South American cement spotlight

South American cement spotlight
Published: 15 February 2006

Across Latin America, cement production is growing at about 15 per cent each year, according to the Interamerican Cement Federation (FICEM). In Colombia, cement volumes grew 30 per cent during the third quarter of 2005 mainly due to high demand from the self-construction sector and infrastructure spending, says FICEM head Amalia Lucia Rozo.

According to FICEM, a housing boom across South America is driving cement demand, accounting for almost a third of the market. Highway construction, by contrast, only makes up about 12 per cent of the demand. "Basically, the Latin American cement market is a mirror to the region’s GDP rates," she says.

Latin America’s economy grew by 4.3 per cent in 2005, the third straight year of growth, according to estimates by the International Monetary Fund. The UN’s Economic Commission for Latin America and the Caribbean estimate that the region will see growth of 4.1 per cent in 2006.

Cemex operations in Latin America reported net sales of US$358m during the second quarter of 2005, an increase of 16 per cent over the third quarter of 2004. Domestic cement volumes in the region increased 16 per cent in the quarter versus third quarter 2004. The company is the second largest in Colombia, holding about a third of the market there.

Cementos Argos, Colombia, part of the Grupo Empresarial Antioqueno estimates US$805m revenues for this year, 58 per cent is reportedly from investments outside of Colombia. The company already has seen a 23 per cent jump in earnings through the first three quarters of this year due to higher sales and investment income.