ACC Market, Less Affected By Crisis

• Producers estimate a decline of up to 5% and are confident that ACC will take over some market share from other building materials

Alina Toma Vereha

The aerated autoclaved concrete (ACC) market will not decline by more than 5% this year, despite the significant recession affecting the construction industry because of the lack of public and private financing for new investments. Mihai Voiculescu, Executive Director of the association of ACC producers PROBCA told BURSA that sales should not decrease too much compared to the 2008 figures, considering that ACC producers had managed to sell 100% of their output in the previous years and that ACC was a widely popular construction material in Romania due to its very good price-quality ratio. In his opinion, ACC will also take over some market share from other construction materials.

According to Voiculescu, the main customers for ACC are the usual distributors and construction companies, but also an increasing number of individuals, who are building their own home. This change in the customer profile has prompted ACC producers to be more attentive to this segment of the market as the need to have a home seems to overcome the crisis and lending difficulties. Additionally, the volume of home repairs and even enlargement remains high in 2009 and thus ensures a good sales volume for certain building materials, the PROBCA representative believes.

• Sales depend on production cost optimization and State orders

"No ACC producer will go bankrupt in the near future. As for the distributors, I am not so sure, because they sell a wider range of construction materials, not just ACC. For the ACC market, the factors that will impact our transition through the crisis include the internal decisions of each producer, such as the use of new technologies, cost cuts, new products and new energy saving solutions, as well as the implementation of State investments in constructions," Mihai Voiculescu added.

According to PROBCA estimates, the Romanian market for ACC exceeded 2.5 million cubic meters in 2008, including imports for which no statistical data are available. In terms of value, the market reached approximately 200 million EUR, up by 20-30% from 2007, imports included. Domestic producers reported a sales growth of some 10-20% as no significant increase in production capacity was implemented.

• No collection problems for the time being

Voiculescu added that that the first quarter of 2009 was similar to the corresponding period of 2008 as far as sales were concerned. It is typical for the ACC market that the first quarter be irrelevant for the entire year as construction works are very slow in the cold season. Although last winter was longer and harder than a year before, ACC producers said they were pleased with the sales. They also said they had not had any particular problems collecting their receivables from distributors and builders. However, the liquidity shortage affecting contractors and resellers could be transferred to the producers in the following months.

The main players on the ACC market are Somaco, Macon - Deva, Prefab, Celco, Elpreco - Craiova, Xella Porenbeton Holding (Germany), Prefabricate Vest, Soceram and Eco - Block. Among the members of PROBCA are Macon - Deva (Simcor - Oradea), Celco - Constanta, Soceram, Eco - Block and Somaco (accession formalities pending). PROBCA members have an aggregate turnover in excess of 200 million EUR and more than 2,000 employees.