Bosnia: Tvornica Cementa Kakanj expects flat output in 2015

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Updated Wed, 11 Mar 2015 10:43:14 GMT

Bosnia's Tvornica Cementa Kakanj (TCK) has forecast that its cement output will be flat in 2015 after producing 420,000t in 2014, according to company director Branimir Muidza. TCK is majority-owned by Dutch-based CEEM Investment, a unit of Germany's HeidelbergCement.

"Our cement production fell by around 10% in 2014, which was probably the most difficult year since the war for the Bosnian economy and its citizens. The country went through political turmoil in February 2014, followed by record floods in May 2014 and August 2014 and elections in October 2014," said Muidza.

Extraordinarily high rainfall affected Bosnia and Herzegovina between 14 May 2014 and 19 May 2014, the largest precipitation in 120 years. The European Union's delegation in Bosnia said in July 2014 that the cost of the total economic impact from the subsequent devastating floods that hit large parts of Bosnia was Euro2bn.

TCK's total revenues are projected to stagnate in 2015, given that in the first quarter of the year there will be no new major infrastructure works. Those that are expected to resume will mainly do so in the second half of the year. TCK's business outlook for 2015 is based on the low purchasing power of the population, a lack of foreign investments, political instability, a decline in personal consumption of building materials, job insecurity and the expected dynamics and intensity of planned public infrastructure works. Bosnia is expected to consume 1.1 - 1.2Mt in 2015, mostly unchanged from 2014.

Muidza is much more optimistic for 2016 onwards. Large government investments in public infrastructure and energy facilities, such as the pan-European Corridor, new units at thermal power plants Tuzla and Ugljevik and the new hydro power plant Vranduk, could help boost demand for construction materials in the country.

TCK plans to build a new Euro10.2m cement silo by 2018. Construction is expected to start later in 2015. There are also plans to install equipment that will enable the rail transport of bulk cement. During 2015, TCK will also finish a Euro1.53m project for the automation of its cement milling and packing operations.