Croatia's market has been top of the news in the EU with the commission's decision to block the sale of Cemex's Croatian cement plants to Duna-Drava Cement of Hungary, jointly-owned by HeidelbergCement and Schwenk Zement. The commission was said to be concerned with the situation that after the transaction the largest cement producer in Croatia would also be the largest importer and would virtually dominate the southern Croatian market.
Currently competition in Croatia consists of the 1Mta integrated plant of LafargeHolcim at Koromacno and the Nexe Grupa dd Nasice's 1.1Mta cement plant. However, both are located at some distance from the country's southern coast and therefore, less able to deliver a competitive product in this area. Their combined output is just slightly below the 2.38Mta of total capacity installed at Cemex's three integrated facilities in Split at Tvornica Cementa, Sveti Juraj and Sveti Kajo. Taking into account 0.7Mt exports in the first eight months of 2016, and domestic output estimated at 1.24Mta, none of the plants is operating at full capacity. Calucem also operates an aluminate cement plant in Pula in the south, but does not produce OPC.
In addition to domestic production, Duna-Drava Cement imports into Croatia from its Kakanj works in Bosnia-Herzegovina as well as from its Hungarian operations.
In recent years Croatian cement demand has fallen. For the first eight months of 2015, it was at 0.78Mt and for the same period a year later it declined to 0.71Mt. Local forecasts for cement consumption in 2017 are significantly more positive at 1.3Mt.
While Croatian producers have been hoping for better cement demand they will participate in the European Bank for Reconstruction and Development and Enterprise Expansion Fund’s EUR10m funded project to develop a retail and entertainment cement in Pula. The complex is to be built on a brownfield site and former cement plant quarry.
The difficulty for Croatia has not been in getting hold of funds to invest, the EU awarded EUR10bn for infrastructure development for the 2014-20 period as a full member of the EU but in struggling to nominate enough eligible projects to spend the money on. Since 2013 Croatia has only spent 65 per cent of the EU funds its been allocated for infrastructure development.
Going forward, the construction of two luxury resorts in Rabac, which will add 764 accommodation units for more than 2700 guests, is expected to generate significant cement demand. Some HRK562m (EUR75.6m) is being invested by Valmar Roviera in Rabac as a luxury tourist destination.
