Business Forum • 8 April, 2024 at 9:39 AM
Investment projects totalling more than €500 million are being prepared for submission by the REI Grup team under the ConstructPLUS scheme, implemented by the Ministry of Economy, Entrepreneurship and Tourism (MEET) and dedicated to companies operating in the construction materials industry, which want to diversify their activity either through new production lines or by expanding production capacities.
Although the interest for investments in the building materials manufacturing sector is huge, the budget of the scheme is limited in this session starting today, April 8, with an allocation of only €149 million.
“We are in discussions and negotiations for large investment projects with a total value of more than €500 million with ConstructPLUS being one of the most awaited state aid schemes for the companies we work with. We are talking about companies active in the construction materials manufacturing sector, eligible under this funding scheme. The interest is huge, but it is clear that not all projects will benefit from funding due to the very small allocation", Roxana Mircea, managing partner REI Grup, one of the most important companies specialized in consultancy services for attracting non-reimbursable funds in Romania stated.
According to Roxana Mircea, the increased demand in the field of building materials production shows the appetite of investors for the local market, with both Romanian entrepreneurial businesses and international groups on the list of companies interested in developing projects.
"These are investments that Romania has not seen in recent years, in the order of hundreds of millions of euros. The ConstructPLUS scheme, implemented by MEET, is welcome and long overdue, but it needs to be matched with the real need in the market. We risk missing out on billions in investment if we fail to find the necessary funding sources to meet the vast majority of these investment plans. Romania is a market with great potential, and the construction sector has placed us on the European map of countries that have attracted important names in recent years, as well as successful entrepreneurial projects that have reached beyond the country's borders", Roxana Mircea added.
ConstructPLUS launches today, April 8
The ConstructPLUS funding scheme opened today, April 8 and run until May 8, its main objective being to stimulate investment with non-reimbursable support to increase the production of construction materials, especially in sectors where the trade balance is negative, where we practically import more than we produce - to cover demand - and in areas considered economically disadvantaged.
Eligible applicants under this funding scheme are start-ups, micro-enterprises, SMEs, but also large enterprises, and the maximum non-reimbursable support that companies can attract for a single investment project amounts to €57.75 million for large enterprises, i.e. a maximum intensity of 70%.
In order to reach the maximum grant and obtain the desired funding, the investment should be carried out in a county that reaches the maximum intensity (of 70%) - these include the counties of Galati, Prahova, Dolj or Gorj.
The classification of the projects that could obtain the desired funding under this state aid scheme will be based on a score obtained by the applicants, reflecting both their financial performance, where the value of the investment project should exceed the threshold of €40 million, the subscribed share capital should be one with a value of more than RON 500,000, and the CAEN code of the company that will apply under this program should have a negative balance in the trade balance (reported to the year 2022).
Eligible areas that can apply through the ConstructPLUS program must be part of the following sectors of activity:
NACE 1623 – Manufacture of other carpentry and joinery for construction purposes;
NACE 2223 – Manufacture of plastic building products;
NACE 2312 – Processing and shaping of flat glass;
NACE 2331 – Manufacture of ceramic tiles and slabs;
NACE 2332 – Manufacture of bricks, tiles and other construction products from fired clay;
NACE 2342 – Manufacture of sanitary ware from ceramics;
NACE 2351 – Cement manufacturing;
NACE 2352 – Lime and plaster manufacturing;
NACE 2361 – Manufacture of concrete construction products;
NACE 2362 – Manufacture of plaster products for construction;
NACE 2363 – Concrete manufacturing;
NACE 2364 – Mortar manufacturing;
NACE 2369 – Manufacture of other non-metallic mineral products n.e.c;
NACE 2370 – Cutting, trimming and finishing stone;
NACE 2399 – Manufacture of other non-metallic mineral products n.e.c;
NACE 2511 – Manufacture of metal structures and component parts of metal structures;
NACE 2512 – Manufacture of metal doors and windows;
NACE 2732 – Manufacture of other electrical and electronic wires and cables;
"ConstructPLUS is the most awaited financing program for companies specialized in the production of building materials. Although the allocation is relatively small compared to the existing demand in the market, we would like MEET to consider increasing the allocation for future editions, similar to what is being negotiated for INVESTALIM. In the case of companies that fail to obtain funding under the current scheme, we have solutions to re-submit projects to future schemes that will open during the year - the session for large enterprises - Fair Transition, the next session on GD 807/2014 or a future session of the scheme for the manufacturing industry - regulated by GD 959/2022", Roxana Mircea added.
REI Grup: investment projects of more than €50 million financed in the last 3 years
The production of construction materials has been one of the most active investment sectors in the last three years, with most of the investments being made with non-reimbursable support through several state aid schemes made available by the authorities.
The funding schemes regulated by GD 807/2014 and GD 959/2022 have been the main sources of non-reimbursable support for companies operating in the construction sector in the last three years, as well as for those in the REI portfolio, where important names have carried out investments exceeding €50 million and benefited from non-reimbursable support worth more than €20 million.
Among the most important companies that have made investments in the building materials production sector are Casa Noastra - QFort, Barrier or Austrotherm, as well as other big names in the sector, specialised in the production of PVC joinery, precast concrete, varnish, paint production and many others,
The Ministry of Finance prepares new state aid scheme for investment
The Ministry of Finance is preparing a new state aid scheme aimed at regional development through investments that will balance Romania's trade balance in eligible sectors. The multiannual budget amounts to more than €450 million, while the annual average is around €150 million.
The future call, a successor to the well-known scheme regulated by GD 807/2014, which has supported investments of hundreds of millions of euros in Romania in recent years, is aimed at both start-ups and SMEs or large companies, and the condition is that the return on turnover must be greater than zero in one of the last three completed financial years.
In addition, the minimum amount of costs eligible for funding must be at least €10 million. This includes both tangible assets, such as new buildings or the purchase of equipment, and intangible assets (e.g. patents, leases, know-how or other intellectual property rights).
Gorj county is the only one that will benefit from the highest intensity, i.e. where beneficiaries will be able to receive up to 70% of the maximum level of state aid requested. The maximum amount a beneficiary can receive is €57.75 million.
A total of 16 other counties, including Bacau, Botosani, Neamt, Suceava, Vaslui, Braila, Buzau, Galati, Vrancea, Tulcea, Calarasi, Ialomita, Teleorman, Mehedinti, Olt and Valcea, will benefit from a maximum state aid intensity of 60%, i.e. a maximum grant of €49.5 million.
The other counties will benefit from maximum aid intensities of between 30 and 50%. Bucharest is excluded from non-reimbursable support through state aid schemes.
In the case of investments related to NACE code 5510 - Hotels and similar accommodation facilities, the maximum level of state aid that can be granted is RON 15 million, equivalent to around €3 million.
Moreover, the Ministry of Economy, Entrepreneurship and Tourism (MEET) is preparing a future session on the scheme governed by GD 959/2022, intended for manufacturing industries, with a total budget of over €450 million and an average annual allocation of about €150 million.
In this case too, the maximum intensity of non-reimbursable support may go up to 70%, i.e. a maximum of €57.75 million (in the case of Dolj, Gorj, Prahova or Galati counties), while the remaining counties would benefit from allocations of between 30-60%.
The scheme regulated by GD 959/2022 had an open session from 1 November 2022 to 16 December 2022, for which 97 companies applied. Of these, only eight qualified for support, within the budget limit of around €150 million.