A review of ASEAN cement markets: Martin Wilkes, Independent Consultant (Indonesia)

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

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Okay, good morning ladies and gentlemen. As its just been indicated, I'm going to try and give an overall view of the ASEAN cement markets. Obviously, you've got some other speakers talking about particular countries, you've had Thailand, later on you've got talk on Indonesia, you've got on Vietnam, on Myanmar, so I don't propose to go into all the detail, but just give an overview of the ASEAN cement market. So as I've suggested here the scope is going to be, how does the ASEAN cement industry compare with the rest of the world? What is ASEAN? Because some people ask me, What is ASEAN?

People tend to get mixed up when you say ASEAN, and they say, Do you mean Asian? No, ASEAN is a separate group of countries, and how has the cement industry in ASEAN countries evolved since financial crisis of 1997/98? What is the recent cement performance of these countries, and the expectations for the next three years? And finally, look at the activities of new and existing regional players, and the impact of the Holcim and Lafarge merger.

So we just look at the global cement markets, and where does Asia stand? Well as you can see there in the red, Asia is 60% of the total world cement market. So, in Asia we're talking about it's the biggest single market for cement in the world. If we then just have a look at the Asia markets themselves, and of course, as we all know the biggest single player is China, as it is in all commodities.

If we go back pre-crisis you can see in 1997, the Chinese market had about 60% of the market in Asia, today you can see it's 80%. So the Chinese market is still a very major party as far as Asia is concerned, and one would expect that to continue, but if you look at what's happened elsewhere you can see that North Asia, which is mainly Japan, Taiwan and Korea has dramatically reduced, and you can see there if you go back to '97 that area, that region had 19% of the total market for cement in Asia, whereas today it is only 4%. So you can see there have been a lot of changes, and if we look at how that has actually happened you can see North Asia has reduced over that period of the time by 73%, whereas as we know the other markets, South-East Asia, has gone up dramatically 190%. South Asia, which is mainly India, Pakistan, Bangladesh has also gone up dramatically, but of course, China as we know is now nearly 2.5 billion tons of cement per annum. So what are we going to be looking at? We're going to be looking at basically the blue area on this map, so we'll be looking at what I call is ASEAN, and as I say, what is ASEAN? ASEAN is an association that was formed in 1967. The original five members were Indonesia, Malaysia, Philippines, Singapore and Thailand, and their aims were economic growth, social progress, cultural development, protection of peace and stability, and non-interference with each others' activities. They expanded between 1995-99, and now include Brunei, Myanmar, Cambodia, Laos and Vietnam. The total population is about 625 million people, which is 9% of the world population.

So we're talking about a big grouping of countries as well as people. What have they done? Well, they've set up procedures for ASEAN Free Trade Area, which was done in 1992, and this was followed with various trade agreements with other nations and trading blocks. They're ranked as the eighth largest world economy.

Their GDP of $2.2 trillion, but what's happening now, this has been going on for some time, is they've set up what they call the ASEAN Economic Community, which

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