BridgeGap Engineering Blog » cement recovery

Cement Demand to Increase with Rebuilding of Infrastructure

Hannah — Thu, 16 Jun 2011 22:06:41 +0000

With America’s infrastructure crumbling and the economy still struggling to recover from its nosedive, a game of passing the buck has begun. The federal government has no money to foot the enormous bill of rebuilding and expanding roads, bridges, water and waste treatments systems, etc. Just recently a group of senators has drafted a bill that will give about $56 billion a year towards highway and transit construction. While this is a step in the right direction, America’s infrastructure needs hundreds, not tens of billions of dollars of work. Thus, much of the responsibility of finding funding is passed off to the state government. These men, in turn, look at the trillions of dollars of debt they face, and pass the responsibility on to more local governing bodies. Where will it stop? At some point it must. Indeed, maintaining and rebuilding the country’s infrastructure is necessary for the operation and safety of society, much less for America to keep up in the global race of technology and expansion. Given that America cannot ignore the state of its infrastructure, what does this mean for cement companies who produce one of the primary materials needed for this massive renovation project? Whether America attacks the problem – beginning with the passing of this new bill – or waits until the last minute in each situation, there will be an enormous need for quality cement. It may come as a slow but steady need, or in the form of mass contracts – only time and the government will tell.

Lafarge talking about expansion in India

Demosthenes — Fri, 08 Jan 2010 23:31:47 +0000

Lafarge says they will double their commitment in India over the next five years. Bruno Lafont, Chairman and Global CEO says that Lafarge primarily intends to expand organically through greenfield plant construction, but that they will not rule out acquisitions if the opportunities present themselves. Lafarge expects a consolidation in the Indian cement market in the “mid term” over the next five years. “And, if you are well prepared, you can seize the opportunity. We are open to both the possibilities. Our strategy is to invest in cement, select regions for it and to create excellent positions there,” He went on to add that Lafarge is still focused on preserving capital, and “Our strategy is to give priority to cement sector in emerging markets.” We commented on this emerging market focus by the big producers, and the opportunities it may present in the developed markets, in an earlier post.

“Painful Adjustment” in NA and Europe

Demosthenes — Wed, 30 Dec 2009 18:50:37 +0000

The Financial Times reports today that the major cement manufacturers expect cement demand in Europe and The US to be 30% and 44% (respectively) lower than in 2007. A squeeze on infrastructure projects, thanks to exploding government debts and tightening of spending is primarily to blame, they said.

The major producers are clearly focused on developing markets where demand is more organically and necessity driven. They don’t expect the situation to turn in the developed markets until 2012. Even so, given the time to market for a new production line and the spectre of impending CO2 regulations and their potential impact on capacity, we believe that regions in North America can expect to see cement shortages and high prices in the coming years as a result of the major producers business focus being elsewhere.

This is one of the consequences of the industry consolidation that has taken place over the last decade and a half. As the local independent producers have been absorbed by the global producers, the business focus has shifted from one of defining and fulfilling local market needs to one of looking at complete continents as a single market. This is not necessarily good or bad, it just is. The global producers will be investing their available capital in markets they see as having the largest short term potential. The result is that near term opportunities may be created in the Americas and Europe for those who are willing to take a risk and gain first mover advantage. Demand will continue to grow in these markets, and in some cases that demand might be extremely localized.

Cement Industry Update

experts@bridgegap — Thu, 02 Jul 2009 15:00:13 +0000

CEMEX announced on Tuesday that it had made significant progress in restructuring of its debt. It has managed to move the maturities of about 14.5 billion in dept out from the 2009-2011 time frame out to 2014. The move helps substantially secure the company’s short term financial stability.

Texas Industries is under pressure from an investment fund with a large stake in the company. The fund has stated their intention to nominate three members to the board due to what the fund managers call under performance relative to peers

Economic Recovery?

admin — Sat, 06 Jun 2009 06:53:10 +0000

Notwithstanding the excellent speech by Ed Sullivan at the IEEE Conference we reported on, the Washington Post today reports that job losses slowed dramatically in May, and were far smaller than analysts predictions, fueling hopes that economic recovery is near. While the hoped for bottom in housing has yet to be seen, more promising signs seem to be reported every week. Is all this just the result of deficit spending driven stimulus or is the turnaround real?