Lafarge Ciment, the Romanian subsidiary of the French group Lafarge, which recorded a 36% sales decline in the first half of the year, says the Romanian market is still behind the European Union market in terms of concrete sales, with sales of cement by the sack prevailing, due to the lack of massive investments in infrastructure.
Lafarge says its strategy for the Romanian market remains unchanged despite the crisis, and believes Romania still has long-term growth potential. However, the French extended the 90 million-euro investment programme dedicated to extending production capacities to 2011, instead of 2010, as initially planned.
"The deadlines for some of our investments have been adjusted in order to best suit the market's progression," said Phillipe Questiaux, CEO of Lafarge Ciment, a company with 370 million euros in turnover last year and a 44% net profit margin, one of the most profitable companies in the Romanian economy.
Lafarge's cement business contracted by 36% in the first half of the year due to the decline in consumption and the depreciation of the RON against the euro. "The sales decline, which was felt as early as in the fourth quarter of 2008, deepened in the first two quarters of 2009," explains Questiaux. Since the beginning of the year, the company resorted to technical unemployment for some of its production facilities in order to cut costs, but the biggest cost cuts were made by reducing the number of shifts and by making equipment more time-efficient. "Internal measures are mainly aimed at cash management and everything that it entails: stocks, payments, and cash coming in," says the Lafarge CEO.
Concrete sales of the French group, via its Lafarge Agregate Betoane division, fell by 40% in the first half of the year, due to a significant decline in real estate investments, and to the very few infrastructure projects
