July 31 (SeeNews) - Austria's Wienerberger said on Tuesday it will acquire a production plant in Romania as part of a plan to strengthen its concrete paver business under the Semmelrock brand.
Wienerberger plans to acquire a plant in northwestern Romania near the border with Hungary, the company said in a press release, without elaborating.
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The group also said it is extending its geographic market coverage in Serbia and Hungary. Furthermore, Wienerberger is setting up a new production line for high-quality slabs in large formats at the Osca site in Hungary, and extending the production capacities of the Ogulin plant in Croatia.
Through these strategic investments, Wienerberger is increasing its production capacity in markets with fast growing demand and strengthening the position of the Semmelrock Group as a supplier of premium paver products.
"Our concrete paver business has taken a highly satisfactory development in recent months. Since the divestment of activities in Austria, we have concentrated fully on our profitable business in the growth markets of Eastern Europe. We are boosting our growth potential in the area through selective investments and strengthening our position as a leading supplier in the region," Wienerberger CEO Heimo Scheuch said.
The Semmelrock Group, a wholly owned subsidiary of Wienerberger AG, generated revenues of some 116 million euro ($136 million) in 2017. It operates an efficient production and distribution network in Eastern Europe.
In the future, Semmelrock will operate 14 production sites in seven countries – Slovakia, the Czech Republic, Hungary, Poland, Croatia, Romania and Bulgaria – as well as sales organizations in Slovenia, Serbia, Bosnia, Montenegro and Macedonia.
Earlier this month, Wienerberger said it has abandoned its plan to acquire Romanian brick producer Brikston Construction Solutions International from private equity fund ADM Capital in order to grow its Romanian business organically. The company also said it would step up the pace of its growth in Romania by expanding its current business and by investing in existing production sites.
ADM Capital agreed to sell Brikston in October 2017 for an undisclosed sum.
Wienerberger has been present in Romania since 1998 and is one of the major building materials producers in the country. The company operates six production sites for clay blocks and concrete pavers and employs a workforce of about 470 people. In 2017, Wienerberger Romania generated revenues of over 76 million euro ($88.8 million).
($= 0.8532 euro)