EUROPE CEMENT MARKET
- The European cement sector has set an objective of reaching net zero greenhouse gas (GHG) emissions by 2050. It also aims to reduce emissions in the sector by 30pc by 2030 for cement and by 40pc down the value chain. The strategy involves all elements of the cement value chain: clinker, cement, concrete, construction and (re)carbonation.
- The new European Commission announced its flagship “Green Deal” aimed at turning the EU into the first carbon-neutral continent by 2050. The Green Deal presents a number of challenges for European industry and for the cement industry in particular.
- The Green Deal suggests a life cycle approach in developing product policies to foster the uptake of low carbon solutions.
- The Euroconstruct area reached EUR 1.60 trillion value in 2018, split into 38% for new buildings and 41% for building renovations, and 21% from civil engineering. These proportions are temporarily changing, however, with civil engineering becoming a major driver between 2017 and 2021 and new residential buildings falling behind in all regions and reappearing as a leading segment after 2021.
- HeidelbergCement has strengthened its climate neutrality commitments by joining the Stiftung 2 support group, a network of private companies lobbying for climate goals. The group says that it wants to develop cross-sector approaches and concepts for Germany and Europe in order to make climate protection a sustainable and successful business model.
- Vicat recorded net sales of Euro2.07bn in the first nine months of 2020, up slightly from Euro2.06bn in the first nine months of 2019. Sales rose in Africa by 23% to Eur 198m from Euro 161m, in Europe (excluding France) by 8%.
The European Cement industry accounted for xx Metric tons/year of cement capacity with production of cement ranging from xx Metric tons/year in 2019 and is further forecasted to reach about xx Mt/year by 2025 at a CAGR of xx%.
Cement is obtained by grinding cement clinker and, in some cases, supplementing it with additions. Spain, Italy, Germany, France and Poland are the largest producers of cement clinkers in the EU.
Before the pandemic, the industry was not operating at full capacity; with the global economic slowdown, plants were expected to see further drops in utilization rates. While companies are likely to finish committed expansions that were delayed due to lockdowns, and start new projects beyond 2021 depending on the pace of economic recovery.
As countries began to reopen post-pandemic, consumption of cement and concrete is expected to gradually recover, fueled by economic growth, urbanization, and population growth, especially in emerging markets. The industry’s biggest challenges and opportunities are going to be seen in the longer-term.
To survive and flourish, companies in Europe will need to prioritize sustainability and raise their environmental standards as governments, investors, and the general public increasingly are pushing companies to reduce their carbon footprint. Cement companies that prioritize sustainability are likely to emerge as the leaders in the next cycle.
Many companies are already taking significant measures towards decarbonization.
The following are the two main standards which apply to cement:
European cement standard EN 197-1 Cement – Composition, specifications and conformity criteria for common cements which defines 27 distinct common cement products and their constituents. These 27 products are grouped into the following categories:
- CEM I Portland cement (>95% clinker)
- CEM II Portland-composite cement (65-94% clinker)
- CEM III Blastfurnace cement (5-64% clinker)
- CEM IV Pozzolanic cement (45-89% clinker)
- CEM V Composite cement (20-64% clinker)
The principal use of cement is to make concrete, with two main types: Ready-Mix Concrete or Prefabricated Concrete.
Ready-Mix Concrete is produced at a ready-mix batch plant and distributed by truck-mixer to construction sites.
Prefabricated (precast) Concrete is the second major type and this is cast in a reusable mould which is then cured in a controlled environment and transported to the construction site where it can immediately be lifted into place. This production in standardised conditions requiring only assemblage of prefabricated elements on the jobsite enables application in less favourable weather conditions.
The remaining 25% of cement is consumed by:
- Retailers & wholesalers (cement in bags for mortar and small concrete batches, supplying small contractors and private individuals).
- Contractors producing their own concrete.
- Mortars, wet and dry, for mostly major building sites.
Lastly, some niche uses include cements used in (oil) drilling for borehole stabilisation, and cements for immobilisation of back fillings on refuse tip embankments.
BY END USE
- Residential Construction
- Non-residential Construction
- Infrastructure/civil engineering
- Repair & Maintenance
The European cement industry is facing substantial operational and investment costs, due to stricter environmental regulations. Similarly, labour, raw material extraction, and fuel costs are also on the rise. It is expected that European governments will continue to introduce new legislation to curb carbon emissions further.
To comply with the new regulations, the European cement industry is expected to continue to upgrade their technologies as well as use alternative fuels, such as biomass, fly ash, blast furnace slag etc.
The UK is facing rising operational costs due to reducing carbon dioxide emissions, as the country adopted stringent regulations to reduce carbon dioxide emission by 57% until 2030.
Cement is one of the industries which would need to reduce emission further to comply with the government regulations. However, this will require additional investment and would result in high production costs.
In Europe, Turkey is the largest country in terms of cement production. Residential construction is increasing on the back of government projects of affordable housing schemes. At the same time, infrastructure spending is also expanding.
Under Turkey’s Vision 2023, the government planned to build 70,000 km of roads network and 20,000 km of the railway network. There are other various government projects under private-public partnerships including bridges, airports, tunnels, railway stations, etc.
Moreover, energy projects and healthcare projects are also underway. Overall, the Turkish demand for cement is expected to remain elevated during the forthcoming years.
The majority of EU cement producers operate on a global level, giving them access to global best practice and technology. Raw materials are extracted mainly onsite, which avoids transportation costs and environmental damage.
- Trade – cement is a high-density product with a relatively low selling price. Transport costs are therefore a determinant to trade. The EU exports mainly to the US and imports come mainly from East Asian countries like China, Thailand, and the Philippines.
- EU cement producers own almost 60% of the cement and lime production capacity in the US, and have significant production facilities in the rest of the world.
- Because of the relatively high costs of transport each of the larger national markets in Europe is, in effect, composed of a number of smaller regional markets,
|2||Scope of the report|
|7||Insights from Industry stakeholders|
|8||Cost breakdown of Product by sub-components and average profit margin|
|9||Disruptive innovation in the Industry|
|10||Technology trends in the Industry|
|11||Consumer trends in the industry|
|12||Recent Production Milestones|
|13||Component Manufacturing in US, EU and China|
|14||COVID-19 impact on overall market|
|15||COVID-19 impact on Production of components|
|16||COVID-19 impact on Point of sale|
|17||Market Segmentation, Dynamics and Forecast by Geography, 2020-2025|
|18||Market Segmentation, Dynamics and Forecast by Product Type, 2020-2025|
|19||Market Segmentation, Dynamics and Forecast by Application, 2020-2025|
|20||Market Segmentation, Dynamics and Forecast by End use, 2020-2025|
|21||Product installation rate by OEM, 2020|
|22||Incline/Decline in Average B-2-B selling price in past 5 years|
|23||Competition from substitute products|
|24||Gross margin and average profitability of suppliers|
|25||New product development in past 12 months|
|26||M&A in past 12 months|
|27||Growth strategy of leading players|
|28||Market share of vendors, 2020|
|30||Unmet needs and opportunity for new suppliers|