Wirth, Holcim: The recovery will be W-shaped

Markus Wirth, CEO of Holcim Romania, a 372 million-euro business in 2008, says he expects a slow recovery of the economy due to the low volume of investments made from the state budget, and that the constructions market will have a W-shaped recovery.

Under the circumstances, the company budgeted a similar volume for next year as in 2009, which will amount to around 300 million euros, down 20%, according to beginning-of-the-year forecasts.

"At the beginning of the crisis period we thought we would see a U-shaped market progression, then an L-shaped progression became much more realistic, with the duration of the crisis being unforeseeable. Now, we have signals from the market pointing to a W-shaped progression," Wirth says.

Holcim's cement sales fell by 15% in the first six months of the year on the Romanian market, according to the group's half-year report, considering the around 30% decline of the overall cement market.

The company, which produces cement, aggregates and concrete, posted a 372 million-euro turnover last year, up 25% against the previous year, and a 111.14 million-RON (30.2 million-euro) net profit, down by around 3% against 2007.

Cement producers relied at the beginning of the year on the 10 billion-euro investments announced by the Boc government for infrastructure projects, but considering that investments made until September amounted to just 5 billion euros, sales to infrastructure projects were cut. "If the state had invested the whole 10 billion euros, I think we would not have seen financial losses this year, only a decline in terms of volume. During this time of crisis when there was a reduction in private sector investments in Romania, one should take this opportunity to develop the infrastructure we urgently need. We need a modern infrastructure system both now, to develop industrial production sector, and after the recession, to promote Romania as a travel destination, " Wirth says.

Romanian cement production fell by 28.8% in the first half of the year, to 3.5 million tonnes, delivered exclusively to the Romanian market.