Germans at Xella complete 32m-euro AAC plant and put off expansion

Xella Ro, the Romanian subsidiary of German group Xella, with 1.4 billion euros in annual turnover, has recently completed an AAC (Autoclaved Aerated Concrete) plant in Paulesti, Prahova county, following a 32 million-euro investment, and says it has no further expansion plans on the Romanian market, either through acquisitions or through greenfield projects, although last year the company had plans to build another plant near Cluj.
Xella completed the plant in 12 months' time, with this being the German's group latest opening in the world. The original investment was put at 20-24 million euros, but ended up amounting to 32 million euros due to conditions on the Romanian market.
"We met our initial deadlines for completing the plant, despite the financial crisis. Technological tests are currently carried out at the plant, with serial production to start in a month's time. The investment was more significant than we had anticipated initially due conditions on the Romanian market - seismic regulations and soil structure, as well as to investments in the plant's infrastructure," said Marius Dragne, marketing manager of Xella for South-Eastern Europe (Hungary, Bulgaria and Romania).
The new plant has an installed capacity of 300,000 cubic metres and will create 70 jobs in a first stage, as it is completely automated.
"This is Xella's latest AAC plant in the world, and will lead to the creation of 70 jobs in a first stage, the commercial team included. Not a lot of jobs are available because the plant is automated, but we will boost the sales force, the marketing team and the product management department," Dragne says.
Xella currently has an around 5-6% market share, accounted for by imports from the Hungarian and Bulgarian plants, and this year delivered around 220,000 cubic metres of AAC onto the market, 30-35% less than last year.
"Even if we become producers, we will not suspend imports from Bulgaria and Hungary, but logistics costs will be significantly cut. For instance, the Constanta area can be catered to by the plant in Dobric, Bulgaria." Xella Ro will see a 30-35% turnover decline this year, to around 9 million euros.