Brazil’s cement sales grow in 2007

Brazil’s cement sales grow in 2007
Published: 11 January 2008

Brazil’s cement consumption is expected to have reached 44.7Mt in 2007, up
9.8% on the previous year, national cement industry association SNIC
executive secretary José Otávio Carvalho said.

Although the exact amount has yet to be confirmed, "these numbers are
exceptional since we expected a rise of only 5%. The scenario started to
change last July," Carvalho told Business News Americas.

In November, cement consumption rose 14.3% to 4.1Mt compared to the same
month the year before, and increased to 42Mt in January-November, up 10.2%
year-on-year. Demand rose in all of Brazil’s states, especially in the
southern and central-western regions, where it climbed 15.4% and 15.1%,
respectively, in the first 11 months of 2007.

Furthermore, According to a study from private economic think tank Fundação
Getúlio Vargas (FGV), cement prices also rose 18.2% to an average 14.21
reais (US$8.05) for a bag of cement in 2007 compared to the previous year.

However, Carvalho responded that this rise was a recovery in prices, not an
increase. "The sector was stagnant for over six years. In 2006, we returned
to the same consumption level that we had in 1999, which was 40.4Mt. So the
increase noted by FGV is, actually, a recuperation of the 19.1% and 4.09%
reductions that we recorded in 2005 and 2004, respectively."

SNIC, which represents 90% of the Brazil’s cement industries, attributed the
strong performance to increased demand in the construction and
infrastructure sectors.

Carvalho also expects cement sales to rise 10-11% in 2008. "The civil
construction sector is due to expand this year as a result of higher credit
offering in the country and thanks to the PAC [federal government’s economic
growth acceleration plan], which is expected to generate public and private
investment of 504bn reais over four years," he said.