Polish distributor Bowim expects domestic construction activity to continue spurring steel demand after hiking its shipments in 2018.
In recent years the launch of numerous previously-delayed investments has revived construction sector activity. The most significant of these are in the rail, road, manufacturing and residential housing sectors. Steel demand from these investments is expected to continue. A large number of these investments do, however, depend on EU funding and could therefore be delayed, Bowim says.
Poland requires an estimated PLN 310 billion ($81.45 billion) of investment into infrastructure by 2020, while €25.8 billion ($29 billion) of the latest €82.5 billion round of EU funding has been allocated to infrastructure.
“In 2019 and the following years Bowim Group’s sales network is expected to expand further, including the opening of a local warehouse network in Poland’s main cities,” the distributor says in a report seen by Kallanish. “The creation of a retail distribution network is to take place through the acquisition of entities, leasing of infrastructure (e.g. warehouses), or construction of new branches.”
Bowim increased consolidated sales 12% on-year in 2018 to 508,012 tonnes. Sheet sales rose 10% to 166,599t, pipe and profile shipments were also up 10% to 106,887t and rebar sales surged 38% to 95,925t. Sales to the steel structures sector retained a 22% share in overall sales, the construction sector’s share rose 2 percentage points to 20% and the trade segment saw share drop 1pp to 18%.
Bowim’s revenue rose 21% on-year in 2018 to PLN 1.37 billion ($359.95 million) but net profit fell -39% to PLN 11.4m due mainly to higher cost of goods sold.
Celsa Huta Ostrowiec took a 12% share in Bowim’s steel procurement in 2018 versus 13% in 2017. Intake from other major supplier CMC Poland fell below 10% and did not therefore require to be reported.
