Exclusive extracts from this 114-page-long report:
- What is the business?
Cement is the core component in the manufacturing of concrete, the material at the heart of construction, a market where global demand is fairly equally split between residential building, non-residential building and infrastructure. Cement, which plays a binding role, is mixed with aggregates (about 80%) and water (approximately 12%) to obtain concrete. Cement, like aggregates, is a commoditised/standardised product, thus making cost efficiency a key competitive advantage. […]
- What are the main markets?
Emerging markets such as China, Brazil and India recorded stronger growth, while industrialised regions saw relatively moderate growth (North America) or stagnation (Europe and Japan). In the coming years, construction demand growth will continue to be driven by emerging markets, despite the slowdown in China. Emerging countries, particularly across Asia and Africa, are making significant investments in housing and infrastructure, including offices, factories and hospitals. [...]
- Who are the key players?
The cement industry is capital intensive and the construction of a new production line can represent more than two years of full capacity sales. As a result, the sector has witnessed growing concentration since the 1970s. In recent times, consolidation has further increased with the merger of Lafarge and Holcim, and also Heidelberg and Italcementi, all ranked among the industry's top players in terms of annual production capacity. However, the industry remains highly fragmented in emerging markets, particularly in India and China where multinational corporations compete with national and regional cement producers. [...]
- How intense is competition?
Despite high entry barriers, a few companies based in emerging markets such as Siam Cement Group, Siam City Cement, Dangote and Anhui Conch, whose scale used to be confined to their respective domestic perimeters, have grown into strong regional players. They are likely to increasingly challenge the domination of global players such as LafargeHolcim and Heidelberg, especially in fast-growing regions such as Asia and Africa. [...]