In 2010, FLSmidth announced in its annual report that optimism and customer interest gradually returned after a marked slowdown in customers’ investment plans in 2009.
In cement, India was the prime market and accounted for 35% of global newly-contracted cement kiln capacity (exclusive of China) in 2010. In addition, activity has primarily been focussed in the developing countries in Asia, Africa and South America which are currently experiencing high economic growth. In 2010, the global market for newly-contracted cement kiln capacity (exclusive of China) amounted to 65Mta (2009: 45Mta), FLSmidth & Co’s share of the market being 36% (2009: 38%).
The demand for cement capacity depends on local economic growth and local conditions of supply and demand which means that the requirement for new cement capacity may exist locally, irrespective of the overall global business cycles.
Mineral processing, on the other hand, is a global market with global pricing. The demand for new capacity for the extraction of minerals is therefore to a much larger extent than cement dependent on the overall global business cycles. Mineral prices rose to new record highs in 2010, which had a positive effect on the mining companies’ plans for future investments. Accordingly, mineral processing investments increased considerably in 2010 compared to 2009.
Outlook for 2011
In 2011, the global market for newly-contracted cement kiln capacity (exclusive of China) is expected to remain at approximately 65Mta, of which India is expected to account for approximately 20Mta. This will result in an increasing order intake regarding major cement projects in 2011 compared to 2010.
Based on the current market prospects, 2011 is expected to see rising investments in the minerals industry, and this is expected to result in an increasing intake of both small and large orders plus customer services orders.
However, the order flow is not necessarily expected to be evenly distributed across the year, which means that the quarterly order intake will vary. Particularly materials handling activities are expected to see positive development and become a growth market for FLSmidth.