BDS publish latest asphalt sector report

Report says decline in the asphalt market in 2012 has wiped out gains made over the last two years

THE UK asphalt market is likely to fall by more than 15% in 2012, eliminating the recovery that the industry enjoyed in both 2010 and 2011. The fall has been due to the completion of a number of major road schemes, reduced local authority expenditure on roads, and a sluggish economy.

These are some of the conclusions of BDS Marketing’s recently published annual report on the sector, entitled: ‘Estimated outputs of asphalt plants in Great Britain’.

The consultancy is expecting a further decline in the market during 2013. By the end of next year BDS forecast an additional drop of 8% on current demand, although some recovery is expected in both 2014 and 2015. By this time, the asphalt industry is likely to benefit from the current Government’s attempts to boost infrastructure spending.

The report identifies Tarmac as the largest asphalt supplier, a position they have held for many years. The remaining top five companies comprise Aggregate Industries, Hanson, CEMEX and Lafarge. Between them, these companies are estimated to have more than 80% of the market. The remainder of the market is represented by around 30 companies.

BDS estimate that Tarmac are the largest asphalt producer in seven out of the 10 regions in the country, a position that will be further strengthened when they forms a joint venture with Lafarge. Although some production sites have to be disposed of to meet Competition Commission requirements, BDS calculate that the combined company will still have a higher market share than the one which Tarmac currently enjoys as a standalone business.

The report also revealed that nearly 10% of industry capacity has closed over the past four years. However, this is less than the decline in demand, and with most asphalt plants continuing to work below capacity BDS expect further plant closures over the next 12 months.

For further details, contact BDS Marketing.