Healthy World Cement Production Bodes Well for UK SectorLast Updated: February 1, 2019
UK cement production may have taken a battering during the global recession, but lately the signals suggest the sector is on the cusp of renewal and significant growth.
THE British cement sector is poised for significant growth. The rising tide for world cement production, due to increasing global demand, has given rise to predictions of a record-breaking 2016 for UK building contractors. Some commentators claim the industry is booming already.
The Irish low-carbon cement company Ecocem has increased exports to the UK. In March 2016, they opened a new terminal on the Manchester Ship Canal, prompted partly by what The Irish Times branded a “booming market” as well as by changes to UK coal and steel “that have hit supplies of the type of cement Ecocem produces”.
Hard data paints a measured picture of the health of British cement. A recent IBISWorld market research report noted low single-digit growth and revenue just north of £900m during 2015.
This modest growth must be considered in light of the impact on British cement of the global recession. Prior to that, the UK industry was producing 12m tonnes of cement per year. Within four years, this contracted to 8m tonnes.
While comparisons can be misleading, it is important to look at UK outputs against those of the world’s top 10 cement producing countries and cement producers, using data mined from Global Cement’s most recent survey of cement production worldwide.
Top 10 Cement Producing Countries in Million Tonnes: 2014
World Cement Production 2015 – Top 10 Companies
Even at a peak, the British cement industry is far below the output of the lowest of the top 10 producing countries. But the two empirically-based market analyses cited here create grounds for optimism about the future of UK cement.
Global Cement Magazine’s survey of the top 100 operations in world cement production notes that while global cement growth has been uneven, production has continued to grow “in spite of the financial crisis”. And although documenting only modest growth during the most recent year, IBISWorld predicts the UK industry is “on solid ground” for the period ahead.
There is no doubt that the British cement sector experienced a bruising phase from the global economic turndown, and that the road to even modest growth has been painful.
Industry leaders are at best cautiously optimistic; their visions of possibility tempered by the reality of challenges to further growth and outright recovery.
Announcing the publication of the influential strategy document Cementing The Future, in September 2013, Dr Pal Chana, executive director of the Mineral Products Association (MPA), said that recovery would greatly depend on whether the government would “create a level playing field in terms of the cost of regulation and unilateral ‘green taxes’ that overseas competitors do not face”.
There are other aspects to the UK cement market which are distinctive and ‘best practice’. It’s interesting that the UK market is one of the first to use Ecocem’s cement, whose manufacture involves less carbon production than with traditional processes.
Although British demand for Ecocem has been affected by domestic financial and logistical factors, the move also seems to chime with a sustainable trend identified as long ago as 2009 by The Boston Consulting Group in The Cement Sector: A Strategic Contributor to Europe’s Future.
This report noted moves by the industry towards investment in recycling of concrete—“reducing both the use of raw materials and the need for landfill”. In 2009, a report by LEK Consulting noted that the UK was “leading the way in Europe” in this regard.
The Boston Group report also highlighted efforts to protect and promote biodiversity and “green infrastructure”; and a “a long history of successful collaboration with conservation organisations, which has allowed for significant improvements in terms of knowledge and preservation of ecosystems and biodiversity”.
There is no doubt that despite the health of the world cement production trends, future challenges for the British cement industry will be rigorous and the Mineral Products Association will no doubt have to frequently reignite its “create a level playing field” campaign.
However, the measured optimism of the IBISWorld report should not be taken lightly, and the outright enthusiasm of a contracting industry enjoying its most robust health for years, suggest that the UK cement industry could be on the cusp of a bright new dawn.