Constructions Sector in Romania Q1 2012 - A FRD Center Newsletter

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According to industry estimations of April 2012, construction activity in Romania will continue to increase during the next three months, with a growth of production volume of +30% and the stock of …

According to industry estimations of April 2012, construction activity in Romania will continue to increase during the next three months, with a growth of production volume of +30% and the stock of contracts and orders with +24%.

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  • 1. A FRD Center Market Entry Services newsletter = your gateway to CE and SE European emerging markets = CONSTRUCTIONS MARKET IN ROMANIA – Q1 2012According to industry estimations of April 2012, construction activity in Romania willcontinue to increase during the next three months, with a growth of productionvolume of +30% and the stock of contracts and orders with +24%.1. General statistics • In the first two months of 2012 compared to the similar period of 2011, the volume of the construction works in Romania increased by 5.3% (as unadjusted series). • By structural elements, the new construction works registered a growth of 33.4% in the first two months of 2012 compared to the same period of 2011. • By construction objects, a growth of 28.3% was registered for the engineering works in the first two months of 2012 compared to the same period of the previous year.
  • 2. A FRD Center Market Entry Services newsletter = your gateway to CE and SE European emerging markets = • In spite of severe winter weather, 1,999 construction permits for residential buildings were released in February 2012, up by 15.4% compared to January 2012. • The regional distribution shows an increase in the number of construction permits released for residential buildings, in February 2012 compared to the previous month, in almost all the development regions. The most important increases were recorded in the following regions: the North West (+85 permits), the North East (+70 permits) and the West (+34 permits). • 44,456 dwellings were completed in Romania in 2011.2. Residential • The Romanian Government approved in April 2012 the programme “Construction of rental housing, achieved by attracting private capital”. Through this programme, the National Housing Agency intends to develop residential compounds with private funding. • The Spanish developer Volumetric, which finalised in 2011 the construction of a block of flats in Brasov using exclusively own funds of 25 million EUR, intends to start in 2012 the construction of a residential complex in Bucharest on a land of 5,300 sqm. • The owners of the Doldora Commercial Center (three Romanian individuals) will continue the investment in the Rahova area of Bucharest through the construction of a residential complex with 400 apartments, on a surface of 8,000 sqm. • Fribourg Development will invest 26 million EUR in turning the former Libertatea furniture factory in Cluj Napoca into a technology and residential park under the name Liberty Center Technological Park. The project will have 2,000 sqm of residential spaces, 2,000 sqm of offices and 17,000 sqm of green areas.3. Industrial & commercial3.1 Industrial projects • In January 2012, Johnson Controls launched a production facility of automotive chairs in Craiova, following investments estimated at some ten million EUR. • The German Group Rochling invests over nine million EUR in the construction of a plant of plastic automotive components in Pitesti. • Honeywell intends to build in Ploiesti a brake pad plant. • The producer of aluminium profiles Alumil Rom Industry invests at present some six million EUR in Filipesti de Padure in order to construct a production plant and to acquire new equipment.
  • 3. A FRD Center Market Entry Services newsletter = your gateway to CE and SE European emerging markets = • The producer of construction materials Soceram will launch by the end of 2012 its new AAC plant in the Neamt county, following investments of some 20 million EUR. • The producer of construction materials Adeplast intends to construct a plant of mortars, polystyrene and paints in Roman, Neamt county. The investment is estimated to exceed ten million EUR. Also, in August 2011, Adeplast launched a polystyrene plant in Ploiesti, following investments of four million EUR.3.2 Retail projects • Auchan intends to expand its network of units in Romania and to reach 15 hypermarkets by 2015. • Coresi Shopping Centre in Brasov, the biggest project of the Auchan Group in Romania, will be completed at the end of 2013. The project will include an Auchan hypermarket with the selling surface of 13,000 sqm and a commercial gallery with a renting surface of 25,000 sqm. • In March 2012, Carrefour and the meat producer Angst opened in Bucharest their third proximity store operated based on their franchise agreement. The store - Carrefour Express Angst Mihalache – has a selling surface of 140 sqm. • Carrefour launched in November 2011 a hypermarket with the surface of 7,000 sqm in the Botosani Shopping Center. Also, in October 2011, Carrefour opened a hypermarket with the surface of 8,400 sqm, in the Colosseum Center in Bucharest. • In January 2012, Mega Image opened a new Shop&Go supermarket in Bucharest. This proximity store has a selling area of some 110 sqm. • The Canadian real estate investment company Benevo Capital acquired the 77,000 sqm site of the former Vulcan plant in Bucharest, the value of the transaction amounting to 23 million EUR. The Canadian company plans to build a 35,000 sqm retail park on this plot, which will include a DIY store, a 10,000 sqm hypermarket and a commercial gallery. • The DIY retailer bauMax Romania opened in March 2012 its second store in Cluj Napoca, following an investment of 20 million EUR. This is the retailer’s 15th store in Romania and has a built area of 15,000 sqm. • The Romanian DIY retailer Dedeman opened in March 2011 its second store in Constanta with investments of 15.5 million EUR. The new store is located on a 3.5 hectars plot.
  • 4. A FRD Center Market Entry Services newsletter = your gateway to CE and SE European emerging markets =3.3 Shopping centers projects • The real estate developer Raiffeisen Evolution will invest some 150 million EUR in developing the Promenada Mall project located in the Floreasca area of Bucharest. The mall opening is set for the end of 2013. • Palas Iasi is expected to be launched in May 2012 in the city of Iasi (NE Romania). The project of 260 million EUR is built in partnership with the Iasi City Hall. On a surface of some 320,000 sqm, the project includes a shopping center on around 54,000 sqm, office buildings, a housing area and two hotels. • The Adora Mall shopping center in Craiova, developed by the Portuguese real estate developer Sonae Sierra, is under the first phase of the construction works. • The construction works at the MegaMall shopping center in Bucharest are expected to start in the second half of 2012. The mall will be built on the site of the former Electroaparataj plant. • The Irish investment group Caelum Development intends to complete, in the last quarter of 2013, the construction of the ParkLake Plaza Mall in Bucharest, with an investment of 250 million EUR. ParkLake Plaza will have a leasable surface of 67,000 sqm.
  • 5. A FRD Center Market Entry Services newsletter = your gateway to CE and SE European emerging markets =3.4 Office building projects • The first office building within AFI Business Park Cotroceni in Bucharest is expected to be completed in August 2012. The office spaces have been already 50% pre-leased with demands coming mostly from IT companies. The total investment in the new building is estimated at 20 million EUR. • The construction of the tallest office building in Bucharest, Sky Tower Building, started in September 2011. Sky Tower will be 137 meters high and will have 36 floors. • Felinvest restarted the construction of its real estate project in Cluj Napoca (Central Romania). In the next phase of the project, 14,000 sqm of office buildings and 1,500 sqm of commercial spaces will be constructed, with investments of seven million EUR. • The City Business Center in Timisoara (West Romania), which has three existing office buildings totaling 25,000 sqm, will continue to develop by adding two new buildings. • The Romanian company Independenta SA will develop a business park in Craiova (SW Romania), worth 17 million EUR. The Business Park Craiova will be built on nine hectares and the completion time is estimated at the half of 2013. The park will include office buildings and production halls.3.5 Hotel projects • The Spanish developer Hercesa finalised the works on the Hotel Cismigiu historic building in Bucharest with investments of 15 million EUR. The 100-year old building will become a mix project, with a four-star hotel, retail spaces and offices. • NauticLife took over the private harbour Marina Limanu in Mangalia, on the Black Sea coast, and plans to add an adjoining hotel by August 2012. • In March 2012, JW Marriott Bucharest finalised the renovation of the Constanta Ballroom and small conference rooms with investments of 0.7 million EUR. • The Romanian company Solarex received a banking funding worth six million EUR to finish the works started in the summer of 2011 at a resort in Noroieni, Satu Mare county. The resort includes hotels, swimming pools, saunas, treatment rooms, restaurants, shopping areas, playgrounds for children, stage shows and beauty spots.3.6 Warehouse and logistic projects • The Romanian dairy producer Covalact opened a new logistics center in Sfantu Gheorghe, following an investment of 1.1 million EUR. The new warehouse has a capacity of over 700 tonnes.
  • 6. A FRD Center Market Entry Services newsletter = your gateway to CE and SE European emerging markets = • Star Foods started the construction of a new warehouse, located near Bucharest. The facility will be finalised by mid 2012, following investments of 2.5 million EUR. • Various associations of producers of fruits and vegetables in Romania (Agroleg Grup Galati, Tomate Com Dracea, Agro Eco Sabar etc) are constructing at present refrigeration warehouses, mainly using UE co-funding. • In 2011, the general contractor Baumeister constructed a warehouse for Lidl, located in the Mures county. The warehouse has the surface of 44,000 sqm.4. Infrastructure4.1 Roads, railways, metro projects • In April 2011, the Romanian National Company for Motorways and National Roads launched tenders in order to select the general contractors for the design and construction of the sections 2, 3 and 4 of the Lugoj - Deva motorway and the section 2 on the Timisoara - Lugoj motorway. The total value of these projects is estimated at 3.75 billion RON. The projects are financed by EU funds and state budget. • The Spanish company Contrat Ingenieria y Obras will build the Mihailesti bypass, of 3.18 km. The works will be finalised in 2013. The project’s value is of some 33.4 million RON. • The works for the construction of the Brasov bypass of 13.6 km started in March 2012 and will be finalised in the spring of 2013. The first part of 7.29 km will be constructed by the Austrian company Alpine Bau and will cost 30 million EUR. • The highway that will link Bucharest to Ploiesti is expected to be completed in June 2012. The 62-km highway is part of the 173-km road linking Bucharest to Brasov. The works on the Bucharest - Ploiesti segment will cost 450 million EUR. • Romania received the green light from the European Commission for two railway projects worth 944 million EUR, out of which 771 million EUR will come from the Cohesion Fund. The funding will be available for the Curtici – Arad and Simeria - Coslariu railway connections. • The Ministry of Transport plans in Bucharest a new tunnel linking the Bucharest’s Gara de Nord, Obor and Gara de Sud stations. • The construction works of the underground line between Bucharest and the Henri Coanda International Airport are expected to begin in the first quarter of 2013.4.2 Water & sewage projects • The Covasna county received an EBRD loan of 7.6 million EUR which will allow the water utility company Gospodarie Comunala SA to modernise the water supply
  • 7. A FRD Center Market Entry Services newsletter = your gateway to CE and SE European emerging markets = and sewage network in Sfantu Gheorghe, Targu Secuiesc, Covasna and Intorsura Buzaului cities.• Aquatim, the water utility company in the Timis county, received a loan of 15.5 million EUR from the EBRD, which will be used to co-finance the company’s investment program of 118.9 million EUR for upgrading water and wastewater services. The EBRD loan will help the company extend and rehabilitate the water supply and waste water treatment networks in seven towns and two communes in the Timis county.• A project of some 120 million EUR for sewage and waste water system in the Maramures county will be implemented during 2012 – 2015. The beneficiaries of this project will be over 270,000 inhabitants of nine cities in the Maramures county.
  • 8. A FRD Center Market Entry Services newsletter = your gateway to CE and SE European emerging markets =5. Public & social5.1 Medical centres projects • In March 2012, the Ministry of Health announced the intention to construct a Emergency Regional Hospital in Miroslava, Iasi county. The hospital will be constructed with public and private partnership. • The private medical provider MedLife announced an investment programme of 52.1 million EUR for the period 2011 - 2015, that will be sustained through credits and own funds. • In December 2011, MedLife opened an Orthopaedic Hospital in Bucharest with the total capacity of 45 beds, following investments of 8.5 million EUR. The unit has the surface of 2,000 sqm. • At the beginning of 2012, the private medical provider Medicover has launched its first hospital in Romania, following investments of some 20 million EUR. The hospital is located in Bucharest, has 75 beds and three surgery rooms. • In September 2011, the private medical provider Regina Maria opened the Policlinic Floreasca, located near its Euroclinic Hospital in Bucharest, following investments of two million EUR. The unit has the surface of 2,000 sqm.5.2 Education & sport facilities projects • In March 2012, the Romanian Government approved the technical - economic indicators for building 180 kindergartens with normal schedule, with three and four group rooms, in rural and urban areas, included in the Project “Early education reform in Romania”. The construction is expected to begin in September 2012. • In October 2011, the Ministry of Education allocated some nine million EUR in order to pay the constructors that built or rehabilitated public schools. • The public school in Albesti, Constanta county, is expected to be finalised by the end of 2012. Also, the public authorities in Albesti intend to construct a new kindergarten with three group rooms and a new sport base. • In May 2011, the first didactic swimming pool built within the “Swimming Pools” Programme carried out by the National Investment Company, was inaugurated in Campina, Prahova county, with an investment of over one million EUR, using governmental funds. • The authorities in Baile Herculane plan to build the Therme Herculi water park with an investment of seven million EUR. The water park will include indoor and outdoor swimming pools, water slide and relaxing spaces.
  • 9. A FRD Center Market Entry Services newsletter = your gateway to CE and SE European emerging markets =According to the National Investment Company: • During 2002 - 2011, under the Sports Hall Building programme a total of 988 investment objectives have been completed. Currently, a total of 60 gyms are being built. • Under the Consolidation and rehabilitation programme of sports facilities built before 2000, from 2006 to 2011 40 investment objectives have been completed. Currently, a number of 5 buildings are being refurbished. • 37 sport halls were finalised in 2011, within the “Sports Halls” Programme • three sport halls constructed before 2000 were rehabilitated in 2011, within the “Rehabilitation of the existing sports halls, built before 2000” Programme • one swimming pool was finalised in 2011, within the “Swimming Pools” Programme • one artificial skating-rink was finalised in 2011, within the “Artificial skating-rinks” Programme • It is envisaged that these programmes will continue during 2012-2015.6. Imports of construction materials • The imports of cement (Portland, aluminous, slag, super-sulphate and similar hydraulic cements) in Romania increased by 0.5% in 2011 compared to 2010.
  • 10. A FRD Center Market Entry Services newsletter = your gateway to CE and SE European emerging markets = • The imports of non-refractory mortars and concretes in Romania increased by 11.6% in 2011 compared to the previous year. • The Romanian imports of ceramic roofing tiles, chimney pots, cowls, liners, ornaments and other ceramic goods increased by 26.5% in 2011 compared to the previous year. • The Romanian imports of glazed ceramic flags and paving, hearth or wall tiles, mosaic cubes increased by 3.3% in 2011 compared to the previous year. Imports of construction materials in Romania 160 120 80 40 0 Cement Non-refractory mortars Ceramic roofing tiles, Glazed ceramic flags & concretes chimney pots, cowls, and paving, hearth or liners, ornaments & wall tiles, mosaic cubes others 2010 2011 Source: Romanian Center for Trade and InvestmentGiven the growing trend of the activity in the constructions sector in Romania, it isenvisaged that the imports, as well as local production, of constructions materials willcontinue to increase in 2012 – 2013.
  • 11. A FRD Center Market Entry Services newsletter = your gateway to CE and SE European emerging markets =This free newsletter is produced by FRD Center Market Entry Services – www.frdcenter.ro - aprivately owned market entry boutique-type consulting firm based in Romania.FRD Center offers tailor-made market research, B2B matchmaking, business partner search &selection services and market access consulting services to foreign companies interested to enter theemerging markets in CE and SE Europe market as exporters, consultants, investors or joint-ventures,to relocate their operations, or to source in Romania, Poland, Slovakia, Turkey, Ukraine, Bulgaria etc.Since 2000, FRD Center has been the trade consultant for the Irish Government Agency, EnterpriseIreland. Other clients include agencies, companies and chambers of commerce from: Argentina,Austria, Canada, Czech Republic, Denmark, Germany, Greece, Ireland, Israel, Jordan, Lithuania,Norway, Poland, UK, USA, South Africa, Spain, Switzerland etc.Our services include: - market research, investment opportunities assessment, sector studies, market briefs- business partner search & selection: identification and qualification of B2B distributors, importers,suppliers etc.- product presentation and assessment of interest from clients / partners- market opportunity assessment- M&A advisory, business support and research- identification of market opportunities: exports, sourcing, B2B sales etc.- trade missions, business itineraries, inward buyer missionsFRD Center is the Global Intelligence Alliance Research Partner for Romania, a member of theGlobal Consulting Network-GCN, of the Expansion Alliance Group, of International SubsidiaryDevelopment Inc. and of EMERGY International network.Disclaimer:Whilst every care is taken in compiling this report, no responsibility is taken for errors or omissions. FRD Centerguarantees that this information, collected and generated, has been operated in a professional manner and best effortswere applied with a view to offering accurate and complete results. However, FRD Center will not be held liable for anydamage or loss resulting from the use of the information contained herein. FRD Center Market Entry Services www.market-entry.ro Contact: Jackie Bojor, Director europa@frdcenter.ro