Hungarian construction materials producer Masterplast announced it has shut down its polystyrene foam insulation panels plant in Transylvania, Romania.
Masterplast said the operation at Sepsiszentgyörgy in central Romania, which suspended production at the end of 2017, has now closed permanently as it was not considered economically viable.
Located almost 200kms north of the capital Bucharest and with an annual panel capacity of 150,000m3 last year, the plant's sales of the EPS thermal insulation were stagnant reportedly due in part to Romanian market competition.
“The plant was too far away from the potential markets in Bucharest, and it was only possible to transport products at an unprofitable price.
“But demand was low in the immediate area of the plant and the site was only able to use about 30% of its capacity,” explained Masterplast group chief executive officer Róbert Nádas.
While sales of the firm's other insulation products including heat, sound and water proofing and its fibreglass mesh reinforced building insulation system have grown in 2018, those of EPS panel material slumped.
In recent months, the contribution to group sales of Masterplast's subsidiary in Romania has slipped from 15% to just 13%. Even so, the Romanian market is ranked second only to Hungary in terms of its business.
The Sepsiszentgyörgy plant is reported to have ceased production this May with the panel manufacturing capacity switched within a month to Masterplast operations in Hungary. The company already has a technologically modern building insulation plant at Subotica, Serbia, located close to the Romanian border which can supply local markets.
However, Masterplast has retained its Romanian sales offices in Bucharest and Oradea which serve local customers. The redundant plant also exported some insulation products to Bulgaria and Moldova.
In Serbia last year, Masterplast committed to investing around Euro 6.7m to expand capacity and the product range at its Subotica plant which manufactures the fibreglass mesh based interior building insulation material.
In the first half of 2018, Masterplast recorded a profit after tax of over Euro 1.7m after generating sales of more than Euro 45.6m. Masterplast group, based at Sárszentmihály in Hungary, invested around Euro 1.6m to establish the Romanian EPS insulation unit in April 2012 where it had just begun manufacturing adhesive products. The plant was formerly owned by the German Schwenk Group