Worldwide cement market trends: Thomas Armstrong, Managing Editor, International Cement Review (UK)

Filmed at Cemtech Asia 2015, 21-24 June, Grand Hyatt, Bangkok, Thailand

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Good morning. So, this session we're going to cover some more markets, and I'm going to give a presentation on worldwide cement market trends. We've heard about some of them, so skip over the ones that we've already heard about, but this is a collection of research really from the Global Cement Report, which is actually published today, the 11th Edition. This report, we track around 170 countries worldwide each year, and this information really is the accumulation of this data, it's quite data heavy.

I hope it's not too much, but the slides are there for you to look at later. What we'll do is give an overview of the markets in 2014, looking really at consumption levels on a regional basis, looking at per capita trends, a brief look at capacity developments, prices, trade and then a few words on industry developments of the leading players, and finally the global growth scenario from the research that we've been carrying out. So here's the first slide, and this is the overview of global cement consumption over the last 10 years.

As you can see volumes doubled from 2.2 billion tons in 2004 to about 4.1 billion tons last year, that's a compound annual growth rate of over 6.5%. The high growth rates observed at the start of the decade were interrupted by the global financial crisis, and as we moved towards 2014 annual growth rates have weakened from the very high levels that we saw before. Global consumption increased by just 2.6% year-on-year last year versus 7.7% in 2013. Of course, there is a great deal of variation of the underlying trends at a regional level, and this chart provides some context showing the economic performance of the different regions over the 10 year period. After the 2009 crash GDP growth rebounded somewhat, but at lower rates. The Asian markets continued to outperform global GDP growth, which is now trending at around 3.5%. In the advanced economies growth is more subdued, and this is how these economic trends have translated into cement consumption.

Global demand growth has been driven by the phenomenon of China, shown in red, whose annual year-on-year growth has been in double digits for most of the decade. This has driven up its share of world consumption from 45% in 2004 to 59% last year. Meanwhile steady growth has prevailed in the emerging markets, and the mature markets of Europe and North America have experienced a contraction, especially after 2009 when demand collapsed nearly 20%. Looking in more detail at the regional consumption in 2014 compared to 2004, we see that North Asia expanded its share by 11% over the period, and that's contrasted with Western Europe which fell by 7%, North America by 4%, and South Asia just a smidgen down by 1%.

This is a slide showing regional performance in 2014. North America, that's been leading the gains in the developed world, where demand rose by a vigorous 8.2% in 2014 versus 3.9% the year earlier. The US recovery is now well under way, but is not forecast to return to pre-recession levels till around 2019, it just shows you the strength of the crash, and how it impacted the US market.

In Western Europe, the rate contraction has slowed considerably from -14% in 2012 to -1% last year, reflecting the bottoming of this contraction with markets such as Spain recovering finally, and strong performance in the UK in particular. So we expect modest return to growth in 2015 in Western Europe.

The best performing regions over the period were in Sub-Saharan Africa led by Central Africa with double digit rates each year, as markets such as Angola really boomed. In the Middle East, political unrest and economic headwinds have seen demand

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