Set for rationalisation?

Published 18 June 2014

With the construction sector predicted to grow by just 1.1 per cent in 2014, there is little for South Korea’s cement producers to look forward to. As the focus turns to overseas markets, cement exports are on the up, but how long can this strategy sustain the country’s cement overcapacity crisis?

South Korea’s cement producers will need to find a long-term solution to their overcapacity

woes as the domestic market has reached saturation point and export growth is unsustainable

In February this year, South Korea’s president Park Guen-Hye launched her three-year blueprint to help steer Asia’s fourth-largest economy towards its next phase of growth. Average annual growth over the past six years has slipped to 2.9 per cent, a far cry from the 5.2 per cent seen between 2000-07. According to the IMF, GDP is expected to increase by 3.7 per cent in 2014, followed by 3.8 per cent in 2015. Some analysts, however, are unconvinced. With a rapidly-ageing population, massive household debt, falling foreign direct investment (FDI) and a sluggish construction sector, the president certainly has her work cut out.

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