Unicon Beton cements stake in bid for regional market
Unicon is basing its business plan on growth in harbor development, bridge and motorway construction, said Torben sterbech, managing director of Unicon. "We also expect a lot of commercial and office development in the Gdansk-Gdynia area, and then there's housing," he added.
Within the next two years, sterbech projected demand in the Tri-city area for concrete to increase "easily" 50% from its current 200,000 cubic meters.
"That's the size at present," sterbech said. "We expect a kind of boom in the area."
The zl. 10 million ($2.9 million) greenfield Gdansk plant, located one kilometer south of the city center, is a computerized plant with a capacity of 80,000 cubic meters of ready-mix concrete, about the amount needed for three, 30-floor buildings such as Epstein Development's Warsaw Financial Center, sterbech said.
The Tri-city market is currently dominated by four larger local producers, Cempil, Hydrobudowa, Hossa and Mega, comprising 50% of current production, with at least five other smaller producers accounting for remaining production, sterbech said.
Unicon's strategy calls for marketing higher quality concrete than exists on the current market and better service through its computerization, he said.
But at the current retail price of about zl. 150 a cubic meter, a return on the plant investment won't be anytime soon, sterbech conceded. Concrete is a mixture of gravel, sand, cement and additives. Costs for raw materials average slightly above zl. 100 depending on the distance of the plant from material sources.
In Gdansk, raw material costs, and thus retail prices, are higher than the average because most of the cement, which accounts for 50% of costs, comes from southern Poland, he said.
"It's quite normal that you have to have your margins squeezed when you enter a market," sterbech said.
The Gdansk market is, however, a safer haven than Warsaw, where concrete producers are selling about 20% below cost just to get the contracts.
"In Warsaw the situation is a little bit crazy," he said, adding that in Gdansk, "I'm not going to say it's easier, but the competition is less."
Unicon, also with two, Warsaw-based ready-mix plants, plans to open similar plants in three other cities this year. The Gdansk plant employs 20 staff, 85% working in production and distribution, and the workforce could increase to 30 by year's end, sterbech said.
Unicon has purchased land for another site, which likely will open next year, said sterbech, who did not want to specify the location other than to say: "Now we're in Gdansk, why not Gdynia?"
The Gdansk plant is financed by the company's Denmark-based parent Unicon, which is part of the FLS Group, whose core business is design and production of cement worldwide.
Within the next two years, sterbech projected demand in the Tri-city area for concrete to increase "easily" 50% from its current 200,000 cubic meters.
"That's the size at present," sterbech said. "We expect a kind of boom in the area."
The zl. 10 million ($2.9 million) greenfield Gdansk plant, located one kilometer south of the city center, is a computerized plant with a capacity of 80,000 cubic meters of ready-mix concrete, about the amount needed for three, 30-floor buildings such as Epstein Development's Warsaw Financial Center, sterbech said.
The Tri-city market is currently dominated by four larger local producers, Cempil, Hydrobudowa, Hossa and Mega, comprising 50% of current production, with at least five other smaller producers accounting for remaining production, sterbech said.
Unicon's strategy calls for marketing higher quality concrete than exists on the current market and better service through its computerization, he said.
But at the current retail price of about zl. 150 a cubic meter, a return on the plant investment won't be anytime soon, sterbech conceded. Concrete is a mixture of gravel, sand, cement and additives. Costs for raw materials average slightly above zl. 100 depending on the distance of the plant from material sources.
In Gdansk, raw material costs, and thus retail prices, are higher than the average because most of the cement, which accounts for 50% of costs, comes from southern Poland, he said.
"It's quite normal that you have to have your margins squeezed when you enter a market," sterbech said.
The Gdansk market is, however, a safer haven than Warsaw, where concrete producers are selling about 20% below cost just to get the contracts.
"In Warsaw the situation is a little bit crazy," he said, adding that in Gdansk, "I'm not going to say it's easier, but the competition is less."
Unicon, also with two, Warsaw-based ready-mix plants, plans to open similar plants in three other cities this year. The Gdansk plant employs 20 staff, 85% working in production and distribution, and the workforce could increase to 30 by year's end, sterbech said.
Unicon has purchased land for another site, which likely will open next year, said sterbech, who did not want to specify the location other than to say: "Now we're in Gdansk, why not Gdynia?"
The Gdansk plant is financed by the company's Denmark-based parent Unicon, which is part of the FLS Group, whose core business is design and production of cement worldwide.
