Heracles to permanently close Halkis cement works, Greece

Heracles Cement, the largest cement producer in Greece, is to permanently close the doors on its Halkis cement plant as the company restructures its business to adjust to the struggling domestic construction and cement sectors.

The 2.6Mta Halkis plant has been idle since July 2011 and management have now made the decision to officially cease operations, as of 26 March 2013. The closure will result in job losses for 236 members of staff.

The company stated that: “This decision comes after a series of efforts with investments in new technology of the cement production and actions for new activities, in order to make this unit more competitive. However, despite the efforts, the [Halkis] factory suffered a severe reduction in sales due to the decline of the construction activity in Attica, the main market of the factory, by 80 per cent from 2008 until now.”

The plant’s work will be transferred to Heracles' other operations in Volos and Milakio in Euboea. The Attica region will now be served by a distribution centre in Drapetsona.

Heracles General Cement has a domestic market share of some 50 per cent and is 89 per cent owned by Lafarge. The Volos works in Thessaly has a cement capacity of 4.9Mta, making it one of the largest cement works in Europe. The plant’s marine terminal can accommodate ships up to 45,000dwt and serves both domestic and export markets. The Milakio works, on the island of Euboea, has a capacity of 1.8Mta and normally sells all its production into export markets, being able to handle load ships of up to 80,000dwt. The potential exists to double its capacity, but this is unlikely in the foreseeable future.

The Greek cement market has been in freefall for the past six years and is estimated to have dropped by some 35 per cent in 2012 to less than a quarter of its 2006 peak. While, the rate of decline did slow in the fourth quarter of 2012, the outlook remains fairly bleak. Forecasts suggests that demand is likely to be down by a further 11.1 per cent YoY in 2013 from the expected 2.7Mt in 2012. Demand should, however, stabilise from 2014, though no recovery to peak levels should be expected.