due to $oorresults registered on t#e segment but com$an* o+cials declared in2011 t#at t#e* intend to resume $roduction

!tructural elements

Marke( T#e market "or structural elements consists o" $re"abricated concrete


wwwmarketsco$ero AK

http://www.armat.ro/

http://www.arval-construction.ro/


http://www.arclad.ro/

http://www.tegola.ro/

http://www.armat.ro/



http://www.arclad.ro/

http://www.tegola.ro/



o&er&)e6 building com$onents structural metallic "rames and cladding solutions T#ese $roducts are designed es$eciall* "or commercial industrial orin"rastructure construction and #ave t#e advantage o" a Juickassemblage t#is makes t#em an ideal construction solution consideringt#e conditions in t#e construction sector: t#e lack o" JualiFed workersand s#ort deadlines made t#e demand "or Juick assembling building

$roducts to grow considerabl* in recent *ears


T#e economic crisis aected t#e sector more t#an antici$ated: t#econstruction o" new commercial $remises declined %also $artl* due tosaturation "or t#is t*$e o" "acilities in some areas( but t#e eects o" t#ecrisis %risk o" non-$a*ment di+cult* in Fnancing( aected even t#econstruction o" logistic centres t#e onl* segment w#ic# was e4$ectedto continue to grow in 200D

uring *ears 200D and 2010 t#e construction sector seems to #ave

"ocused on in"rastructure works >ear 2011 was marked b* a slig#tdecline w#ile 2012 is e4$ected to be a *ear o" stabili,ation or recover*on t#e market 'owever in s$ite o" t#e overall market decline it seemssome large $la*ers re$orted increase in business in 2011 due to growt#in demand "or new construction in t#e industrial and agriculture sectorsinvestments in enlargements o" $roduction "acilities absor$tion o" t#emarket s#are "rom smaller $la*ers e4iting t#e market and e4$orts

'owever t#e demand "or t#ese $roducts will continue to grow onceeconom* e4its crisis as t#ere still is s#ortage in logistic and commercialcentres and a need "or modern industrial "acilities in Romania

re(a!ricated concrete!ilding

components

To$ $la*ers: ASA CONS7 ER$ON CONCRETE INTERNATIONA7PRE"ET7 MACON7 PREFA"7 EPRECO

/ost large $la*ers on t#is market are $roducers o" cement-based$roducts wit# ot#er $roducts as t#eir core business @ "or e4am$le C@ but t#ere also are s$eciali,ed $roducers %numerous com$anies butwit# small $roduction ca$acities(

ower"ul $la*ers in t#e contracting business took interest in t#issegment %s#own b* im$ortant investments in local $roduction "acilitiesmade b* large scale international $la*ers( as t#e* believe t#e demand"or t#ese $roducts will grow e4$onentiall*: a tri$ling in consum$tion in


wwwmarketsco$ero AB



$ost-crisis *ears

@etallic!ilding

componentsand other

• metallic structures @ IN#A"7 ARCEORMITTA CONSTRUCTION7

RUU%%I• metal $roFles @ ME$APROFI7 IN#A"7 ARCEOR MITTA

CONSTRUCTION7 RUU%%I7 COIPROFI7 SOCERAM• structural casings @ IN#A"7 ARCEORMITTA CONSTRUCTION7

RUU%%I• t#ermo-insulating $anels @ ME$APROFI7 ARCEORMITTA

CONSTRUCTION7 RUU%%I7 COIPROFI7 PASTSISTEM

gain $la*ers on t#is segment #ave a diversiFed $ort"olio #owevermost o" t#em are s$ecialised in $roviding metal-based solutions "orconstruction %aside "rom structural elements and cladding solutionst#e* oer metallic rooFng solutions(

International $la*ers now dominate t#e structural elements segment:a"ter being $resent on t#e market as sales re$resentatives "or several*ears t#ese com$anies decided to invest in local $roduction "acilities

due to t#e market3s great $otential T#e metal-based constructionmaterials submarket will continue to grow %during economic stabilit* in$ost-crisis *ears increases o" 20-H0E are e4$ected b* market $la*ers(due to investments in commercial and industrial $remises and growingusage wit#in residential develo$ments

"r)e* 3roBleso* key +arke(3layers

6ote3 %his section will onl& include market pla&ers whose pro"les werenot presented in other sections of the report3

3>3 <>wwwasaconsro

• t#e com$an* is t#e Romanian subsidiar* o" t#e 'ungarian$roducer ! 8T t#e ! grou$ was boug#t in 200 b* t#e

8innis# grou$ CON!O7I! one o" t#e largest $la*ers on t#e$re"abricated concrete building com$onents market• its $roduction $lant is situated in Turda %Clu. count*( and #as a

ca$acit* o" HD500 mH o" $re"abricated com$onents $er *ear• t#e com$an*3s $roduct oer includes $ocket "oundations $illars

beams rein"orced concrete 6oors industrial 6oors• ('rno&er 8-119@ 1-.> +)ll)on EURK

E;:<<;E+E

I+E;3+I< 3=

wwwergon-

internationalcomQro

• t#e Romanian subsidiar* o" t#e #omon*mous )elgian com$an*%w#ic# is t#e $re"abricated concrete $roducts division o" CR'grou$( invested 15 million ;R in a $roduction "acilit* at )ra,i%ra#ova count*( t#e $roduction "acilit* was com$leted in 200Band currentl* #as a ca$acit* o" 120000 mH *earl*

• t#e com$an* $roduces $ocket "oundations $illars beamsrein"orced concrete 6oors #ollow core slabs

• ('rno&er *or CRH STRUCTURA CONCRETE 8-119@ 2.:+)ll)on EURK

=3>+>I>+E@www3plastsistem3

• t#e com$an* is $art o" t#e Romanian grou$ TR7!T <


wwwmarketsco$ero A

http://www.asacons.ro/

http://www.ergon-international.com/ro



http://www.plastsistem.ro/

http://www.asacons.ro/







ro • became a $roducer in 200B w#en t#e Frst t#ermo-insulating$anels $roduction line became o$erational at t#e com$an*3s!aratel $lant %)istrita-Nasaud count*(

• t#e com$an* $roduces t#ermo-insulating $anels %wit#$ol*uret#ane insulation( metallic construction "rames industrialdoors

• ('rno&er 8-119@ 1=.> +)ll)on EURK

Ther+o0)ns'la()n 3anels

O&er&)e6 T#ese $roducts are one o" t#e most com$le4 construction solutions$resent on t#e market as t#e* "ulFl multi$le roles: cladding or rooFngsolution t#ermal insulation Fre $rooFng etc T#us it is di+cult to $lacet#em in a s$eciFc market

T#ermo-insulating $anels @ or Msandwic# $anels as t#e* are calledin"ormall* @ consist o" two galvani,ed metal s#eets wit# a t#ermal

insulating core %can be $ol*st*rene mineral wool or $ol*uret#ane( ueto Juickness in assembling t#e* are an ideal solution "or wall or roo"covering o" non-residential $ro.ects %logistic centres industrial buildingsretail centres( and because o" t#eir insulating Jualities t#e* are alsoused "or re"rigerating rooms %"ood industr*(

T#is segment is one o" t#e most d*namic segments o" t#e constructionmarket in terms o" local $roduction develo$ment: in 200K onl* 2 millionm2 were $roduced internall* w#ile in 200B t#e internal $roductiondoubled T#e market currentl* reac#es a $roduction o" a$$ro4imatel*5H million m2 and a value o" a$$ro4imatel* D0 million ;R %e4$ected toincrease to 110 million ;R in 201A( T#e s#are o" im$orts #as declinedsigniFcantl* over t#e $ast *ears "rom 50-K0E in 200B to about 1-25Ein 2011


wwwmarketsco$ero AD





)uilding ad#esives

T)ll)n adhes)&es7 3olys(yrene adhes)&es and asse+5ly adhes)&es1

O&er&)e6

+ilingadhesi"eshasde"elopedinto a matremar&et

>till high potential inthe polystyreneadhesi"esmar&et

Tilling ad#esives $ol*st*rene ad#esives and grouts markets roug#l*

s#are t#e same com$etitors #owever t#is overla$ does not a$$l* toassembl* ad#esives w#ere com$anies active on t#e market "orm adierent set o" $la*ers as com$ared to t#e ot#er t#ree $roductsCom$etitor landsca$e "or assembl* ad#esives mainl* includesconstruction c#emical com$anies also $roducing ; "oams and sealantsas well as ot#er $utties or $rimers

Tilling ad#esives and grouts markets are establis#ed and mature wit# anumber o" 10 $la*ers accounting "or a$$ro4imatel* B0 - 0E o" t#emarket and a m*riad o" ot#er smaller $roducers s#aring t#e restol*st*rene ad#esives market is still not consolidated and more"ragmented wit# stronger *earl* growt# in $re-crisis *ears %broug#tabout b* mass usage o" e4$anded $ol*st*rene boards as a means to

insulate bot# new and old dwellings( t#at #ave drawn a considerablenumber o" new $la*ers e* $la*ers on t#ese markets includemultinationals like 'N7 or );/IT as well as local businesses as7!T );/IP <))RO or /<

;nlike tilling and $ol*st*rene ad#esives w#ere local $roductionaccounts "or t#e bulk o" t#e market assembl* ad#esives are su$$liedalmost e4clusivel* "rom im$orts e* brands $resent on t#is market are)I!ON N )R=N CR!IT %'N7( !O;7 T>TN %!7N( etc

Marke( s)De ro6(h

T)l)nC adhes)&es +arke( s)De )n Ro+an)a 8(ho' (onnes9

:2/:

22<-

/::= :2 ::

0

200

A00

K00

00

2005 200K 200B 200 200D 2010 2011 2012L


+illingadhesi"esconsmptiondown C0 inyear 200

Tilling ad#esives market volume increased signiFcantl* in *ears 2005-

200 reac#ing an estimated K20000 tons in 200 'owever "ollowingt#e evolution o" t#e ceramic tiles market t#e tiling ad#esives marketdro$$ed b* a$$ro4imatel* H0E in *ear 200D and around 10E insubseJuent *ears reac#ing an estimated H50000 tons in 2011<routs market volume varies in line wit# t#e ceramic tilling market andis estimated at around A-5E o" t#e tilling ad#esives market in volumeterms

1 %his section refers to cement-based tilling adhesives, grouts and pol&st&rene adhesives packaged in sacks and to

assembl& adhesives packaged in cartridges (88 ml - most common cartridge, but also 88 ml and bigger packaging etc33'sage of P' <acr&lic adhesives for la&ing ceramic tiles and eHpanded pol&st&rene boards isinconseuential and thus not covered in this report


wwwmarketsco$ero 50



olystyreneadhesi"esconsmption

maintainedsimilar le"elsin crisis years

Polys(yrene adhes)&es +arke( s)De )n Ro+an)a

8(ho' (onnes9

>1:

--/ -: -: -/ -2

0

110

220

HH0

2005 200K 200B 200 200D 2010 2011 2012


/arket volume "or $ol*st*rene ad#esives reac#ed an estimated 2A0000tons in *ear 200 and is considered among t#e "ew building materialst#at did not #ave a dramatic slide t#roug#out t#e crisis $eriod due tot#e re#abilitation works "or old blocks o" 6ats and new $ro.ects in t#enon-residential sector In 2011 t#e market registered a slig#t increasereac#ing an estimated 2A0000 tons level similar to t#at in *ear 200

3ssem!lyadhesi"e is a prodct withlimitedawarenessamongconstrctionwor&ers$ thsthe "olmesare still low

Asse+5ly adhes)&es +arke( s)De )n Ro+an)a

8+)ll)on EUR9

17:17=

-7=

:7>

-7=-72 -7/ -7/

0

H

K

2005 200K 200B 200 200D 2010 2011 2012L


T#e assembl* ad#esives market growt# rate turned into a negative $acein t#e 200D-2011 $eriod given t#e general construction sector conte4t T#e market is estimated to #ave reac#ed a 2A million ;R value in2011

Marke(s(r'c('re

3ssem!lyadhesi"esmar&etdominated !y imports

Adhes)&es +arke( s(r'c('re )n Ro+an)a

)n years -1 0 -117 5y or)C)n

0E 50E 100E

ssembl* ad#esives

Tilling and $ol*st*rene ad#esives

Focal production >mports


wwwmarketsco$ero 51



>tandardtillingadhesi"eshold thegreatest part o( the mar&et


Im$orts o" tilling and $ol*st*rene ad#esives are rat#er limited On t#eassembl* ad#esives market on t#e ot#er #and im$orts account "oralmost all volumes on t#e market %t#e onl* large local $roducer:NTICORO!I= w#ic# $roduces "or N )R=N t#at in turn im$ortssome volumes too(

s regards a breakdown o" t#e tiling ad#esives market b* $roduct t*$e%level o" Jualit* X usage( standard ad#esives #old t#e largest s#are as$rice still #as an im$ortant role in t#e decision making $rocess amongstconsumers and construction com$anies lt#oug# $owder tilingad#esives are most common t#e su$$l* on t#e Romanian marketincludes also Mread*-mi4 ad#esives w#ic# do not reJuire to be mi4edwit# water but to be a$$lied as t#e* are in t#e $ackaging %one o" t#eke* su$$liers "or t#is t*$e o" $roduct is ;N7O '!I=!( - #oweverconsum$tion is still low "or t#is s$ecial t*$e o" ad#esives

Co+3e()(orlandsca3e

+illing and polystyrene

adhesi"esmar&ets arecompetiti"e$with 10 playersacconting(or most o(the sales

T#e com$etitor landsca$e on t#e cement-based ad#esives market isdominated b* $la*ers wit# large $roduction "acilities in ke* geogra$#ical

areas and well develo$ed distribution s*stems %eg: 'N7 );/IT;RI= 7!T &)R ;T );/IP etc( )esides t#ese$la*ers one can add a series o" smaller $la*ers wit# smaller ca$acitiesw#ic# distribute t#eir $roducts at a regionalQlocal level %eg: );7INICROC CO/T '!IT etc(

T#ere are about 20 main com$etitors on t#e local cement-basedad#esives market lt#oug# t#e market s#runk during crisis *ears mostma.or $la*ers re$orted an increase in turnover and market s#are

Turnover "or ke* $la*ers on t#e tilling and $ol*st*rene ad#esives

markets in *ears 2010 and 2011 %million ;R(

/.<

/.-

2.1

>.-

=.<

1:.=

1<.;

-;

:.:

<<.:

1.;

:.<

:.<

<.2

;./

1=

--.1

-;.:

::.<

</

0 10 20 H0 A0 50 K0 B0

/<

<abbro

Ital-ol

)aumi4

/a$ei

:ura,iv

&eberLL

)aumit

de$last

'enkelL

Turnover 2010 Turnover 2011


wwwmarketsco$ero 52



@oreconcentrated competitorlandscape inthe assem!ly adhesi"esmar&et

9.06I0F)s turnover and pro"t "gures represent half of the total oJcial "nancial data forall of .enkel)s operations in Romania, which also include #@C= products like detergents,cosmetics etc3 99W0B0R)s turnover and pro"t "gures represent 4K of the oJcial"nancial data for all !A>6%-=5BA>6)s operations in Romania, which also include glass, plasters, insulating materials etc3

T#ere are also some im$orters active in t#e cement-based building

ad#esives %eg: RP ;N7O '!I=! /I etc( o" w#ic# anotable is t#e one o" /I

To$ A com$anies on t#e tilling ad#esives and $ol*st*rene ad#esivessegment a$$ear to be: 'N7 %estimated market s#are: H0E(7!T );/IT and /<

/a.or com$anies active on t#e assembl* ad#esives market include:'N7 T/ N )R=N CCORIN< <RO; !7N and!O;7

T'rno&er *or key 3layersG on (he asse+5ly adhes)&es

+arke(s )n years -1 0 -11 8+)ll)on EUR9

17:

:7;

=7/

-/71

:>7-

17/

=72

=7>

-/7=

//

0 10 20 H0 A0 50

!oudal

!elena

ccording <rou$

Temad

:en )raven

%urnover 78/8 %urnover 78//

9.enkel)s "nancial results presented in a previous chart also include sales of assembl&

adhesives

N )R=N is t#e onl* com$etitor o$erating a $roduction "acilit* ont#e local market "or ; "oam cartridges %most o" t#e ot#er $roductsseem to be still im$orted( s o$$osed to t#e ot#er big $la*ers T/and CCORIN< <RO; are not branc#es o" international $roducersbut t#e* distribute $ower"ul international brands %)ison b* T/( or$rivate labels $roduced b* "oreign $roducers %Com$akt b* CCORIN<<RO;(

lease see below more detailed $roFles o" ma.or $la*ers active on t#erelevant markets:

Ma)n 3layers on (he ()ll)n 3olys(yrene adhes)&es +arke(

HEN%Ewwwceresitro

wwwceresitcom

rodction capacity and locations: A50 @ 500 t#ousandtonsQ*ear %200000 t @ Cam$ia Tur,ii Clu. count* 250000 t @)uc#arest(

In"estments: $lans to invest 10 million ;R in a t#ird $roduction$lant in Ro,nov Neamt Count* w#ic# will #ave a B00 t#ousandtonsQ*ear $roduction ca$acit*


wwwmarketsco$ero 5H

http://www.ceresit.ro/

http://www.ceresit.com/

http://www.ceresit.ro/

http://www.ceresit.com/



<ther in(ormation: $la*er on t#e markets "or ot#er constructionc#emicals as well %im$orter o" ; "oams sealants assembl*ad#esives 6ooring and water$rooFng solutions( ver* active in bot#T7 and )T7 $romotional cam$aigns %discounts etc(

A#EPASTwwwade$lastro

rodction capacity and locations: B00000 tonsQ*ear "orad#esives and mortars %250000 t @ Oradea $lant A50000 t @loiesti $lant( 220000 tons "or $aints and decorative $lasters%Oradea( and B00 t#ousand cubic meters "or $ol*st*rene-! %inloiesti(

In"estments: $lans to o$en a new $roduction "acilit* "or ad#esivesand mortars in Roman Iasi Count* wit# a ca$acit* o" H50000 t Q*ear and a new $ol*st*rene $lant in loiesti

"AUMITwwwbaumitcom

rodction capacity and locations: K50000 tonsQ*ear %H00000 t@ Teius $lant lba Count* 100000 t @ )uc#arest $lant 250000 t @)olintin eal <iurgiu count*(

<ther in(ormation: $art o" !C'/I IN;!TRI 'O7IN< w#ic#also controls ;!TROT'R/ %$roducer o" e4$anded $ol*st*rene -! boards(

Marke(dr)&ers

rices #ave grown in recent *ears %A-5E *-o-* growt#( due toincrease in costs wit# raw materials and "uels

Initial estimates s#owed a $ossible increase o" t#e $ol*st*renead#esives market wit# about A5 million ;R due to t#e olddwelling re#abilitation $rogramme im$lemented b* t#e state'owever due to slow $ace o" t#e $rogramme %onl* a $art o"a$artment blocks #ave been re#abilitated( t#is $articularsegment o" t#e demand re$resented onl* 5E o" t#e totalad#esives market in 2011 %and 15E o" total consum$tion o"$ol*st*rene ad#esives "or t#ermal insulation(

Individual re#abilitation $ro.ects %b* #ousing Q owners3

associations( and new construction in t#e non-residentialsegment %stadiums stores s#o$$ing centres etc( seem to #avere$resented t#e bulk o" t#e market in 2011 and 2012

T#e use o" e4$anded $ol*st*rene boards in t#ermal insulations*stems is e4$ected to continue its growt# in t#e "uture

<routs market volume growt# could suer a setback due to newtrends o" mounting tiles wit#out .oints also cement-basedgrouts are graduall* re$laced b* silicone .oint Fllers


wwwmarketsco$ero 5A

http://www.adeplast.ro/

http://www.baumit.com/

http://www.adeplast.ro/

http://www.baumit.com/



!ome com$etitors active on t#e assembl* ad#esives market%eg: 'N7 !O;7 CCORIN< <RO;( introduced newt*$es o" $ol*st*rene ad#esives %eg: ; Q acr*lic-based( as analternative to cement-based


wwwmarketsco$ero 55



Insulating window and door s*stems

ProBles7 Loa( lass7 car3en(ry7 B(()ns7 PU *oa+s

O&er&)e6

B0 o(mar&et "alecrrentlygenerated !y reha!ilitationwor&s

T#is section deals wit# two as$ects o" t#is com$le4 sector: T#e $ers$ective o" Fnal car$entr* works %$roduction and mounting

s*stems( T#e $ers$ective o" t#e elements t#e s*stems are made o": glass

$roFles etc

!ector turnover "or t#e insulating window and door s*stem car$entr* Qworks value increased strongl* in $re-crisis *ears "rom a$$ro4imatel* K50million ;R in 200K to a$$ro4imatel* D00 -1000 million ;R in 200

In contrast to $receding *ears market $la*ers and industr* e4$ertsestimate an a$$ro4imatel* H0-50E decline in *ear 200D "ollowed b* 10 -H0E *-o-* decline in t#e "ollowing *ears T#e market is estimated ataround H00 - 500 million ;R in 2011

roFles window Fttings and glass markets seem to cover a$$ro4imatel*50E o" t#e total value o" t#e materials included in suc# car$entr* works

T#ere are several t*$es o" com$anies involved in t#e t#ermal insulatingwindow and door s*stem market:

su$$liers o" com$onents %$roFles 6oat glass window Fttings( insulating gla,ing $roducers $roducers o" s*stems and assemblers %re"erred to as car$enters(

mong t#e last 2 categories o" $la*ers t#ere are constant overla$s

/ost o" t#e sector turnover seems to be generated b* t#e re#abilitation o"e4isting dwelling stock Insulating window and door s*stems market is

c#aracteri,ed b* strong seasonalit* wit# a $eak between !e$tember andNovember

roFles "or insulating windows and doors

O&er&)e6 stimated market si,e o" 100 ;R in *ear 2011 %u$ to 150 million

according to more o$timistic market $artici$ants( ol*vin*l c#loride %=C( $roFles account "or a$$ro4imatel* B0E o"

t#e market Concentration: A-5 $la*ers #old over 50E o" t#e market


wwwmarketsco$ero 5K



Marke( s)De ro6(h

2B5 millionE?; in year2008

Year 2012cold !ringstagnation


roFles market si,e in value terms reac#ed around 1D0 million ;R in200K and increased ra$idl* to a$$ro4imatel* 250 million ;R in 200B In200D t#e market is estimated to #ave declined b* a$$ro4imatel* 50E

Car$entr* $roFles sales in 2012 are estimated at "airl* similar levels ast#e $revious *ear %D0 - 100 million ;R(


wwwmarketsco$ero 5B



Marke(

s(r'c('re

7 acconts(or B0 o(the proGlesmar&et

Increasedsage o(%grade 3'7 proGles


roFles market structure breakdown b* materials indicates t#at$ol*vin*l c#loride %=C( #olds B0E w#ile aluminium $roFles account "or20-25E out o" t#e total market and are "ollowed b* wood and ot#ermaterials w#ic# account "or 5-10E %including aluminium-=C$ol*$ro$*lene etc(

T#ere #as been an u$ward trend in t#e usage o" #ig#er-Jualit* $roFles

T#us a$$arentl* t#e most "reJuentl* used $roFle nowada*s is t#e 5-c#amber =C one wit# grade %t#ickness o" e4terior walls o" t#e $roFle[ 2 mm(

"ter strong increases in t#e earl* *ears o" t#ese s*stems in Romaniaim$orts started to lose $art o" t#eir market s#are and now account "orless t#an 50E o" t#e market It is envisaged t#at t#eir role will continueto decline mainl* because o" $roduction ca$acit* en#ancemento$erated b* local $roducers

<erman* is t#e main &estern uro$ean e4$orter o" =C $roFles toRomania w#ile <reece is t#e main aluminium $roFles e4$orter toRomania

&ood $roFles are usuall* #ig#-end $roducts due to #ig# $rices and lacko" tec#nolog* "or automated $roduction lines


wwwmarketsco$ero 5



Co+3e()(orlandsca3e

6ote:(>mp stands for importer while (Prod stands for producer

companies in green frame represent aluminium pro"les importers<producers?9"nancial data for entire group < compan& (onl& a part of turnover represents sales of PGC pro"les and PGC carpentr&3

"r)e* 3roBles o* +aor co+3e()(orson (he )ns'la()n 3roBles +arke(1

$EAANwwwgealanro

+rno"er 21 million ;R in *ear 2011 HKA million ;Rin *ear 2010

rodction capacity : 1000 tonsQ*ear in )uc#arest $lant >ales estimated market s#are in Romania - H0E o" t#e

total market "or $roFles t#e com$an* also e4$orts to)ulgaria and t#e Re$ublic o" /oldova client base @ A50

com$anies In"estments: investments in $roduction ca$acit*

e4$ansion %"rom 1000 tons to H5000 tons $er *ear( and$roduction "acilities relocation were $ut on #old in 200

=ogistics ware#ouses in )acau Craiova Timisoara Clu.and Constanta were closed due to un"avourable marketconditions

<ther in(ormation 0E o" sales are "or t#e residential ando+ces sectors t#e rest being "or administrative and logistic

1 With the eHception of AF'@>F, all other companies presented below sell PGC pro"les


wwwmarketsco$ero 5D

http://www.gealan.ro/

http://www.gealan.ro/



buildings


wwwmarketsco$ero K0



REHAUwwwre#auro

+rno"er A52 million ;R in *ear 200B 50B million ;Rin *ear 2010

>ales: a$$ro4imatel* 2QH o" turnover is generated b* saleso" $roFles

istri!tion client base @ H00 com$anies t#e com$an*#as 5 sales o+ces across t#e countr*

ey acconts 7!T %ma.or $roducer o" gla,ing andcar$entr* s*stems based on =C $roFles(

<ther in(ormation: $roduces =C and $i$es at its"acilit* located in !ibiu %$lans to "urt#er invest in $roductionca$acit* develo$ment(

TERAPASTwwwtera$lastro

+rno"er ADA million ;R in *ear 2011 505 million ;Rin *ear 2010

>ales: in recent *ears t#ere was a s#i"t "rom $roducing onl*

=C $roFles to com$lete insulating windows %includingmanu"acture o" gla,ing and car$entr*( e4$orts account "ora$$ro4imatel* BE o" turnover and roug#l* #al" o" all e4$ortsare destined to 'ungar*

>trategy in 200D t#e com$an* invested in re-branding t#edivision $roducing t#ermal insulating window Q door s*stems@ brand name c#anged "rom \Ori,ont to MTeraglass 12million ;R were budgeted "or t#e re-branding $rocess t#ecom$an* aims at o$erating A0 Teraglass s#owrooms

In"estments: 1 million ;R investments in 2012 "orlaunc#ing t#e $roduction o" a new $roFle s*stem

AUMIwwwalumilro

3cti"ity : aluminium e4trusion %$roFles Fttings aluminium$anels etc(

+rno"er 1B5 million ;R in *ear 2011 %2QH o" w#ic# wasgenerated b* sales o" aluminium $roFles( 1K1 million ;Rin *ear 2010

rodction capacity and locations: H000 tonsQ*ear "oraluminium $roFles at 8ili$estii de adure %ra#ova count*(

=ogistics over 20 ware#ouses in Romania over A000clients

PROFINEwwwtrocalro

+rno"er BH million ;R in *ear 2011 DH million ;R in*ear 2010 >ales: $roFles wit# 5 c#ambers account "or t#e #ig#est $art

o" sales istri!tion: client base @ over 120 com$anies rands: Trocal Innonova lu8usion remi7ine Inno!a"e


wwwmarketsco$ero K1

http://www.rehau.ro/

http://www.teraplast.ro/

http://www.alumil.ro/

http://www.trocal.ro/

http://www.rehau.ro/

http://www.teraplast.ro/

http://www.alumil.ro/

http://www.trocal.ro/



8loat glass and insulated gla,ing

O&er&)e6 8loat glass market volume dro$$ed to 1B5000 tons in *ear 2010 7ow-emissive %low-e( glass #as continuousl* increased its s#are

in t#e total market !u$$liers "rom C#ina increased volumes e4$orted to Romania in

t#e $ast 2-H *ears

Marke( s)De ro6(h

@ar&et"olme 120 .

1B0 thosand tons in year2012

!ource: previous research, desk research update, @arketscope estimates

8loat glass market volume reac#ed an estimated 210000 tons in *ear200B and 2A0000 tons in *ear 200 In *ear 200D t#e marketregistered a signiFcant decline due to t#e slum$ in t#e constructionsector and ad.acent markets %including insulating gla,ing "urniture Xsanitar* ware interior design - sectors w#ic# account "or a$$ro4imatel*D0E o" total sales "or 6oat glass(

Marke(s(r'c('re

=ow.e glasshad a moredynamicgrowth thanclear Noatglass

/arket breakdown b* t*$e o" 6oat glass reveals t#at clear 6oat glassaccounts "or over #al" o" t#e total market T#is t*$e o" 6oat glass #ascontinuall* diminis#ed its market s#are in "avour o" low-emissive glass

or ot#er t*$es suc# as Mbod*-tinted Msolar control or ot#er kinds o"s$ecial coatings %6oat glass wit# s$ecial coatings are e4$ected to reac#50E o" t#e local market in 2015( T#is is mainl* due to t#e "act t#at anincreasing number o" insulated gla,ing $roducers no longermanu"acture insulated gla,ing made u$ o" .ust clear 6oat glass

T#e bulk o" 6oat glass im$orts usuall* originate "rom Central andastern uro$e %t#e "actories o" global $roducers located in 'ungar*and oland( and C#ina

Im$orts diminis#ed t#eir s#are at .ust over #al" o" t#e total market


wwwmarketsco$ero K2



volume in *ear 200 %as com$ared to around 0E in *ears 2005 - 200K(once !INT-<O)IN <7!! %one o" t#e global $roducers o" 6oat glass($reviousl* an e4$orter to Romania o$ened a $roduction "acilit* inRomania at t#e end o" *ear 200K

>peciali9edglass iseFpected toincreaseimportance

$$arentl* 6oat glass $roducers "rom C#ina su$$l* t#e Romanian

market w#enever t#ere is over-demand and uro$ean $roducers cannotsu$$l* t#e e4tra volumes in t#e market ven wit# all im$ort costsincurred 6oat glass $roduced in C#ina is still c#ea$er t#an uro$eanglass #owever it is regarded as o" in"erior Jualit*

s almost all insulated gla,ing units are manu"actured using Amm-t#ick6oat glass and B0E o" 6oat glass is used in t#e a"orementioned domainone can assume t#at Amm-t#ick glass is most widel* used


Increasing usage o" glass in interior design #as $ro$elled demand "ortem$ered and laminated glass s a result some large 6oat glassdistributors decided to invest in t#eir own glass $rocessing "acilitiessuc# as tem$ering "urnaces %most tem$ering "urnaces were su$$lied b*7I!C and <7!TON(

Co+3e()(orlandsca3e


wwwmarketsco$ero KH



7egend:

<ne maorlocal prodcer$with theother glo!al!rands present "iaimporters

T#ere are 2 local $roducers o" 6oat glass: !INT-<O)IN <7!!RO/NI %!<<( and <! <7!! !ales Q Re$resentative o+ces o"international $roducers <;RIN and <C 87T <7!! %"ormerl*known as <7=R)7( are also $resent in Romania T#ese twocom$anies do not #ave logistic "acilities in Romania and su$$l* to t#eRomanian market is #andled b* neig#bouring subsidiaries or clients

istribution on t#e 6oat glass market is made t#roug# large s$eciali,edcom$anies %eg: CRI!T7 )R 8R/NN( and also t#roug# largeinsulated gla,ing $roducers %eg: !CTR;/ IN;!TRI! 7/<7!!etc( w#ic# distribute to smaller $roducers t#at generall* need lesst#an t#e minimum order t#at $roducers would su$$l* %eg: oneQtwotruck load%s( etc( !ome $roducers o" insulated gla,ing are also active

in t#e Mcar$enters3 categor* %eg: 7IO7!T 7/<7!!(

Maor 3layers on (he Loa( lass +arke(

SAINT$O"AIN

wwwsaint-gobain-glasscomQro

+rno"er KK million ;R in *ear 2011 %a$$ro4imatel* 50Eis estimated to re$resent sales in Romania w#ile t#e restare e4$orts(

rodction capacity and location: 2A0000 tonsQ*ear atCalarasi %!out#ern Romania( "ollowing a 1H0 million ;R


wwwmarketsco$ero KA

KK

7ocal $roducers Q !ales Qre$resentative o+ces o" international

8loat glass

istributors wit# "acilities "or insulated gla,ing

http://www.saint-gobain-glass.com/ro






investment started in *ear 200K o" w#ic# H0 million ;R int#e so"t low-e $roduction line %w#ic# #as a *earl* coatingca$acit* "or 10 million m2(

rodct range: clear low-e solar control 6oat glass

$UAR#IANwwwguardiancom

>ales own estimation on market s#are in *ear 200B @ H0E- market leader a$$arentl* t#e com$an* lost a signiFcant$art o" its s#are in "avour o" !aint-<obain once t#e "actor*o" t#e latter became "unctional in Romania

<ther in(ormation: t#e com$an* #as a $roduction linewit# a ca$acit* o" W5B0 tonsQda* situated at Oros#a,a'ungar* "rom w#ere it su$$lies to neig#bouring countriesbot# clear and low-e glass

Ot#er com$etitors on t#e 6oat glass market are <! and <C 87T

<7!!

/a.or $la*ers active in Loa( lass d)s(r)5'()on act also as im$orters%t#e* distribute bot# glass $roduced locall* b* !<< but also im$ort"rom ot#er $roducers mentioned( !ome o" t#e most notable distributorson t#e market are: CRI!T7 )R 8R/NN I!O7RO/ C=7<7!! O I!TRI);TION /TRT =TC'I/ etc

/a.or com$anies active in t#e 3rod'c()on o* )ns'la()n laD)n'n)(s sector include: !CTR;/ IN;!TRI! 7IO7!T O7IN 7;!TICRO <R; <7!! R7;C RO /ONO<7! =7R! !TITR/ T-<7!! C>!TR <7!! <OT'R/ ]DH etc

)esides usage wit#in manu"acture o" insulating gla,ing units glass ismore and more used in interior design and glass "urniture segmentsw#ic# reJuire t#icker tem$ered andQor laminated glass 7T <7!!ITT <7!! &ORIN< and <7!! PRT seem to be t#e largestcom$anies in t#is Feld o" e4$ertise


wwwmarketsco$ero K5

http://www.guardian.com/

http://www.guardian.com/



T#ermal insulating car$entr* works

Co+3e()(orlandsca3e

ragmentedmar&et

Com$etitors on t#e car$entr* market can be divided into H ma.orcategories:

large $la*ers t#at develo$ed e4tensive distribution networks andtr* to integrate as muc# o" t#e manu"acturing $rocess as$ossible and invest in brand develo$ment %eg: 7!T C!NO!TR( t#ese com$anies #ave #ig#-$er"ormance eJui$mentand also $roduce t#eir own insulated gla,ing lso some o" t#em#ave decided to e4$and t#eir outlet network t#roug# "ranc#isesor ot#er t*$es o" s$ecial $artners#i$s

medium and small car$enters w#ic# mostl* activate regionall*or locall*

ver* small com$anies w#ic# tend to #ave a ver* limitedcoverage %$art o" a cit* at most( and $roduce in a rat#er I>

manner!mall and ver* small com$anies used to generate a signiFcant $art o"t#e car$entr* market value 'owever crisis determined t#e number o"small and ver* small com$anies to dramaticall* decrease /oreoverwit# ; Jualit* regulations into "orce since 200B %regarding t#enecessit* "or t#e Fnal $roduct to bear MC marking( small com$anies$re"erred to give u$ gla,ing $roduction and s$eciali,ed in mountingworks e4clusivel*

!trong increase o" t#e sector in $re-crisis *ears drove $la*ers to accessloans "or eJui$ment endowment and working ca$ital 'owever wit# t#esector severel* aected b* t#e economic crisis in t#e 200D - 2011$eriod numerous bankru$tcies #ave occurred

/a.or com$etitors on t#e insulating window and door car$entr* marketinclude: 7!T OTI/I 8R-!T C! NO!TR ?;!RIN;!TRI! !N D2 =I/R I/P )I< 7;/I;/ 8IN 8N!TR etc

8ittings

$eneral)n*or+a()on

&indow and door Fttings market value was estimated at around 0million ;R in *ear 200 and at 25 - H0 million ;R in *ear 2011Im$orts #old virtuall* all o" t#e market and mainl* originate "rom<erman* Turke* and ustria

Co+3e()(or

landsca3e

Maor co+3e()(ors on (he B(()ns +arke(

Co+3any

T'rno&er year-118+)lEUR9

"r)e* 3roBle

<; 8RRO/ B $$arentl* market leader on t#eFttings market

ROTO RO/NI K &are#ouse situated in )uc#arestnearest $roduction site is in 'ungar*

!C'C'R/>R

A istributor o" ma.or uro$eanmanu"acturers B0E o" Fttings sales


wwwmarketsco$ero KK



are generated b* /aco Fttings

!C';RIN< RO/ 0B

O+cial distributor o" !C';RIN<<R/N>!C';RIN< RO/ is $art o" )R;N<RO; w#ic# also com$rises ot#ercom$anies s$eciali,ed in manu"acture

o" car$entr* insulated gla,ing curtainwalls !ells Fttings and eJui$ment "orcar$entr* $roduction t#roug# a set o"distributors in ke* cities across t#ecountr*


wwwmarketsco$ero KB



; "oams

O&er&)e6 /arket si,e: estimated at 20 million ;R in 200 and B - D million;R in 2010

Onl* one $roducer active on t#e market %rest o" su$$l* comes "romim$orts(

Co+3e()(orlandsca3e

&it# t#e e4ce$tion o" N )R=N all com$anies $resent on t#emarket are im$orters o" ; "oams revious studies on t#e market re$ortt#at N )R=N 'N7 %CR!IT( T/ CO %)ison( !7N%T*tan( and NO!I7 cover a$$ro4imatel* 0E o" t#e volumes

Maor co+3e()(ors on (he PU *oa+s +arke(

Co+3any

T'rno&er

year-118+)lEUR9

"r)e* 3roBle

N)R=N AA

!ells ; "oams sealants and assembl*ad#esives among ot#er c#emicals

Invested B5 million ;R in a $roductionline "or ; "oams close to )uc#arest

stimated $roduction ca$acit* o" 10million cartridges in *ear 200

4$orts re$resent about #al" t#ecom$an*3s sales

'N7

12(all

operationsinRomania

Turnover includes sales o" all buildingmaterials in com$an*3s $ort"olio %tilling Q$ol*st*rene ad#esives water$rooFng

solutions 6ooring ad#esives etc( ; "oams and sealants generate

a$$ro4imatel* 5 - K ;R in sales

!7N 5

Com$an* sells ; "oams sealants andassembl* ad#esives under brand nameMT*tan but also 6ooring ad#esives underbrand name Mrtelit

K0 - B0E o" turnover is generated b*sales o" ; "oams

T/ 2A

/arkets M)ison brand T#e com$an* distributes a wide range o"

; "oams sealants ad#esives and

various ot#er construction c#emicals andaccessories %cutting discs abrasives$rotection eJui$ment etc(

7aunc#ed own brand o" ; "oams %calledMRino( "or mounting o" t#ermalinsulating s*stems

NO!I7 0D Com$an* wit# #eadJuarters in stonia

#as subsidiaries in 22 countries

mong ot#er $la*ers on t#e market one can mention: CCORIN<<RO; !I and !O;7


wwwmarketsco$ero K




wwwmarketsco$ero KD



Insulating materials

EPS7 5)('+)no's +e+5ranes and o(her (her+al0 hydro0)ns'la()n +a(er)als

Marke(o&er&)e6

T#e insulation market is divided in "our submarkets: t#ermal%$ol*st*rene and mineral wool are t#e most used materials( #*droacoustic and Fre$roo" insulation T#e $roducts oered on t#is marketo"ten #ave multi$le insulation $ro$erties t#ere"ore t#ere mig#t beoverla$s between t#ose submarkets /oreover t#e com$anies active ont#e insulation materials market tend to diversi"* t#eir $ort"olio %severalinsulation solutions( or oer com$lete insulation s*stems %a $roduct$ackage based on more insulation $roducts(

otential onthereno"ation

segment

T#e market #as registered large growt# rates in t#e $re-crisis *ears andcontinues to #ave #ig# $otential due to t#e regulations ado$ted at ;level t#at reJuires buildings to #ave a t#ermal insulation certiFcate T#is

document attests t#e t#ermal e+cienc* o" a building and will be neededw#en selling a dwelling It is onl* natural t#at dwellings wit# #ig#ert#ermal e+cienc* will be $re"erred New buildings and residential $arksare designed to be t#ermal e+cient but t#ere is a great number o" oldbuildings t#at need t#ermal re"urbis#ment %it is estimated t#at t#ermaline+cient construction account "or about K0E o" t#e total number o"buildings in Romania(

+he nationalreha!ilitation program progressesslowly

In t#is res$ect a governmental $rogram #as been initiated in 2002 @re#abilitation o" t#e national dwelling stock @ t#roug# w#ic# t#e cost o"insulating old buildings was state-subsidi,ed b* two t#irds o" t#e totalvalue T#e $rogram #ad en.o*ed little success mainl* because o" redta$e 'owever new regulations $roviding standard $ro.ects "or various

t*$es o" blocks o" 6ats and Fnancing t#roug# uro$ean 8unds reducedbot# time and mone* needed "or a$$lications to t#e $rogram InRomania t#ere are a$$ro4imatel* 0000 blocks o" 6ats %among w#ic#50-K0 t#ousand need to be t#ermall* re#abilitated( o" w#ic# onl*around 1000 @ 2000 #ave been re#abilitated t#roug# t#is $rogram T#ere"ore t#e t#ermal re"urbis#ment o" old buildings re$resents a ke*driver "or t#e insulation market

Marke( s)De uring t#e crisis *ears t#e total market "or insulating materials wasmostl* sustained b* renovation $ro.ects and remained around t#e samelevels wit# a slig#t increase "rom a$$ro4imatel* 200 million ;R in200 to about 220 million ;R in *ear 2011 /ost $la*ers on t#e markete4$ect a slig#t increase in 2012 %H-5E( or stagnation !till e4$ertsbelieve t#at t#e market can register u$ to 15-20E annual growt# rates"or at least 5 *ears a"ter t#e Romanian econom* recovers making it oneo" t#e most attractive building materials markets

bout H - H5 million mH o" e4$anded $ol*st*rene %!( were sold in2011 wit# a value o" around D0 - 100 million ;R %volumes and valuesare similar to *ear 200( w#ile mineral wool sales reac#ed 50 - K0million ;R %t#e s#are o" glass and basaltic t*$es in total sales isa$$ro4imatel* eJual( 4truded $ol*st*rene %P!( reac#ed a marketvolume o" about 0H5 million mH la*ers estimate t#at t#e ! #as amedium term growt# $otential to reac# u$ to H50 million ;R w#ile


wwwmarketsco$ero B0



mineral wool #as t#e $otential to reac# 150 million ;R at maturit*level It is e4$ected t#at in t#e "ollowing *ears t#e s#are o" mineralwool in t#e t#ermal insulation market to increase

T#e sales o" bituminous membranes %"or #*dro insulation( reac#edabout 50 million ;R w#ile Fre$roo" insulating materials reac#ed a

market value o" about 20 million ;R in *ear 2011

+hermalinslationmaterials

co"erapproFimatel y B0 o( theinslation prodctsmar&et in;omania


onsmptionrateincreased

signiGcantlyin pre.crisis period

T#e market "or t#ermo-insulating $roducts #as registered a s$ectacularevolution in $re-crisis *ears: in 200H t#e consum$tion rate was o" 1mH $er 50 $ersons w#ile in 200 it reac#ed an outstanding 1 mH $er K

$ersons 'owever t#ere is still $lace "or im$rovement as Romanianconsum$tion is still in"erior to develo$ed ; countries

Installedcapacity (or polystyreneeFceeds local demand

T#e #ig# growt# rates o" t#e market during t#e 200A - 200 $eriod andt#e relativel* small investments needed to start $roduction determineda #ig# number o" $la*ers to invest in local $roduction "acilities or toim$ort t#ermo-insulating $roducts Currentl* t#ere are about K0$roducers o" ! in Romania wit# a cumulated $roduction ca$acit* $er*ear o" over D million mH %greatl* e4ceeding local demand(

On t#e mineral wool segment t#ere are currentl* onl* two local$roducers most Juantities being im$orted

Imports o(!itminosmem!ranesstill hold 20 .C5 share

I" local $roducers dominate t#e market "or ! t#e situation on t#ewater$rooFng market is Juite dierent lt#oug# local $roduction o"bituminous membranes %$re"erred water$rooFng materials on t#eRomanian market( #as increased signiFcantl* in t#e $ast *ears im$ortsstill #old an im$ortant s#are in consum$tion accounting "or about 20-H5E in volume terms Im$orts "or $remium $roducts %WAkgQm2(originate "rom Ital* <erman* 8rance ustria C,ec# Re$ublic 'ungar*)elgium and ortugal w#ile low-cost $roducts %W2kgQm2( originate "romRussia )ulgaria /acedonia ;kraine and !lovenia Im$orts o"bituminous membranes generall* tend to cover demand "or #ig#erJualit* $roducts on t#e Romanian market


wwwmarketsco$ero B1



Economiccrisis helpedthe mar&et toreachmatrity

la*ers active on t#e local market o" t#ermo-insulating $roducts declaret#at t#e economic crisis determined an earl* maturing o" t#e marketes$eciall* t#e $ol*st*rene submarket Considering t#at t#e $ol*st*rene$roduction reci$e is uniJue %and t#ere"ore t#ere is little dierencebetween $roduction costs @ 10E at most( small $roducers %Mno name(e4ited t#e market not being able to wit#stand larger com$etitors t#at

oer besides t#e $roduct itsel" service $ackages or t#ose w#o #avebetter logistics

Maor 3layers lt#oug# t#ere are numerous $la*ers on t#e $ol*st*rene segment t#emarket is rat#er concentrated t#e to$ Fve $la*ers accounting "or moret#an t#ree Juarters o" t#e e4isting $ol*st*rene $roduction ca$acities inRomania In contrast on t#e mineral wool submarket %wit# onl* twolarge $roducers: I!O=R !INT-<O)IN and <C!T( and on t#ebituminous membranes submarket t#e number o" $la*ers is rat#ersmall and local $roduction is not su+cient to cover internal demand

@ostanaly9ed players ha"erecordedtrno"ergrowth in2011

8inancial results "or t#e ke* $la*ers on t#e

insulation market %million ;R(

KK

5B

BH

K5

1H2

1K2

2HB

H0H

AH

5K

5

K5

KB

D

1B1

20K

2B

HHK

KHH

0 25 50 B5

;rsa

Iso$or

Rockwool

!wiss$or

nau" Insulation

ustrot#erm

ent*ss

rcon

de$last

Isover %!aint-<obain(

%urnover 78//

%urnover 78/8

!ource: @inistr& of #inance6otes: >!5G0R turnover and pro"t represents oJcial "nancial data for !A>6%-=5BA>6C56!%R'C%>56 PR5'C%! R5@A6>A which activates in several segments: insulationmaterials, plasterboards, adhesives, pipes etc3 A0PFA!% turnover and pro"t are oJcial"nancial data for the whole compan& (activates in multiple sectors

3;<

%ey )ss'es

$roduces bituminous membranes and e4$anded $ol*st*rene at t#e$lant located in !"antu <#eorg#e %Covasna Count*(

RCON is leader on t#e market "or bituminous membranes wit#about H0-H5E market s#are %u$on t#eir own estimations(

sales o" bituminous membranes re$resent about 55E o" turnover e4$orts re$resent about 10E o" total sales o" bituminous

membranes %com$an* o+cials re$ort t#at t#e* $lan to increasee4$orts in t#e "ollowing *ears(

In&es(+en(s

invested over million ;R in t#e Frst $roduction line "or ! in


wwwmarketsco$ero B2



*ear 2005 invested H5 million ;R in 200B in a new bituminous membranes

$roduction line and e4$anded $ol*st*rene ca$acit*

Ca3ac)(y

bituminous membranes @ 20 million m2

e4$anded $ol*st*rene @ D00000 mH

AE+Y>>

AE+Y>>

%ey )ss'es

t#e com$an* o$erates two e4truded $ol*st*rene $roduction $lantsat rad and )u,au

until recentl* t#e com$an* also o$erated $roduction lines "ore4$anded $ol*st*rene but t#ose lines were sold to 7!T in2012 and will be moved to 7!T3s $roduction "acilities duringt#e 2012 - 201H winter

entered t#e ;krainian market t#roug# a .oint-venture 5 million ;Rwere invested in an e4$anded $ol*st*rene $roduction $lant t#at willcover t#e iev-Odessa and Re$ublic o" /oldova markets

In&es(+en(s $lans to invest H million ;R in t#e e4truded $ol*st*rene line in

201H

Ca3ac)(y

e4$anded $ol*st*rene %recentl* sold to 7!T( @ K00000 mH e4truded $ol*st*rene @ 255000 mH ad#esives and dr* mortars 100000 tons

3?>+;<+HE;@

%ey )ss'es

$art o" t#e ustrian grou$ !C'/I IN;!TRI 'O7IN< o$erates t#ree $lants: two ! $roduction "acilities in )ucuresti and

'oria %Neamt count*( and one e4truded $ol*st*rene $lant also in'oria

In&es(+en(s

million ;R investment in t#e e4truded $ol*st*rene $lant in 'oria%Neamt count*(

Ca3ac)(y

e4$anded $ol*st*rene @ B00000 mH e4truded $ol*st*rene @ 150000 mH

>JI>><;%ey )ss'es

t#e local subsidiar* o" t#e #omon*mous !wiss grou$ !&I!!OR

o$erates a $roduction $lant in loiesti since *ear 1DD $roduces t#ermal insulations %e4$anded and e4truded $ol*st*rene

$ol*uret#ane( #*dro insulations %bituminous membranes masticsand cardboards( and acoustic insulations %basaltic and glassmineral wool(

e4$orts a $art o" $roduction to Re$ublic o" /oldova )ulgaria and!erbia

In&es(+en(s

million ;R investment in new $roduction unit at Turda - $ut on#old in 200B


wwwmarketsco$ero BH



Ca3ac)(y

bituminous membranes @ 15 million m2

I><<; %ey )ss'es

boug#t b* !&I!!OR "or 55 million ;R in 200 t#e com$an* $roduces e4$anded $ol*st*rene in a $roduction

"acilit* in Clu. $roduct range also includes e4truded $ol*st*rene bituminous

membranes and mineral wool

In&es(+en(s

million ;R investment in a $roduction $lant in )uc#arest was $uton #old

Ca3ac)(y

e4$anded $ol*st*rene @ K00000 mH

>3I+.:<3II><7E;

%ey )ss'es t#e "our !INT-<O)IN divisions I!O=R RI<I! / and &)R

were merged into one com$an* %!INT-<O)IN CON!TR;CTIONRO;CT! RO/NI( in 200D

I!O=R division $roduces glass and basaltic mineral wool e4truded$ol*st*rene and diusion membranes at t#eir loiesti $lant

Ca3ac)(y

mineral wool @ 000 tons glass wool @ 20000 tons

3E=3>+ %ey )ss'es

$roducer o" ad#esives $aints and e4$anded $ol*st*rene $roduction "acilities in Oradea and loiesti in *ear 2012 t#e com$an* boug#t t#e two $roduction lines "or !

"rom NT>!! "rom )u,au and rad and will be moved during t#e2012-201H winter to 7!T3s $roduction "acilities in loiesti andOradea res$ectivel*

20E o" t#e com$an*3s $roducts are sold t#roug# I> c#ains t#erest being sold t#roug# distributors and directl* to constructioncom$anies

market s#are on t#e ! segment is estimated at around E

In&es(+en(s

started o$erations in t#e new ! $lant in loiesti a"ter a A million

;R investment %$lant ca$acit* is B00000 mH

( $lans to invest an additional 2 million ;R in e4$anding t#e$roduction ca$acit* at t#e ! $lant in loiesti to 50000 mH

Ca3ac)(y

e4$anded $ol*st*rene @ over 1 million mH

<ther competitors

URSA @ local subsidiar* o" !$anis# grou$ ;R7IT one o"t#e main im$orters o" mineral wool on t#e local market

%NAUF INSUATION @ local subsidiar* o" N;8 <rou$one o" t#e main im$orters o" mineral wool on t#e local market


wwwmarketsco$ero BA



ROC%WOO @ one o" t#e main im$orters o" mineral woolon t#e local market

AMVIC #as invested about B million ;R in a t#ermo-insulating casings $roduction "acilit* situated in )ragadiru %Il"ovcount*(

$ECSAT invested million ;R in a glass wool $roduction

"acilit* in Tarnaveni %/ures count*( wit# a total ca$acit* o" B000tons $er *ear

IOMAT SIMEU SIVANIEI %!ala. count*( #as a$roduction ca$acit* o" 1K000 tones $er *ear "or basaltic mineralwool and a $roduction ca$acit* o" 5 million m2 $er *ear o" $art o"bituminous membranes

$ENERA MEM"RANE $art o" I7 <RO; investeda$$ro4imatel* 11 million ;R in a new $roduction $lant in )u,au"or bituminous membranes wit# a $roduction ca$acit* o"a$$ro4imatel* 12 million m2 $er *ear

Prod'c( 'ses lt#oug# t#ese $roducts are somew#at substitutable t#e* are $re"erred

"or some t*$e o" insulation:• e4$anded $ol*st*rene #as t#ermal and acoustic insulating$ro$erties and is used "or $lastered "acades ventilated "acadese4terior and interior walls non-circulated low tra+c or intensetra+c terraces #eated 6oors re"rigerating rooms slo$ing roo"swood-structured 6oors

• e4truded $ol*st*rene is used "or t#e t#ermal insulation o""oundations and basement walls interiorQe4terior#eatedQun#eated 6oors new or renovated buildings3 "acadesroo"s and terraces $illars beams re"rigerating rooms

• glass mineral wool is used "or t#ermal insulation andsound$rooFng o" attics e4terior walls intermediate 6oorsg*$sum-cardboard walls metal $roFle building s*stems orindustrial eJui$ments

• basaltic mineral wool is an e4cellent t#ermal insulating materialalso wit# Fre$rooFng and sound$rooFng Jualities used "or:buildings %outside and inside walls bridging attics andterraces( industrial buildings made o" rein"orced concrete ormetal re"rigerating units ve#icles s#i$s and $i$es

• bituminous membranes are used "or #*dro insulating o""oundations roo"s terraces garden roo"s inversed or curvedroo"s metal 6oors $arking street $assages basements bridgesviaducts drains galleries and tunnels irrigation canals tanksswimming $ools and d*kes


wwwmarketsco$ero B5



aints decorative $lasters and ot#er wall Fnis#ing solutions

aints 1

O&er&)e6 T#e $aints and varnis#es market was one o" t#e most d*namic in t#e

construction sector #aving registered %u$ to 200( two-Fgure *earl*growt# rates In s$ite t#e large number o" local $roducers and im$orters%over 200( t#e market is rat#er concentrated at to$ as more t#an #al" o" t#e si,e is s#ared b* K - ma.or local $roducers

/an* o" t#e com$anies active on t#e $aints and varnis#es market #ave ami4ed $ort"olio besides $roducts com$lementar* to $aints %like enamelst#inners etc( also including $lasters and ad.acent $roducts %suc# asad#esives mortars e4$anded $ol*st*rene - ! etc( T#e tendenc* #asbeen to "orm a $ort"olio as wide as $ossible to include solutions "or bot#interior and e4terior wall Fnis#ing

Marke( s)De /ost large $la*ers re$ort dierent data w#en estimating t#e localmarket i+culties in making $recise estimations are due to t#e largenumber o" $la*ers on t#e market some wit# no retail brands w#ic# onl*activate in t#e )2) sector lso $roduction o" $aints is a secondar*activit* "or some $la*ers and t#e* do not re$ort t#eir activities in t#issector &#ile some large $la*ers estimate t#e market at around 1H0 -150 million ;R in 2011 %$robabl* including most common $aints( t#essociation "or t#e ainting Industr* in Romania estimates a marketvalue o" about HH0 million ;R in t#e same *ear %most likel* includingad.acent $roducts too( !till a general market evolution during t#e $ast*ears can be outlined clearl*

"ter im$ressive over H0E *-o-* increase in *ears 200A - 200B and a$eak in 200 at around HH0 - H50 million ;R sales $lummeted in *ear200D and continued a descending evolution in t#e "ollowing *earsla*ers $redict t#e overall market to continue its decline in 2012 %and$ossibl* even in 201H(

+heestimatedmar&et "ale

in year 2008was a recordo( arondCC0 millionE?;


1 5verall market data refer to all categories usuall& included in paints producers) portfolios: paints, varnishes,

enamels, primer, thinners, wet decorative plasters (destined for all segments: decorative < walls, automotive,industrial, etc3


wwwmarketsco$ero BK

Marke( &al'e )n years -=0-1- 8+)ll)on EUR9

HH0

250215

0

100

200

H00

A00

200 2010 2012L

-15E

-10E

-5E

0E

5E

value growt# rate %E(



=ocal prodctioncapacityeFceedsdemand !ymore than 4times

T#e d*namic o" t#e market in volume terms is slig#tl* more volatile: itseems sales tend to ad.ust during lower demand $eriods t#roug#reducing out$ut rat#er t#an $rices and t#us evolution rates #ave #ig#ervalues in case o" market volume t#an "or value

T#e bad *ear in construction sector %bot# in new construction segmentand in t#e renovations segment( resulted in a decrease o" local$roduction in *ear 200D not onl* t#e market #ad di+culties in absorbing$ro.ected $roduction as it did in t#e $revious *ears but some $roducers%es$eciall* t#ose wit# smaller ca$acit* Q out$ut( were greatl* aected b*an increasing e4c#ange rate o" t#e RON %w#ic# meant #ig#er costs "orraw materials w#ic# are all im$orted( and dela*s in receiving due$a*ments %considering t#at some distributors #ad ma.or Fnancial$roblems or even went bankru$t(

T#e market also $er"ormed $oorl* during t#e "ollowing *ears man*com$anies in t#e sector still being in risk o" insolvenc* in *ear 2012Currentl* t#e cumulated $roduction ca$acities o" local $roducers o"

$aints are estimated at around B00 t#ousand tons w#ile actualconsum$tion in *ear 2011 was estimated at less t#an 150 t#ousand tons

Marke(s(r'c('re

=ocal prodction

eFceedsimports

8urt#er to a solid develo$ment o" local $roducers in 200A-200 $eriodim$orts o" $aints and varnis#es #ave diminis#ed t#eir role in t#eRomanian market Currentl* it a$$ears local $roduction #olds about B0-0E o" total volumes wit# t#is s#are even #ig#er in case o" decorative$aints1 Im$orts3 s#are is larger in value %as im$orted $aints are moree4$ensive es$eciall* in t#e industrial segment w#ic# re$resents t#ebulk o" t#e im$orted Juantities( On t#e ot#er #and e4$orts seem to beon an u$ward trend as t#e local market is c#aracteri,ed b* overca$acit*

Jalldecorati"e paintsdominate the

mar&et

T#e main structural c#ange t#at occurred in t#e $aints market inRomania is t#e s#i"t towards decorative $aints w#ic# graduall* occurredduring t#e $ast 10 @ 15 *ears "ter t#e industrial $aints segment wasdominant in earl* 1DD0s t#e trans"ormations in t#e Romanian econom*%aecting t#e industrial $roFle o" t#e countr* $eo$le3s $urc#asing $owerentre$reneurs#i$ initiatives etc( encouraged t#e develo$ment o" newmodern $aints $roduction $lants "ocused more on wall Fnis#ing t#an t#etraditional $roducers

t $resent t#e decorative $aints segment is estimated to #old at leasttwo t#irds o" t#e market value

1 Based on available information, the most common breakdown of the paints market b& t&pe includes the

Lindustrial paints coatings segmentM (for metal, wood, ship building industr&, automotive, etc3 and theLdecorative paints segmentM (dominated b& wall paints


wwwmarketsco$ero BB




<ther trendsregardingmar&etstrctre

T#e "ollowing trends on market structure are roug# estimations based on

Fgures Juoted b* industr* $artici$ants:

T#e bulk o" t#e volumes %B0-0E( get to t#e end-users %includingbot# $eo$le and com$anies using t#e $roducts( b* retail c#annels%w#ic# is usual "or end-users re$resented b* $eo$le but note+cient in terms o" sales to construction com$anies re#abilitationteams o" $ro"essionals etc( 'owever it a$$ears t#at )2) sales aremore and more signiFcant sustained b* eorts o" s$ecial )2) salesunits set u$ b* market com$etitors

&as#able wall $aint a$$ears to be t#e t*$e o" decorative $aintwit# t#e largest s#are o" t#e market %according to some market$la*ers t#is s#are is a$$ro4imatel* B5E out o" t#e decorative

segment(s regards t#e structure b* sales c#annels t#e a"orementionedstatement is su$$orted b* t#e "act t#at modern retail $la*s a ma.or role T#us it a$$ears t#at distribution o" $roducts is generall* made t#roug#I> c#ains %/N RTIR /)INT )RICO!TOR 'ORN)C'/R )RICO7< etc( large building materials distributors %suc# asR)!?; );C etc( but also t#roug# smaller building materialsdistributors @ es$eciall* in t#e case o" low-cost $roducers In additionsome ma.or $la*ers develo$ed t#eir own network o" s#owrooms w#ic#besides $romoting $roducts also act as distribution $oints

Co+3e()(orlandsca3e

T#ere are over 200 tier 1 su$$liers on t#e local $aint market w#ic# canbe s$lit wit#in t#ree ma.or categories:

ma.or local $roducers %w#ic# #old u$ to B0 - B5E o" t#e market(:O7ICO7OR 8)R>O ;T O)R T7! CORORTION &)NT ;R !RCO/

smaller local $roducer: C'I/TITN NTION7 INT! 8CTORI!%"ormer !><'( =O= !CTR7 etc

local sales o+ces Q branc#es Q re$resentatives o" international$la*ers on t#e $aint market %)!8 COTIN<! O NO)7 TI;RI77 etc( and ot#er im$orters %in total about D0


wwwmarketsco$ero B

Trend (o6ards decora()&e seC+en( Cro6(h

0E

50E

100E

1DD0s 2010s>ndustrial (ecorative



com$anies(

T#e landsca$e is com$leted b* ot#er small local $roducers T#us basedon t#e si,e and number o" $la*ers one can notice t#e market isconcentrated at to$ %5-K large $roducers #olding two t#irds o" marketvalue( and "ragmented at bottom %around 10 medium-si,e $la*ers and a

m*riad o" ot#er small $roducers X im$orters(

T#e to$ com$etitors in t#e Romanian $aints X varnis#es market areoutlined in t#e c#art below along wit# brie" Fnancials

+otaltrno"er o(top 5 playersin 2011 isarond 140million E?;

/ost com$anies o$erating large $lants are local businesses develo$eda"ter t#e 1DD revolution %onl* O7ICO7OR is a traditional industrialcom$an* in t#e $aints industr*( International giants in t#e industr* #avenot *et set u$ local $lants des$ite s#owing interest Ot#er "oreigninvestors drawn to t#e $aint market are investment "unds t#at enteredt#e owners#i$ o" some ke* $la*ers %eg OR! =NT;R! at 8)R>O=NT at ;T w#ile O7ICO7OR is #eld almost entirel* b* t#ree

"unds(


)rie" $roFles o" t#e ma.or $la*ers active on t#e market are outlinedbelow:

<E;wwwkoberro

%ey )ss'es T#e onl* large $la*er on t#e $aints market wit#

Romanian owners#i$ T#e com$an* #as two business units: Mecorative

%wit# ertiFkat as its main brand( and MIndustrial aints %wit#"our divisions @ industrial and marine $aints $owder $aintsautomotive $aints and wood $rotection $roducts(

'as 2 $roduction "acilities in Neamt count*: in Turturesti %50000 tons $er *ear $roduction ca$acit*( and in!avinesti %wit# a $roduction ca$acit* o" 120000 tons $er *ear(


wwwmarketsco$ero BD

F)nanc)al res'l(s *or (he (o3 2 3layers on (he

3a)n(s +arke( 8+)ll)on EUR9

1B5

H10

2D0

H2A

HA

1<.;

->

-;.:

-;.=

:;.1

0 10 20 H0 A0 50

tlas Cor$oration

:eutek

olicolor

8abr*o Cor$oration

ober

Turnover 2011

Turnover 2010

http://www.kober.ro/

http://www.kober.ro/



T#e com$an*3s "ocus will be ecological $roducts %water-based $aints(

ey !rands

ertiFkat itura crilu4 Jualu4 Neocar uracril

3;Y<www"abr*ocom

%ey )ss'es

T#e com$an* is controlled b* OR! =NT;R a!wedis# investment "und

;nderwent a $ort"olio restructuring giving u$ u$on A00ad.acent or un$roFtable $roducts now $aints varnis#es and$lasters account "or DAE o" t#e com$an*3s turnover

T7! and 8)R>O $lan to unite t#eir o$erations undera new grou$ #olding t#e two com$anies T7! INT! and8)R>O CORORTION

Invested a$$ro4imatel* 1 million ;R in 200D in$romotional cam$aigns to sustain t#e most im$ortant brand @

!avana @ and $romote t#e newest @ Innenweiss Concluded in 200B a 15 million ;R investment in a$roduction unit at o$esti 7eordeni %Il"ov count*( wit# a ca$acit*o" 250 tons $er da* $lanned investments include a $owder $aint$roduction "acilit* "or t#e industrial segment

stablis#ed a )2) de$artment in order to increasedirect sales to contractors and to real-estate develo$ers

ey !rands

!avana %$remium( Innenweiss and Rost %mainstream(

<=I<=<;www$olicolorro

%ey )ss'es

T#e com$an* w#ic# is controlled b* two investment"unds @ RCON!TR;CTION CIT7 2 and RO/NIN IN=!T/NT8;N reorganised its activit* in 200D t#us creating si4 divisions:rc#itectural utomotive Resins Industrial Coatings !$ecialC#emicals and T#ermo Insulation moreover t#e com$an*renounced at 20E o" its $ort"olio as $art o" t#e samerestructuring $rocess

/ost o" its $roduction was relocated wit#in )ulgariansubsidiar* OR<C'I/ %onl* industrial and auto $aints are still$roduced in )uc#arest( t#e restructuring $rocess will continuewit# t#e relocation o" t#e entire $aints $roduction in )ulgaria

Com$leted a 5 million ;R investment in a $ol*st*rene

$roduction unit in )uc#arest and an ad#esives and $utt*$roduction "acilit* in )ulgaria

ey !rands

!$or Iris Creative ect eko ro"essional laruralc#id

E?+E wwwdeutekro

%ey )ss'es

T#e com$an* is owned b* =NT INTRNTION7 an


wwwmarketsco$ero 0

http://www.fabryo.com/

http://www.policolor.ro/

http://www.deutek.ro/

http://www.fabryo.com/

http://www.policolor.ro/

http://www.deutek.ro/



merican investment "und ;nderwent a re-branding $rocess relinJuis#ing t#e

u"a brand $ro$ert* o" t#e <erman grou$ /88RT %t#e "ormerowner o" t#e com$an*(

cJuired in 200 "or a$$ro4imatel* 2H million ;R twoad#esives and mortars $roducers: )N<O!! CO/I/P%$roduction unit at Ca$usul /are Clu. count* 250000 tons $er*ear ca$acit*( and !CN %$roduction unit at 8undulea Calarasicount* 10000 tons $er *ear ca$acit*( bot# com$anies $roducet#e )auleiter brand

Investments are directed towards marketing t#ecom$an*3s brands @ Oskar !u$er&eiss anke^ @ so t#at tocom$ensate relinJuis#ing t#e #ig# awareness u"a brand

T#e $aints $ort"olio com$rises about D0E ecologicalwater-based $roducts

ey !rands

anke^ !u$er&eiss eutek roF Oskar )auleiter

%ad#esives X mortars(

3+=3><;<;3+I<

wwwa$laro

%ey )ss'es

T#e com$an* #as <reek s#are#olders and is structuredinto t#ree divisions: construction materials logistics andelectronic eJui$ment distribution

T#e com$an* $lans to se$arate t#e constructionmaterials division into a se$arate entit* T7! INT! structuredinto "our divisions: $aints and varnis#es ad#esives insulating$roducts and sealing $roducts

T7! and 8)R>O $lan to merge and t#us unite t#eirbuilding and Fnis#ing materials o$erations

roduction ca$acit* %Tunari "acilit* Il"ov count*(:50000 tons $er *ear "or $aints and $lasters and 150000 mY "ore4$anded $ol*st*rene boards

)2C distribution c#annels account "or 0E o" M$la$roducts sales

ey !rands

$la %tlas ro"essional 7ine $$lications(


wwwmarketsco$ero 1

http://www.apla.ro/

http://www.apla.ro/



Pr)c)nrices o" raw materials #old about D0E o" $roduction costs and re$resentabout 50E o" t#e $aint $rices at consumer level T#e constant increase in$rice o" raw materials %over H5E in 2011 com$ared to 200 and about10-15E in *ear 2012 vs 2011( #as led to signiFcant increase in $rices ont#e decorative $aints market

In 2011 $rices "or $aints at consumer level #ave raised b* a$$ro4imatel*5-10E &it# t#e market declining and $roducers #aving to lower t#eir$roFtabilit* margins in order to cover some o" t#e increase in costs anumber o" $la*ers #ave e4ited t#e market wit#in t#e $ast "ew *ears orcurrentl* risk insolvenc*

&as#able $aints are generall* sold in 15l %25 kg( $lastic containers butcan also be "ound in 5l and 5l containers /ost su$er-$remiumwas#able wall $aints are im$orted

Marke(

#r)&ers

T#ere is growing demand "or colour $aints des$ite t#e "act t#at

t#e w#ite $igment is still t#e most widel* used !igniFcant growt# "or u$$er-mainstream and $remium $roducts

%as com$ared to $revious low levels o" t#ese segments(

Increase in sales made t#roug# )2) c#annels

7ocal $roducers increased e4$orts during t#e market decline$eriod

/arket $otential "or $aints remains #ig# des$ite current downturno" t#e construction sector %due to $roducts3 im$ortance wit#inre#abilitation works(

ecorative $lasters

O&er&)e6 T#is section re"ers onl* to Mwet Q Mread*-mi4ed decorative $lastersused "or "acades

T#e largest $la*ers active on t#e decorative $lasters segment aregeneral $aints $roducers #owever some $la*ers active on t#e wallFnis#ing building materials market %eg building ad#esives and dr*mortars 6ooring etc( are also involved on t#is segment %eg );/IT'N7(

ecorative $lasters sold on t#e Romanian market include silicone-

based silicate-based silicone-silicate-based acr*lic-based and mineraldecorative $lasters

Marke( s)De

Estimatedmar&et"olme atarond 18 .20 thosandtons in 2011

stimated market volume "or decorative $lasters decreased "rom about25 t#ousand tons in *ear 200 to about 1 - 20 t#ousand tons in 2011 T#e $roduct is considered in its earl* stages o" develo$ment in Romania%wit# A0 @ 50E volume growt# $ace in eac# o" t#e *ears 2005 200K and200B( and demand is still muc# below t#e real $otential T#us it ise4$ected t#at t#e decorative $lasters segment $er"orms slig#tl* bettert#an t#e $aints market


wwwmarketsco$ero 2



Marke(s(r'c('re

7ocal $roduction accounts "or most o" t#e overall market "or decorative$lasters b* volume lso acr*lic decorative $lasters seem to dominatet#e market accounting "or a$$ro4imatel* B5-5E o" t#e overall marketonl* 5-10E o" t#e market volume was re$resented b* mineraldecorative $lasters t#e rest being #eld b* ot#er t*$es o" decorative

$lasters wit# inconseJuential s#ares %silicone-based silicate-based andsilicone-silicate-based(


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Co+3e()(orlandsca3e

lt#oug# t#e* are a relativel* new $roduct "or t#e Romanian marketdecorative $lasters #ave a crowded com$etitive landsca$e wit# severalwell entrenc#ed local $lants %w#ic# account "or t#e largest $art o" t#e

market(

)esides building X Fnis#ing materials international grou$s %wit# local$roduction ca$acities @ eg );/IT 'N7( anot#er categor* o"$la*ers is re$resented b* t#e general $aints and varnis#es local$roducers %;T 8)R>O O7ICO7OR O)R etc( w#ic# #avea$$roac#ed t#is segment onl* recentl* %in t#e $ast H - 5 *ears(/oreover new $la*ers suc# as /R/ORIT %a N;8 com$an*( or7!T #ave also invested in entering t#e decorative $lastersmarket

In"ol"emento( maor drymortars prodcers inthedecorati"e plasterssegment

ompany omment ey !rands

);/IT

T#ree $roduction "acilities in)uc#arest Teius %lba count*( and)olintin eal %<iurgiu( T#e $lant in)uc#arest $roduces $aints anddecorative $lasters and #as a *earl*$roduction ca$acit* o" 12000 tons

Nano$or

O$en

'N7 mong to$ $roducers o" Fnis#ing

materials in t#e construction sector%building ad#esives sealants etc(

Ceresit

7!T

T#e building ad#esives andmortars $roducer "rom Oradea %)i#orcount*( com$leted in 200 a$roduction line "or $aints decorative$lasters and read*-mi4 ad#esiveswit# a total $roduction ca$acit* o"0000 tons $er *ear

ecolast

Marke(dr)&ers

/a.or $aints and decorative $lasters $la*ers started to sell Q$roduce $ol*st*rene ad#esive and in some cases even e4$anded$ol*st*rene boards in order to su$$l* customers wit# a com$lete

"aZade t#ermal insulating s*stem %and t#us increase saleso$$ortunities "or decorative $lasters too(

<rowt# o" dis$osable income $er ca$ita in Romania %u$ until200D( led to increased $re"erence "or s$eciali,ed and more st*lis#solutions "or "acades suc# as decorative $lasters and alsograduall* towards #ig#-Jualit* $roducts


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ainters3 Fllings and $lasterboards

O&er&)e6

!trong *earl* increases on t#e $lasterboard market in $re-crisis *ears

starting wit# 2005 wit# a structural c#ange in t#e market "romim$orts to local $roduction lasterboard market is dominated b*t#ree $la*ers

ainters3 Fllings market a$$ears to be dominated b* $la*ers activeon t#e building ad#esive market suc# as 'N7 /< T7!CORORTION <))RO and 7!T ainters3 Fllings market ismore "ragmented as com$ared to $lasterboard

In recent *ears t#ere #as been a s#i"t "rom usage o" $ainters3 Fllingsto $lasterboards %"or wall Fnis#ing works( as work"orce crisis and t#e"ast $ace o" construction works increased t#e need "or more$roductive solutions

Marke( s)De ro6(h

In terms o" volume local $la*ers estimate t#e $lasterboard market in200 at around B0-B5 million m2 and a$$ro4imatel* A0-A2 million m2 in2012 !lig#t increases are envisaged "or *ears 201H @ 2015

/arket volume "or $ainters3 Fllings increased signiFcantl* in $re-crisis*ears but registered a slig#tl* more $ronounced decline in t#e "ollowing*ears t#an t#e general construction market la*ers estimate t#at t#elocal market contracted wit# about 15E in *ear 2011 vs 2010 and"orecasts "or 2012 and 201H are rat#er $essimistic

Marke(s(r'c('re

Im$orts o" $lasterboards began to lose t#eir s#are in consum$tion a"terinvestments in local $roduction "acilities were undertaken wit#in t#e2005-200 $eriod Currentl* it is estimated t#at local $roduction covers

over 50E o" t#e local market demand wit# t#e e4ceeding $roductionbeing e4$orted

$$arentl* t#e largest s#are o" t#e market value "or $lasterboards is#eld b* t#e commercial segment "ollowed b* t#e industrial Q logisticsectors and b* t#e o+ces segment T#e residential segment is in itsdevelo$ing stage wit# strong growt# e4$ected to occur on t#is$articular segment 'owever t#ere some $la*ers o$ining t#at alla"orementioned segments #old "airl* similar s#ares in $lasterboardsusage

/arket breakdown b* $roduct t*$e reveals t#at t#e D5 mm-t#ick$lasterboard #as signiFcantl* lost market s#are in "avour o" t#ickerboards %es$eciall* 125 mm( lso s$ecial $lasterboards suc# as Fre-

resistant or water$roo"ed become increasingl* $o$ulars regards $ainters3 Flling local $roduction is dominant %im$orts areinconseJuential(

Co+3e()(orlandsca3e

PASTE"OAR#S

T#e bulk o" t#e market is re$resented b* brands #eld b* RI<I! N;8<RO; %including NOR<I! w#ic# was acJuired at international level b*N;8 in 200A besides N;8 brand( and !INIT %$art o" TP <RO;recent market entrant w#o boug#t at international level 78R<3sdivision "or $lasterboards in 2012(


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lease note t#at t#ese com$anies generall* also #ave signiFcant s#areson t#e $ainters3 Fllings market es$eciall* RI<I! and N;8

lasterboard manu"acturers usuall* sell com$lete solutions: besides$lasterboards t#e* oer all ot#er necessar* $roducts "or mounting t#e$lasterboard %eg: metallic su$$orting $roFles screws Fberglass

netting and $ainters3 Fllings(

lease see below brie" overview o" $la*ers active on t#e $lasterboardmarket:

%NAUFwwwknau"ro

%ey )ss'es

N;8 Romania was "ounded in 1DDH as a subsidiar* o"N;8 <mb' ustria and covers t#e local market wit#$roducts delivered "rom "actories in ot#er ; countries%)ulgaria oland etc(

T#e com$an* "ro,e a B0 million ;R in a $roduction "acilit*at 'uedin %Clu. Count*( wit# a $roduction ca$acit* o" H5million m2 in 200D due to un"avourable market conditions

NOR<I! %$art o" N;8 grou$( a$$arentl* markets$roducts solel* t#roug# R)!?; t#e leading buildingmaterials distributor in Romania %not via Romaniansubsidiar* o" N;8( it is most likel* t#e $roducts areim$orted "rom oland

Turnover in *ear 2011: 2H million ;R

SINIATwwwla"argero

%ey )ss'es

art o" TP <RO; entered t#e Romanian market t#roug#t#e acJuisition o" 78R< <I! in *ear 2012

roduction "acilities: a $lasterboard $lant in )uc#arest % wit#a ca$acit* o" 1B million m2 *earl* ca$acit*( and a $lasters$lant in g#ires Clu. count* %50 t#ousand tons $er *ear(

T#e com$an* announced in 2012 t#at it $lans to resumeinvestments in a new $roduction "acilit* "or $lasterboards in Turceni %<or. count*( w#ic# were Frst announced in 200com$an* o+cials declared t#at t#e construction o" t#e new$lant will reJuire 20-H0 million ;R investments and will

#ave over 1B million m2 $roduction ca$acit* Targets a 2BE market s#are in 201H

Turnover in *ear 2011: 22K million ;R

RI$IPSwwwrigi$sro

%ey )ss'es

art o" )) <RO; taken over b* !INT-<O)IN in *ear


wwwmarketsco$ero K

http://www.knauf.ro/


http://www.rigips.ro/

http://www.knauf.ro/


http://www.rigips.ro/



2005

T#e com$an* #as a $roduction ca$acit* o" 12 million m2 o"$lasterboards Q *ear based in Turda %Clu. count*( "urt#er toa H1 million ;R investment

roduction ca$acit* "or g*$sum based $roducts reac#ed

1A0000 tons Q*ear T#e com$an* also im$orts some o" t#e $lasterboards sold

Turnover in *ear 2011 %"or Romanian !INT <O)IN divisionincluding RI<I! o$erations(: KHH million ;R


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@ore(ragmented

competitorlandscape

PAINTERS FIIN$S

ainters3 Fllings market a$$ears to be muc# more "ragmented as itmainl* com$rises bot# com$anies active on t#e $lasterboard market

and b* a series o" $la*ers w#ic# are active on t#e building ad#esivemarket as well %eg: 'N7 /< <))RO 7!T etc(

Marke(dr)&ers

One o" t#e driving "actors be#ind t#e ra$id e4$ansion o" $lasterboards*stem as a wa* o" Fnis#ing works were t#e )ncreas)n cos(s o*sk)lled la5o'r in t#e construction sector w#ic# meant more e+cientsolutions were reJuired %"actor in "avour o" $lasterboards(

On t#e ot#er #and lack o* 3ro*ess)onal 3las(er5oard +o'n(ers im$edes market develo$ment as $oor-Jualit* o" construction works is insome cases wrong"ull* associated to t#e tec#nical $er"ormance o" t#e$roduct

!ome market $la*ers suggest t#ere are *e6 'arr)es ha&)n ood'al)(y y3s'+ and t#ere"ore access to Jualit* raw materials isdi+cult One solution to access more easil* raw materials would besetting u$ more desul$#uri,ation "acilities at large $ower $lants in orderto obtain s*nt#etic g*$sum


wwwmarketsco$ero



8looring solutions

8looring market overview @ !tructure o" anal*,ed segments

eramic Noortiles$ par,et and

wall.to.wallcarpet #J.+.J) represent the !l& o( theNooring mar&etand are presentin all segments o( !ildingconstrction

Ma)n Loor)n 3rod'c(s +arke( s)De )n Ro+an)a 8&ol'+e –+)ll)on s+9

H2

15

0

11

22

HH

200D

2H

1B

A5

0

10

20

H0

2012L

!ource: Previous research, desk research update, @arketscope estimates6ote: %he term LparuetM includes not onl& wooden paruet (solid wood, engineered paruet, but also laminated paruet (which actuall& represents the bulk of this categor& of+ooring used in Romania

8looring $roducts market #as registered a signiFcant dro$ in *ear 200D%a$$ro4imatel* minus H0E( as bot# new building construction and

re"urbis#ments %t#e latter accounting "or a large s#are o" 6ooringmaterials consum$tion in Romania es$eciall* in t#e residential segment(were #indered b* t#e Fnancial blockage T#e overall market continued todro$ eac# o" t#e ne4t *ears to t#e levels s#own above arJuet is t#e onl*segment t#at seems to #ave got back on a slig#t u$ward trend

Ceramic tiles %"or 6oor and wall( Although the chapter anal&$es +ooring solutions, wall ceramic tiles (faience are included in the overall categor&, as ceramic products for +oors and walls are usuall& treated as a whole b& market participants

@ar&et si9e$strctre and

Im$orts continue to dominate t#e market t#e onl* local $roduceramounting "or roug#l* 20E o" market volume in *ear 200 %main countries


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C

e r a m i c t i l e s

a r J

u e t

& T &

C e r

a m i c t i l e s

a r J u e t

& T &



trends o" origin "or im$orts were countries wit# tradition in t#e industr* @ Ital*!$ain and g*$t and countries t#at are usuall* $erceived as su$$liers o"low cost $roducts @ C#ina Turke*( 'owever im$orts declined in t#e"ollowing $eriod amounting to B0-B5E o" total sales in *ear 2011 T#eevolution o" t#e ceramic tiles market is outlined in t#e c#art below


emand (orceramic tiles inthe Nooringmar&et morea-ected thandemand (orlaminated par,et

/arket value #as grown "rom 150 @ 1K0 million ;R back in 2005 to a $eak

o" H00 million ;R in *ear 200 %#uge lea$ determined not onl* b* volumeincrease but to gradual orientation towards more e4$ensive $roducts("ter t#e dro$ in 200D t#e market was mostl* sustained b* $rivatere"urbis#ment $ro.ects initiated b* natural $ersons In 2011 market valuedro$$ed to about 100 @ 1H0 million ;R verage $rices in *ear 2011 wereestimated at about 5 ;R $er sJm 8or t#e "ollowing $eriod $la*ers$redict stagnation %o$timistic scenario( or a continued decline taking intoaccount t#e market3s de$endence to t#e local construction segment andt#e relativel* small number o" on-going construction $ro.ects n increasein t#e construction sector would bring a growt# o" t#e 6ooring solutionmarket onl* a"ter a $eriod o" time as a construction $ro.ect enters t#eFnis#ing $#ase towards its end

s regards t#e Jualit* segmentation most consumers seem to selectMeconom* Q budget $roducts at a retail cost o" A @ K ;R Q sJm %w#ic##eld around #al" o" t#e volumes in *ears 200-200D( Recentl* consumersseem to $re"er large tiles %20PA0 cm or 25PA0 cm( instead o" small ones%20P20 cm or H0PH0 cm( lso most consumers seem to $re"er elegantdecorative tiles wit# dierent colours or decorations

ompetiti"een"ironment

ustrian grou$ 7!!7!)R<R owns t#e onl* active local $roduction"acilit* o" ceramic 6oor and wall tiles located in Clu.-Na$oca wit# a current$roduction ca$acit* o" K5 million sJm $lanned to be increased to about5 sJm in *ear 201H due to a 1A million ;R investment %t#e com$an*also #as two closed $lants: one in 7ugo. Timis Count* closed in *ear 200and one in )uc#arest closed in *ear 200D due to #ig# stocks and low

demand( 7!!7!)R<R re$resentatives estimate t#e com$an* #adaround A0-A2E market s#are in *ear 2011 %including im$orts( but t#elevel could be overestimated not#er inactive local $roduction $lant islocated at Reg#in /ures Count* and owned b* Ceramica 7a,ar

)ulgarian $roducer I CR/IC! w#ic# o$erates a $lant in )ulgariasituated at onl* 10 km "rom )uc#arest #as managed to reac# an a$$ro410E market s#are in 2011 according to own statements

Ot#er $ower"ul com$etitors are re$resented b* im$orters wit# largenational or regional distribution ca$acities %ware#ouses retail outletss#owrooms(: 7T !I<N TI<R /IR O <RO; !!) <IRO/R/IR CO/ lso wort# mentioning is t#e "act t#at some o" t#ose ma.or


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im$orters are also distributors "or 7!!7!)R<R and I CR/IC! T#ecom$etitive environment is com$leted b* large building materialsdistributors and I> c#ains %R)!?; );C RTIR)RICO!TOR /)INT /N etc( as well as b* a m*riad o" smallerim$orters and distributors

=argestspeciali9ed players are=3>>E=>E;:E;$;E@IE; <@and +I:E; 3@I;3

To3 s3ec)al)DedG 3layers on (he Loor and 6all cera+)c () les

+arke( )n Ro+an)a 8('rno&er )n +)ll)on EUR9

22

2A

H2

KB

1A5

1KB

2BA

1./

-.:

-.;

/.-

1;.<

--.;

:1./

0 5 10 15 20 25 H0 H5

a,o

!!)

<irom

:elta :istribution

7asselsberger

remier Com

Tiger mira

Turnover 2011

Turnover 2010

9 !peciali$ed 1 ceramic +oor tiles is the ke& product within portfolio!ource: @inistr& of "nance3 6ote: Fasselsberger)s turnover refers onl& to the companies producing < selling ceramic tiles (the Austrian group also operates other business in Romania

&all-to-wall car$et

@ar&et si9e$strctre andtrends

T#e wall-to-wall car$et market si,e in Romania reac#ed a ma4imum 10million sJm in *ear 200 "ollowing a $eriod o" H - A *ears o" sustainedgrowt#"ter t#e renovations o" old dwellings #ad determined "or a long time t#e

su$remac* o" c#ea$ residential wall-to-wall car$et in t#e market t#e Mrealestate boom %and es$eciall* t#e d*namics in t#e o+ce building and'ORC segments( #as drawn an increasing demand "or #ig#er Jualit*$roducts used wit#in non-residential buildings including $ro"essional wall-to-wall car$et Mtiles as s#own in t#e c#art belowIn t#e 200D-2011 $eriod t#e market #ad a 15-20E decline *ear-on-*ear

Wall0(o06all car3e( +arke( s)De s(r'c('re 5y 'saCe7

)n Ro+an)a 8+)ll)on +-9

<7> <7-

- -7:

2 H

25 2B

0

5

10

15

200B 200 2012L 2015L

6on-residential

Residential


@ar&et almostentirely co"ered!y imports

Im$orts "rom countries like )elgium Turke* <erman* Net#erlands etcre$resent t#e bulk o" t#e market as t#e "ew local car$et X te4tiles$roducers t#at #ave wall-to-wall car$et in t#eir $ort"olios a$$ear to #ave


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100A5 5

D5



onl* limited and occasional involvement in t#e wall-to-wall car$etsegment

s regards market3s structure b* $roduct Jualit* t#e mainstream segment#olds #al" o" t#e volumes w#ile Meconom* Q budget segment accounts "orA0 @ A5E

ompetiti"een"ironment

&all-to-wall car$et su$$l* in Romania is rat#er concentrated A ma.or$la*ers #olding 50 @ 55E o" market volume but can also be considered"ragmented as t#e rest is s$lit between tens o" $la*ers In *ear 2012IRITP and RO<! two o" t#e main $la*ers on t#e market enteredinsolvenc* bot# com$anies currentl* making eorts to avoid bankru$tc*I" eit#er $la*er would e4it t#e market su$$l* would become even more"ragmented

To$ im$orters-distributors o" wall-to-wall car$et usuall* are generalsu$$liers o" Mwarm 6ooring solutions %also including $arJuet car$ets=C( and #ave a $ower"ul retail coverage %#owever some o" t#em aremore "ocused on )2) sales( IRITP #as been t#e wall-to-wall car$etmarket leader in t#e late 2010s and one o" t#e ma.or retail c#ains in t#e

Fnis#ing materials sector %t#eir "ocus is still 6ooring alt#oug# $roductrange #as been diversiFed latel*(

2 ot o( 4 maor players ininsol"ency in year 2012

To3 3layers on (he 6all0(o06all car3e( +arke( )n Ro+an)a

8('rno&er )n +)ll)on EUR9

HAB

0B

12H

A1A

7<

1/7;

::7/

0 10 20 H0 A0 50

irite4

ro Con"ort

4 er$etuum

roges

Turnover 2011

Turnover 2010

!ource: @inistr& of "nance6ote: PiriteH and Proges have 48N outlets and turnover includes sales of a various productrange (with wall-to-wall carpet accounting /8 * 78K of turnover, while for the other twocompanies, wall-to-wall carpet holds a more signi"cant share within total turnover3

Ot#er noticeable $la*ers include I<O %$ower"ul outlet c#ainconcentrated in t#e &estern Nort#ern and Central regions o" Romania(

RO/!T _COR RO/OTP 87OOR CON!TR;/ and !ONR<e* brands $resent on t#e Romanian wall-to-wall car$et market are:

"rom )elgium: omo )alta ITC Ralu4 ssociated &eavers "rom Net#erlands: =' esso 7ano Inter"ace 'euga "rom <erman*: =orwerk Nord$"eil 'albmond "rom ;: )urmate4 R*alu4 "rom 8rance: nia-Tarkett

arJuet and ot#er 6ooring solutions X Fnis#ing $roducts


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=aminated Noorsoltions

dominate par,et segment

lt#oug# $roducers o" massive wood %solid( $arJuet do no consider t#atlaminated 6ooring is $art o" t#e $arJuet market t#is cost-eectivesolution is still $re"erred in Romania due to t#e low budget reJuired

7aminated 6ooring is estimated at about 1H million sJm in *ear 2011

%a$$ro4imatel* H0E decline com$ared to *ear 200D( la*ers on t#emarket re$ort t#at massive wood $arJuet declined b* 10-20E in *ear2010 as com$ared to *ear 200D w#ile laminated 6ooring remained atsimilar levels in t#e same time "rame

7aminated 6ooring is estimated to #old a$$ro4imatel* 0E o" t#e total$arJuet market lt#oug# t#e s#are o" t#is $roduct is e4$ected to slig#tl*diminis# t#e income o" t#e average Romanian is still too low "or massivewood to become t#e number one c#oice in t#e residential segment Total$arJuet market in 2011 is estimated at 15-1B sJm %mostl* im$orts(

roduction o" $arJuet seems to be "ragmented in Romania as no local$roducer seems to #ave $roduction lines "or laminated 6ooring /ain

$la*ers in t#e local $arJuet industr* besides t#e ma.or im$orters andretail grou$s alread* mentioned wit#in wall-to-wall car$ets and ceramictiles markets are RONO!N %im$orter o" $arJuet even t#oug# it #aswoodworking "acilities in Romania in )rasov and !ebes lba Count*(<<R %$roduction "acilities in Radauti !uceava Count*( and )R7IN%$roduction "acilities in )acau(

T#e "ollowing table outlines advantages and disadvantages o" 6ooringsolutions on residential and non-residential segments as $erceived b*market $la*ers and Romanian customers:

;esidential on.residential

3d"antages anddisad"antages o(Nooring soltions

7aminated $arJuet is t#e $re"erredsolution "or cost-eectiveness andeasiness in mounting andmaintenance also gives $ossibilit* o"Mst*lis# combinations wit# smallcar$ets

&all-to-wall car$et is t#e $re"erredsolution in new o+ces #otels ande4#ibition centres due to t#ermaland sound insulation $ro$ertiesvariet* o" models and sometimeslower overall $rice

&all-to-wall car$et is Mwarmer andabsorbs sound

Ceramic tiles =C and ot#erindustrial 6ooring solutions are$re"erred in commercial s$aces#os$itals and ot#er s$ecial $ublic$laces due to easier maintenanceand $rice

Indstrial Nooringsoltions mar&etK in early stage o( de"elopment

T#is segment #as witnessed some recent develo$ments due toim$lementation in Romania o" ; #*giene regulations concerning #ealt#and "ood industr* s$aces 'owever it still #as t#e c#aracteristics o" a non-mature market suc# as "ew su$$liers low awareness wit#in targetindustr* sectors and mounting services o" below average Jualit*

Jide range o(massi"e wood par,et Gnishing prodcts

lt#oug# t#e massive wood $arJuet sales are still rat#er modest inRomania t#e su$$l* o" Fnis#ing $roducts "or massive wood 6oors isvaried including international brands 7I /I )ON ;IN 8OR)O T'O/!IT RCO77 C'I/I=R RT7IT or !I


wwwmarketsco$ero DH




wwwmarketsco$ero DA



Construction eJui$ment

'eav* construction eJui$ment

O&er&)e6 T#e market is recovering a"ter t#e Fnancial crisis %B0E increasein 2011 a"ter a minimum reac#ed in 200D-2010 $eriod(

2-H large $la*ers dominate t#e market n im$ortant $art o" eJui$ment sold is re$resented b* second-

#and units %alt#oug# t#e s#are o" suc# sales is decreasing( )ack#oe loaders #old t#e largest s#are in t#e construction

eJui$ment market b* $roduct t*$e

Marke( s)De 'eav* construction eJui$ment market value was estimated in *ear200 at over A00 million ;R u$ b* a$$ro4imatel* 10E "rom HK0

million ;R in *ear 200B /arket value in *ear 200B grew b* B0E ascom$ared to *ear 200K "urt#er to im$ressive $er"ormance in t#econstruction works sector

Initial estimates on t#e #eav* construction eJui$ment market "or *ear200 "orecasted a growt# rate o" a$$ro4imatel* H0E 'owever a"ter agrowt# o" a$$ro4imatel* H0E in t#e Frst D mont#s o" *ear 200 salesdro$$ed in ?A des$ite e4$ectations w#ic# cut *earl* growt# rate "or200 "rom H0E to around 10E

In *ear 200 a$$ro4imatel* HH00 units o" relevant $roducts were soldon t#e Romanian market o" w#ic# 2A00 units o" $rimar* eJui$ment%eg: e4cavators loaders back#oe loaders com$act eJui$ment etc(

and D00 units o" secondar* eJui$ment %eg: cranes - including auto -road building mac#iner*(

>ear 200D broug#t a slum$ in sales b* a$$ro4imatel* B5E in volumeterms %B0 units in 200D vs HH00 units in 200( w#ic# reduced t#emarket below t#e *ear 200K level In *ear 2010 volumes continued t#edecline reac#ing a$$ro4imatel* KB5 units %1HE decline as com$ared tot#e $revious *ear(

>ear 2011 broug#t a signiFcant recover* o" t#e market due toresum$tion o" large $ro.ects suc# as commercial centres or s$ortscentres T#e increase was o" a$$ro4imatel* B5E reac#ing 1200 units)* value t#e market was estimated to about 0-100 million ;R in2011 la*ers consider t#at current number o" units sold a$$roac#es t#enormal absor$tion $ower o" local market

!old number o" units during t#e Frst semester o" 2012 was about AB5-AD0 units registering a slig#t decrease com$ared to t#e similar time"rame o" t#e $revious *ear %AB units sold in t#e Frst semester o" *ear2011( la*ers on t#e market e4$ect a slig#t increase in sales in t#e"ollowing $eriod

Marke( Out o" a$$ro4imatel* 1200 units sold in 2011 a$$ro4imatel* KK units


wwwmarketsco$ero D5



s(r'c('re %WB2E( were $rimar* units: 1A1 e4cavators units %W1KE out o" total$rimar* units( 101 loaders units %W12E out o" total $rimar* units( 1ADcom$act eJui$ment units %W1BE out o" total $rimar* units( and AB5back#oe loaders units %W55E out o" total $rimar* units( lt#oug#back#oe loaders continue to be in demand users seem to s#ow growinginterest in s$eciali,ed eJui$ment

@ain types o( e,ipment /machinery

!econdar* units re$resented about 2E o" t#e market in 2011 %b*number( Road eJui$ment %com$actors $avers etc( was t#e $roductcategor* wit# t#e most signiFcant increase on t#e market %12E growt#in *ear 2011 com$ared to *ear 2010( Com$lementar* eJui$ment"ollowed t#e general trend o" t#e market %B0E growt# in 2011 com$aredto 2010(

$$ro4imatel* 25E o" e4cavators sold in Romania in *ear 200 #ad ano$erating weig#t o" under 12 tons w#ile H0E o" loaders sold in Romaniain 200 #ad an engine $ower o" over 150 & Q 200 ' )ack#oes wit#int#e $rice range o" 50 - 100 t#ousands ;R seem to remain t#e $roductwit# t#e #ig#est sales on t#e market %b* number(

!econd-#and eJui$ment still #olds a signiFcant s#are o" t#e market#owever new eJui$ment #as increased its s#are mostl* due to increasein available budgets in recent *ears !econd-#and $urc#ases were alsoin6uenced %to a minor e4tent( b* $roblems wit# stock availabilit* o"certain eJui$ment

$$ro4imatel* K0E o" eJui$ment $urc#ases are made via leasing

Co+3e()(orlandsca3e

T#ere is onl* one local $roducer o" $rimar* eJui$ment %RO/P @ w#ic#$roduces among ot#er e4cavators and com$actors @ #owever

a$$arentl* wit# no ma.or role in t#e market( and one $roducer o"secondar* eJui$ment %;/T @ w#ic# $roduces autoQmobile cranes and"orkli"t trucks besides mining eJui$ment and ot#er s$ecial cranes( w#ileall ot#er com$etitors are im$orters T#e main $la*ers on t#e #eav*construction eJui$ment market in Romania are members o" ;C%ssociation o" istributors o" 'eav* Construction Jui$ment($$arentl* largest $la*ers on t#e market are )R<RT-/ONNO>;R/RCO/ and TRR RO/NI

E;:E;3+ @<<YE?;

wwwbm-catro

4clusive dealer o" t#e Cater$illar brand T#e com$an*3s#eadJuarters are situated in /ogosoaia %Il"ov count*( but it also#as local o+ces andQor service "acilities in )uc#arest TimisoaraClu. )rasov <alati and Constanta

!ells an e4tensive range o" Cater$illar construction industrialand Juarr* eJui$ment new or second-#and and F4ed or mobilebraking and sorting eJui$ment "rom /T!O /inerals

T#e com$an* oers t#e $ossibilit* to rent mac#ines andeJui$ment it also oers a"ter sales su$$ort %maintenance andre$air o" eJui$ment( and Fnancing solutions "or acJuiringeJui$ment

+rno"er 2011 C81 million E?;

MARCOMRMC ;/

wwwmarcomro

!ole distributor o" omatsu %a$anese $roducer o" constructionand mining eJui$ment( in Romania t#e com$an* also distributesot#er brands suc# as otain %cranes( <rove %autocranes( !andvik


wwwmarketsco$ero DK

http://www.bm-cat.ro/

http://www.marcom.ro/

http://www.bm-cat.ro/

http://www.marcom.ro/



etc ccording to com$an* o+cials /RCO/ is market leader on t#e

back#oe loader e4cavator and loader segments Total sales in 200B reac#ed 1100 units o" w#ic# B0 units were

omatsu 'as sales o+ces across t#e countr*: )aia /are )rasov

)ucuresti %central o+ce( Constanta <alati Iasi Timisoara and Turda

Invested several million ;R in recent *ears in distributionnetwork e4$ansion

'as new and second-#and eJui$ment in its $roduct $ort"olio andoers Fnancing solutions

+rno"er 2011 286 million E?;

TERRAROMANIA

wwwterra-romaniaro

resent on t#e Romanian market since *ear 2001 localsubsidiar* o" TRR );/!C'INN

It is sole distributor "or Romania o" C) eJui$ment ot#er brandsinclude ')/ Nobas Comansa Crown Nissan 8orkli"t alFnger

umbo and llroun +rno"er 2011 24C million E?;

<ther maor players

Ot#er ma.or $la*ers on t#e market are: CASE UTIA!E CONSTRUCTII@ aut#orised reseller o" C!

construction eJui$ment and brands suc# as Cesab 8urukawaumec O+cine /eccanic#e /)' etc

$ENCO ;:: distributor "or ;T/I!TR 7I)'RR T7!COCO <'7 )O/< etc

IRCAT0CO@ distributes a wide range o" construction and Juarr*eJui$ment main brands distributed are oosan )obcat )<-=olvoand 'artl owercrus#er

%REIS CONSTRUCT@ distributes !C'&IN< !TTTR eJui$ment

used "or concrete $roduction Q la*ing IE"HERR ROMANIA@ local subsidiar* o" <erman $roducer

7I)'RR distributing e4cavators bulldo,ers cranes etc on t#elocal market t#e com$an* #as distribution $oints in Oto$eni Il"ovCount* %main o+ce( Timisoara iatra-Neamt Constanta and Clu.-Na$oca

MEM IMPE@ sells concrete Q as$#alt mi4ing stations $roducedb* //NN road building eJui$ment b* ROTC etc

PROTRUC% ECHIPAMENTE CONSTRUCTII@ distributes N&'O77N construction eJui$ment and I=CO trailers

SCAN#I% POI%RAFT@ sells =O7=O construction eJui$ments#i$Qboat motors and in6atable ra"ts

TRACTOR PROIECT COMERT@ main im$orted $roducts areconstruction eJui$ment s$eciali,ed in "oundation and drilling work%)auer lemm rakla RT< 8ambo ileco etc( and loadingeJui$ment %Tere4 <enesis ins#o"er 'ammel(

VOVO ROMANIA@ sells a wide range o" construction eJui$ment%including road building eJui$ment and #aulers

WIRT$EN ROMANIA@ local subsidiar* o" &IRT<N <rou$ @$roducer o" road building eJui$ment

O(her 3layers wort# mentioning are: CO!I/ TRIN<;RO/T <RO; 'IRO/ IN=!T O&R ) O&RTRO/P RCINI C'I/NT RT ;TI7 !TR &!T


wwwmarketsco$ero DB

http://www.terra-romania.ro/






/RT I/P 7PNR

O(her)n*or+a()on

ccording to some e4$erts on t#e Romanian market t#ere area$$arentl* ver* "ew com$anies w#ic# are able to deliver$ro"essional maintenance services "or eJui$ments

lso some e4$erts o$ine t#at eJui$ment dealers kee$ ver* lowstocks "or s$are $arts

In recent *ears numerous construction com$anies boug#t second-#and eJui$ment and it is e4$ected over t#e ne4t *ears t#ose units tobe re$laced


wwwmarketsco$ero D



ro"essional $ortable electric $ower tools1

O&er&)e6 *namic market t#at clearl* overcame t#e di+cult crisis $eriod %10-15E *-o-* growt# in *ears 2011 and 2012(

Numerous brands on t#e market wit# )O!C' and /IT clearl*dominating

8ragmented distribution

Marke( s)De It is estimated t#at market value "or $ro"essional $ortable electric $owertools reac#ed a$$ro4imatel* 20 million ;R in *ear 2011 %10-15Eincrease vs t#e $revious *ear(

"ter signiFcant dro$s in *ear 200D %W minus B5E vs 200 -a$$ro4imatel* B0 million ;R( and a more subtle decrease in *ear 2010%W minus10E( t#e market started to recover in *ear 2011 and ise4$ected to continue its ascending trend in *ear 2012 in s$ite o" lowerresults during t#e Frst mont#s o" t#e *ear %due to di+cult weat#erconditions w#ic# in6uence intensit* o" construction works(

Marke(s(r'c('re

Rotar* Q combi #ammers breakers and angle grinders #olda$$ro4imatel* K0E o" t#e total market "or $ro"essional $ortable$ower tools

Im$orts3 s#are #as decreased in recent *ears as local $roducer/IT started redirecting a s#are o" t#eir local $roduction "rome4$orts to t#e local market and /R!ON o$ened in 200D a$roduction "acilit* "or its ro"essional Tools division %RI<I brand(near Clu.-Na$oca %#owever RI<I is still in earl* stages o"develo$ment in t#e Romanian market(

Increase in demand "or cordless $ower tools measuring eJui$mentsemi-stationer* circular saws and diamond coring tools

ower tools wit# 7i-ion electrical accumulator re$resenta$$ro4imatel* H5-A0E o" t#e market

Co+3e()(orlandsca3e

/ain market $la*ers include %al$#abeticall*(: < )O!C' &7T%$art o" )7C N CR( 'I7TI 'ITC'I /IT /T)O and/I7&; ll multinational com$anies $resent wit# t#eir brands int#e Romanian market %eit#er wit# establis#ed local branc# or not( #avelocal distributors t#roug# w#ic# t#e* sell t#eir $roducts

Co+3anyT'rno&er

8+)l EUR-119

"r)e* 3roBle

RO"ERT "OSCH

wwwbosc#-$tro

5DH In Romania t#e )O!C' grou$ activates in several

business lines: $ro"essional electric $ower toolsautomotive $arts #eating boilers and w#ite goods

T#e grou$ #as 5 com$anies in Romania RO)RT )O!C'distributing auto $arts ventilation eJui$ment and $owertools

Im$orts t#ree $ower tools $roduct lines: $ro"essional %M)osc# blue( semi-$ro"essional %M)osc# green( and I>%brand name: !kil(

ccording to o+cial statements t#e $ower tools division

1 >ncludes drilling and demolition, diamond coring, cutting, screw fastening and direct fastening products


wwwmarketsco$ero DD

http://www.bosch-pt.ro/

http://www.bosch-pt.ro/



#as #ad a good evolution in *ear 2011 %10E growt#( andit is e4$ected a similar $ace "or *ear 2012 %consistentwit# t#e overall market growt#( !ales o" $ro"essional line$roducts and o" !I7 $roducts #ave been more d*namic @u$ 2HE in *ear 2011 vs t#e $revious *ear and u$ H0E invalue sales res$ectivel*

roducts launc#ed wit#in 2 *ears usuall* #old u$ to A0Eo" total $ower tools sales

es$ite a leading $osition in t#e market investments inRomania seem to target local $roduction "acilities "orautomotive division

HITIwww#iltiro

B

T#e com$an*3s $roducts #ave been $resent on t#emarket since *ear 1DD2 but t#e com$an*3s subsidiar*was establis#ed in *ear 2005

Own estimation o" market s#are: E 'as 5 s#owrooms in A cities: )rasov Clu.-Na$oca Timisoara %1 s#owroom eac#( and )uc#arest %2s#owrooms(

HITACHI 1

O$ened an o+ce in )uc#arest in 200B $rior to t#is saleswere coordinated b* t#e subsidiar* in 'ungar* mong most im$ortant distributors are: Rane4im !"a4

and 4$otrade

MA%ITAwwwmakitaro

10B1

nnual $roduction ca$acit* in *ear 200D: 1 million units$lant located near )uc#arest

$$ro4imatel* 100E *-o-* increase in turnover "or /akita; %$roduction division in Romania( in t#e 200D-2011$eriod

$$ro4imatel* DBE o" $roduction in 200D was e4$ortedbut in recent *ears t#e com$an* started redirecting asmall $art o" $roduction towards t#e local market

roduces in Romania #ammer drills angle grinders rotors"or $ower tools and ot#er $roducts Com$an* #as a$$ro4imatel* 200 distributors and

a$$ro4imatel* 0 service centres It is estimated t#at t#e com$an*3s market s#are in

Romania "or angle grinders is t#e #ig#est as com$ared tot#e s#ares #eld in t#e market "or an* o" t#e ot#er$roducts in $ort"olio

<ther !rands Ot#er $ro"essional $ower tools brands $resent on t#e Romanian market%t#roug# various distributors( include: ;!! R!! RO TOO7 8IN87P IT& C!7! R>O)I I7 )!T /I!TR etc

)esides all a"orementioned $la*ers one s#ould also note strong sales"or in#ell Romania %local subsidiar* o" <erman $roducer o" electric$ower tools( in#ell3s turnover in *ear 2011 reac#ed 5D million ;R In200 t#e com$an* invested H million ;R in t#e com$letion o" t#elogistic centre close to )uc#arest T#e com$an* #as t#ree $roduct lines:MRed @ $ro"essional $ower tools and gardening tools M)lue @ I>Qsemi-$ro"essional $ower tools and gardening tools Muto- auto tools mongin#ell Romania ke* accounts: /etro raktiker )ricostore !elgrosReal Cora Carre"our etc

1 %urnover includes both @akita companies in Romania: @akita Romania (import of electric power tools * turnover:

D3E million 0'R and @akita 0' (production of electric power tools * turnover: 3/ million 0'R


wwwmarketsco$ero 100

http://www.hilti.ro/

http://www.makita.ro/

http://www.hilti.ro/

http://www.makita.ro/



MAR%ET #RIVERS

ue to t#e "act t#at "or more and more buildings contractors use#ig#er Jualit* concrete it is e4$ected an increase in demand "ordiamond coring tools

)anning t#e usage o" corded electric $ower tools on metallicscaolding will increase demand "or cordless $ower tools !ales t#roug# I> store c#ains are e4$ected to kee$ u$ward trend

due to growing demand b* small com$anies or individuals active int#e re"urbis#ing works segment w#ic# $re"er to bu* t#eir tools %even$ro"essional lines( "rom I> stores





IV. )uilding materials distribution

O&er&)e6 la*ers estimate t#e building materials distribution market value ataround H5 billion ;R in *ear 2012 wit# a slig#t increase com$ared to2011 revious *ears #ave broug#t declines in t#e market wit# a slum$in 200D I> c#ains and large building materials distributors account "ort#e largest $art o" t#e market wit# I> c#ains3 s#are at around H5-A0E%at end-customer level( la*ers estimate t#at t#e I> c#ains3 s#are willcontinue to increase in t#e "ollowing $eriod w#ile t#e s#ares o" directsales and cas# X carr* outlets will decline %w#ic# is rat#er normalgiven t#at t#e cas# X carr* c#annel is not "ocused on buildingmaterials( T#e s#are o" s$eciali,ed distributors is also e4$ected toincrease

/ain distribution c#annels "or building materials include:

I> c#ains %eg: )RICO!TOR RTIR /)INT /Netc(

7arge building materials distributors %eg: R)!?; );Cetc(

!mall building materials distributors

!$eciali,ed distributors %eg: wall building X ot#er #eav*materials ceramic tiles insulation materials 6oat glass $owertools Fnis#ing materials or combinations o" t#e above(

irect sales Q !ales o+ces

Ot#er: Cas# and carr* outlet c#ains %eg: !7<RO! /TRO( Q'*$ermarkets

#I? cha)ns number o" international $la*ers are active on t#e local I> market:RTIR )RICO!TOR );/P O)I 'ORN)C' /R )RICO7<and 7RO> /R7IN %newl* arrived( Noticeable local $la*ers on t#emarket are /N and /)INT

ll $la*ers active on t#e I> market #ave entered t#roug# greenFeld$ro.ects

T#e evolution o" t#e I> segment "ollowed t#e general trends o" t#e

construction works sector re-crisis $eriod was marked b* stronggrowt# $la*ers3 sales increasing b* H0E to K0E *-o-* >ear 200broug#t about muc# smaller increases in turnover averaging at aroundG20E uring t#e 200D - 2010 $eriod t#e market re$orted a 20-H0Edecrease >ears 2011 and 2012 broug#t a slig#t recover* o" t#e marketes$eciall* $ro$elled b* renovation Q re"urbis#ment sector

/ost o" t#e demand comes "rom natural $ersons w#o make renovationsQ re"urbis#ments or small construction $ro.ects or inde$endents$ecialists %cra"tsmen(

Outlet e4$ansion $lans are $ut on #old b* ma.or $la*ers w#ic# seem tobe a$$re#ensive about new investments %at least some o" t#em( On





one #and t#e cost o" develo$ing a new outlet #as decreased w#ile ont#e ot#er #and banks #ave a stricter loan $olic* la*ers seem to "ocusmore on maintaining t#eir $osition rat#er t#an e4$anding t#eirnetwork T#ere are #owever e4ce$tions as /N o$ened 5 newstores in *ear 2011

Com$etition in t#e sector #as become Fercer as market growt# ma* notsustain newl* entered com$etitors w#ic# could gras$ market s#aresonl* "rom e4isting I> c#ains market situation ma* ultimatel* lead to$ossible e4its or takeovers

rie(Gnancials (orIY chainsshow therecentsccess o(

EE@3

DIY chains in Romania

Company!"no#$" in

Y%&'' (mi) EUR*!"no#$" in

Y%&'& (mi) EUR*

N!m+$" o, o!-)$-s

Y$a" %&'%

Y$a" %&&.

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 7

HORNBACH 84.7 71.3 5 2

OBI 42.1 39.2 7 2

MR. BRICOLAGE2

16.7 17.2 3 3

LERO MERLIN3

6.1 0.004 1 0

T*$es o" services $rovided b* I> market $la*ers include: #ome-deliver* colour-mi4ing cutting tool rental services "ree designconsultation etc lso most #ave set u$ $artners#i$s wit# Fnancialinstitutions in order "or clients to access small loans on t#e s$ot

ey issesa!ot IYchainsde"elopment

#I? cha)ns )n Ro+an)a

Co+3any "r)e* 3roBle

/N Out o" all ma.or $la*ers /N was t#e onl*com$an* to make $roFt in *ear 2011

4tensive e4$ansion o" outlet network in recent*ears %"rom 12 in 200 to H1 in 2012( currentl*covering most o" Romania

verage investment $er outlet W 10 million ;R H0E increase in turnover in *ear 2011 vs 2010 7arger turnover in 2011 t#an t#e ne4t t#ree $la*ers

1 ApproHimatel& 24K of the compan&)s turnover represented b& sales through >; network, while the rest is held

b& B7B distribution of construction materials3 6umber of outlets in the table includes onl& the largest >; units32 %urnover for BR>C5 0OP0R% !A (compan& operating the chain3 Compan& opened a >; store in summer of 78// (hence the low turnover so far


wwwmarketsco$ero 10H



ey issesa!ot IYchainsde"elopment

combined /N overcame RTIR in value o" sales in

*ear 2010 t#us becoming t#e market leader in t#esegment

RTIR

RTIR

ntered t#e Romanian market in 2002 verage investment $er outlet W 10 million ;R !ales increase in *ear 200B: 55E Ra$id outlet network e4$ansion in $re-crisis $eriod

currentl* covering most o" Romania3s ke* areas Currentl* #alted network e4$ansion and "ocuses on

tr*ing to maintain its market $osition %t#oug#network e4$ansion remains a $riorit*(

In 2012: introduced a number o" services in its oer%currentl* testing t#e market3s res$onse(: installingsanitar* $roducts mounting 6ooring solutions

windows e4terior doors $ainting .obs renovationsetc $$arentl* t#ere are s$eculations o" RTIR

e4iting t#e local market a"ter low results in t#e200D - 2011 $eriod

)RICO!TOR verage investment $er outlet W 10 million ;R lans to e4$and t#e outlet network were $ut on

#old due to un"avourable market conditions

/)INT

Concentration o" outlets in Trans*lvania region Roug# sales structure: A0E - wall building

materials cement rein"orcing bars H5E - Fnis#ingmaterials 15E - $lumbing 10E - "urniture

decorations and 6owers istribution c#annels: 55E - direct sales A5E - I>

network T#e com$an* targets cities above 50000

in#abitants "or outlet Q store o$ening Outlet network com$rises o" K logistic centres Q

ware#ouses %mostl* destined "or $ro"essionals Qcom$anies( 1A large I> outlets and 5 smalleroutlets

);/P

verage investment $er outlet W 10 million ;R%areas between 10000 and 15000 m2(

Recentl* Fnis#ed investments at a new outlet inClu.

'ORN)C'

ntered t#e market in mid 200B Recentl* com$leted a H0 million ;R investment

$ro.ect "or an outlet in Timisoara Outlet si,e is larger t#an t#at o" com$etitors W

20000 m2

$$ro4imatel* H000 @ H500 clientsQda*Qoutlet nvisaged amorti,ation "or a unit: H - 5 *ears t international level IN<8I!'R %one o" uro$e3s

largest I> o$erator( #as a 20E stake in'ORN)C'


wwwmarketsco$ero 10A



O)I art o" TN<7/NN <RO; also $resent on t#e

Romania market t#roug# 7;! stores %"ood retailer( verage investment $er outlet W A million ;R

/R)RICO7<

%)RICOPRT(

ntered t#e market in *ear 200B "ollowing a .oint-venture between M/R )RICO7< %8renc# I>c#ain( and /r Ce,ar Ro$otan w#ic# also ownsR)!?; %t#e largest )2) distributor o" buildingmaterials in Romania(

7RO>/R7IN

ntered t#e Romanian market in 2011 b* o$eninga I> store in )uc#arest

Own estimates o" turnover in *ear 2012: W H0million ;R





:eographicalspread o( IY chains

#I? cha)ns across Ro+an)a

6otes:4 smaller outlets and logistic centres < warehouses (mostl& for B7B sales in the Ambient network were not included in this map6umbers on the bullets represent the number of outlets the compan& opened in the cit&

T#e main D I> $la*ers in Romania #ave a total o" a$$ro4imatel* 120outlets

One can notice "rom t#e ma$ above t#at w#ile /)INT concentrateson Trans*lvania /N RTIR and )RICO!TOR develo$ed anation-wide network o" outlets

)uc#arest #olds t#e largest concentration o" I> stores wit# 1D units %allnine $la*ers are $resent even /)INT( Ot#er ma.or cities wit# I>c#ain concentration are itesti Timisoara Iasi )rasov Clu.-Na$ocarad Constanta and )acau T#ere are #owever some counties w#erenone o" t#e ma.or $la*ers #ave *et invested in a I> outlet: <or. !ala.Ialomita Teleorman Covasna


wwwmarketsco$ero 10K

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R)!?;

7argest building materials

distributor on t#e Romanian marketwit# 1 distribution $oints acrosst#e countr* and several unitso$ened in Re$ublic o" /oldova!erbia )ulgaria and ;kraine wit#interest in e4$anding to ot#erneig#bouring countries

7ogistic ca$abilities: K00 - B00trucks

roduct range: over H0000 items 0E o" sales - on t#e Romanian

market

A0A H5A5

);C

T#e com$an* was set u$ in 1DB0and $rivati,ed in *ear 2005

ctive in t#e sout#ern $art o"Romania

'as own $rocessing "acilities: s#eetmetal $rocessing %cuttinge4$ansion etc( welded #ousingsrein"orcing steel

Oers Mturnke* building materialssolutions

roduct range: over H0000 items

2B5 H1K

/NT&OR 1

<rou$ o" com$anies involved in t#edistribution $roduction and

mounting o" building materials6ooring solutions #eating andventilation s*stems lig#ting$roducts %20 com$anies(

/ain o+ce in )uc#arest and A localsubsidiaries based in Clu.-Na$ocaConstanta Craiova and )acau

/NT&OR !T R8)RICT%distributor o" constructionmaterials electrical eJui$ment and#eating and ventilation solutions(and /T7 &OR IN;!TR>%$roducer o" metal $roducts(generate a$$ro4imatel* E o" t#egrou$3s turnover

art o" t#e grou$ is also/NT&OR CON!TR;CT%contractor com$an*(

Over 120 $artners %su$$liers( "ort#e distribution division

Own brands: /T7&OR/NT&OR ?;TTRO CR!ON

HK2 H0H

1 %urnover for @06A%W5RI 0!% PR0#ABR>CA%03


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!T etc

TI<R/IR

Outlets in Oradea )uc#arest Timisoara Clu.-Na$oca radCraiova and Iasi

roduct range: over 20000 items Collaborates wit# over A0

international $roducers and 15 local$roducers

H1A 2BA

Ot#er large building materials distributors include: 7==I/R )INR TRIN< )RICO/T )RICO7;! I!TRI);TION CIT> <T CON!T/CO= <'R <X< RO/NI IN><O R!CO/ R;NI <R;!R!TI77 =< etc

ll a"orementioned com$anies are more "ocused on #eav* materials ands$eciali,ed in )2) sales but re$resent main su$$l* sources "or natural$ersons too

S3ec)al)Dedd)s(r)5'(ors lease see below some e4am$les o" s$eciali,ed distributors b* sectorS3ec)al)Ded 5')ld)n Bn)sh)n +a(er)als e')3+en(

d)s(r)5'(ors

Co+3anyT'rno&er )n-11 8+)l

EUR9Sec(or

I!TR77 A Ceramic tiles7T I!TRI);TION A2 Ceramic tiles!!) 2H Ceramic tilesO <RO; 1A Ceramic tiles

IRITP HABL &arm 6ooringsRO<! HHA &arm 6oorings

CRI!T7 )R 11B 8loat glassI!O7RO/ HB 8loat glass8R/NN K 8loat glass

ROC!T D2 ower toolsRONR< BB ower tools<NT TR KD ower tools/TTOO7! H ower tools

6ote: 9%urnover for &ear 78/83

!uc# t*$es o" s$eciali,ed distributors are also in some cases directim$orters and sell $roducts bot# to Fnal beneFciaries and to ot#erresellers &#ile some #ave a nation-wide network o" outlets suc# as7T I!TRI);TION IRITP or CRI!T7 )R ot#ers #ave onl* onema.or logistic centre and distribute t#emselves $roducts on a certainregional radius or work wit# a set o" re-sellers %eg: gent Traderoenerg( de$ending on t#e t*$e o" $roduct Com$anies also include int#eir $roduct range accessories or com$lementar* $roducts: "or ceramictiles @ mounting materials or tilling ad#esives "or warm 6oorings @


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6ooring ad#esives "or $ower tools @ drill bits #ole saws diamond corecutters .igsaw blades etc

It is estimated t#at s$eciali,ed distributors3 s#are at consumer level "orceramic tiles will grow to around H0E in *ear 201H %vs 10E in *ear2010(

O(her saleschannels

#)rec( sales Sales oces Re3resen(a()&e oces

!ome local $roducers resort to direct sales es$eciall* in t#e case o"large volume $ro.ects !ales o+ces are $articularl* $resent ondevelo$ing markets w#ere $roducts tend to be o" #ig#er value suc# asbituminous membranes

O(her d)s(r)5'()on channels "or various building and Fnis#ingmaterials %mostl*(: cash carry o'(le(s %/TRO !7<RO! etc( andhy3er+arke(s %CRR8O;R R7 ;C'N COR etc(


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Marke(#r)&ers

Re(a)l 3arks de&elo3ers $la* an im$ortant role in develo$ingdistribution networks es$eciall* in t#e case o" I> c#ains In recent*ears "ewer develo$ment $lans took s#a$e due to un"avourable marketconditions and reluctance "rom banks to Fnance suc# $ro.ects s suc#$ark retail develo$ers #ave started to "ocus on build-to-site $ro.ects

%built at t#e reJuest o" tenants( /oreover wit# "ewer o$$ortunities "orinvestments large $la*ers #ave also started to be more o$en to$ro.ects outside )uc#arest

&it# a continuall* diminis#ing s#are in t#e building materialsdistribution s+all d)s(r)5'(ors and outlets are generall* destined "orcra"tsmen T#is sales c#annel is e4$ected to "urt#er lose market s#arein "avour o" I> c#ains

Co+3e()()on will intensi"* bot# wit#in t#e same sales c#annel andamong various sales c#annels 8or e4am$le e4isting I> c#ains will#ave to "ace new market entrants %7RO> /R7IN( lso )2) buildingmaterials distributors could take u$ a $roactive a$$roac# to develo$ing

own retail networks i" )2) sales continue to decrease %eg R)!?;#as about 1 outlets t#at can be visited b* natural $ersons Qinde$endent cra"tsmen and an online store(

Econo+)c cr)s)s still aects t#e construction sector #aving a directim$act on building materials distribution >ear 2011 #owever seems to#ave marked t#e start o" recover* in t#e distribution sector

romania si minerit

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