Lafarge said it would open a EUR50m ($63m) upgraded cement plant in the Serbian town of Beocin.

"Lafarge’s expansion in central Europe will take another step forward tomorrow with the inauguration of a fully modernised cement plant with a capacity of 1.5Mt," the company said. The plant represents the largest foreign investment in Serbia in the last five years, the company claimed.

"The Beocin plant now has everything it needs to serve the dynamic construction market in Serbia and Montenegro," Lafarge’s chief executive officer Bernard Kasriel said in the statement.

Lafarge bought a 70% share in what had been Serbia’s largest cement plant, Beocinska Fabrika Cementa, for roughly 75 million euro in April 2002.

The newly upgraded plant is jointly owned by the French company and the Austrian Asamer and Witersdorfer, which holds a 14% stake.

Meanwhile, the French major added that it may invest in a new plasterboard plant in Romania to meet growing demand.   "The market is large enough to justify the construction of new production facilities, in addition to the one we already have," Lafarge Arcom Gips general manager Sebastian Popescu said.  Romania’s plasterboard materials market has a great potential and could reach 30 million square metres in the medium-term period, he added.

New investment in Romanian plasterboard production could total EUR40m ($50m) - roughly equal to current sales in the country, local media reported.

Lafarge Arcom Gips is a joint venture between Lafarge and Romanian construction company Arcom. It operates Romania’s sole plasterboard producing plant, near the capital city of Bucharest.

Rigips Romania, a member of British Plaster Board Industries (BPB), said in July it would invest 30 million euro in the construction of a plant in Turda, in northwestern Romania, according to earlier media reports.

Lafarge group ( www.lafarge.com) began operating in Romania in 1997. It owns cement maker Lafarge Romcim, stone quarry Lafarge Agregate Betoane and plasterboard producer Lafarge Arcom Gips. The group employs more than 1,800 people in Romania.