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HeidelbergCement sales up 40%, Lafarge sees 84% record surge

HeidelbergCement sales up 40%, Lafarge sees 84% record surge
09.08.2007, 20:09 4

German group HeidelbergCement saw a 40% increase in cement sales in the first half of the year against the same period last year, primarily because of the favourable weather conditions experienced at the beginning of the year and the spectacular expansion of the constructions industry.
However, the growth rate was half the level registered by the French group Lafarge, which saw an 84% rise in cement sales in the first six months of the year. Lafarge's growth was the highest registered by the group as a whole. By focusing on the domestic market and reducing exports, Lafarge was able to cover the increased demand witnessed during this period.
"Because of our limited production capacity, we have not been able to keep an eye on market demand, which was, at the time, bigger. As a result, our competitors took the portion of the market we were unable to cover," Mihai Rohan, general manager of Carpatcement Holding, the local division of the HeidelbergCement group, told ZF. The German group intends to double the production capacity of the three plants it holds, in Bicaz, Fieni and Deva, by 2010, through investments worth around 100 million euros. High temperatures at the beginning of the year extensively exceeded market players' initial forecasts, however, it is difficult to say whether the growth rate seen in the first half of the year will also continue into the second half.
"The favourable weather conditions in the first quarter of the year, which registered temperatures of 10 to 15 degrees Celsius, the spectacular rise in constructions, as well as real estate projects in both Bucharest and throughout the country, as well as road infrastructure works aided an increase in our sales over this period," said Rohan.
HeidelbergCement posted turnover worth 164 million euros on the domestic market in the first half of the year, up by around 40-50% for its three divisions: cement, aggregates and concrete. "If the upward trend seen in the first half of the year continues, we estimate the turnover for all three divisions will increase by around 20% in 2007," specified Rohan.
The German group has announced investments worth 187.7 million RON (around 56 million euros) for this year, of which over 50% have already been completed. The most significant investments, which were finalised in the first half of the year, were used for equipping the plants in Deva and Bicaz with coal mills, in order for coal to be used as a primary fuel source for burning clinker.
HeidelbergCement posted domestic turnover worth approximately 278 million euros last year, up 39% on the previous year. The sum includes results posted by all three divisions of the group (cement, concrete and aggregates). The cement division of the group witnessed an approximately 40% increase reaching 221 million euros.
German-based HeidelbergCement shares the local cement market with the Swiss-based Holcim and the French-based Lafarge, each accounting for around a third of the local market, which was estimated to stand at around 500 million euros last year.
HeidelbergCement has been present on the Romanian market since 1998, when it purchased the majority stake in Moldocim Bicaz. In 2000, Heidelberg became a majority shareholder in the Deva-based Casial, and since 2003 has held the majority stake in the cement producer Romcif Fieni. In 2005, all domestic divisions of the German group were brought together to form Carpatcement Holding SA.
HeidelbergCement's cement and clinker sales registered an increase of 12.5% in the first half of the year, to 41.1 million tonnes, with the turnover also up by 12.5%, to 4.8 billion euros.

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