Market of expanded polystyrene stagnates

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Delay in several real estate projects, the deficit of workforce in constructions and the lack of financing for continuation of constructions will lead to stagnation in the local market of expanded polystyrene, which will advance only 2-3% in 2008, compared with estimates at the beginning of the year, putting the rise at over 50%, players in the field said.
 
„From our estimates, the market will stagnate this year, the rise for 2008 will be very low, of only 2 or 3%, the main reasons for that is the delay in several real estate projects, but also the lack of financing for finalizing them or a workforce deficit, skilled people are needed in our field”, said for Business Standard Radu Ionescu, sales manager of Europlast Industries.
He remarked that the stagnation in the market has as a consequence a cut in imports of raw materials for the production of polystyrene, which fell 20-30% in the first half this year compared with the first half of 2007.
 
According to Ionescu, the sales of the company rose 25% in the first six months this year, below the estimates of 60% made at the beginning of the year, the advance was favoured by the products directly marketed by some developers.
„The sale of big producers was not so much affected, because they had stocks of raw materials,” Ionescu also said.
In his opinion, an invigoration in the relevant local market could take place in 2009, with the real start of the national programme of rehabilitation of old buildings.
 
„Imports of raw materials fell 23% in the first six months this year, this was possible also because many traders made reserves, following the removal of customs restrictions for imports from China”, said Marian Serban, general manager of Swisspor Romania.
The company distributes products for thermal, phono and hydro-insulation and holds a factory of expanded polystyrene in Ploiesti, southern Romania.
 
According to Jean Cosac, the majority shareholder of Euro MGA company, competition in the local market is affected by small producers, who sold products of low quality for prices below those in the market. „This year, we have preferred to produce at a third of the maximum capacity, although demand was four times higher, because of small mark-ups which we have to take in order to counter the dumping policy of small producers, offering products of low quality for low prices,” Cosac said.
 
The thermal insulation of old buildings and the European requirements in the field have drawn big interest in investment in the production and distribution of expanded polystyrene, which has been one of the most dynamic segments of the industry of building materials.
Currently, Romania is one of the European countries with the biggest number of dwellings with low thermal insulation. 75% of the dwellings are up to 55 years old, and their installations are worn out, they require an amount of energy that is the double of that in the EU. Experts believe some 60% of the apartment buildings need thermo-technical rehabilitation and upgrading.
 
The local market of polystyrene has grown a lot in the past years, currently there are 18-20 makers, about six times more than the number of some years ago.
Among the strongest players in the local market of expanded polystyrene, there are Austrotherm, Swisspor, Isopor, Arcon, Euro MGA and Europlast Industries.
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