UK asphalt market stabilizes in 2013
BDS Marketing expect the market to stabilize this year followed by increase in both 2014 and 2015
BDS Marketing Research Ltd say the asphalt market is likely to stabilize during 2013 after a fall of around 18% in demand during 2012 wiped out the recovery that asphalt producers had enjoyed in the previous two years.
Although the elimination of any further decline in demand is welcome, the asphalt market has performed less well in 2013 than the aggregates and ready-mixed concrete sectors, as asphalt producers rely on government expenditure for much of their business and government finance remains tight.
While aggregates and concrete companies have been able to enjoy the recovery in the private housing sector in 2013, the asphalt used on housing estate roads represents a smaller part of the market than for other building materials.
These are some of the conclusions of BDS’s recently published annual report on the sector, entitled ‘Estimated outputs of asphalt plants in Great Britain’.
According to the report, asphalt demand has been improving since the middle of 2013 and the consultancy is expecting an increase in asphalt markets in both 2014 and 2015, when demand could be around 10% higher than current levels. By this time, the asphalt industry is likely to benefit from the current Government’s attempts to boost infrastructure spending.
The report identifies Lafarge Tarmac as the largest asphalt supplier in Great Britain with around one third of the market. The top five companies also include Aggregate Industries, Hanson, CEMEX and Breedon. Between them, these companies are estimated to have more than 80% of the market, with the remaining market share represented by around 30 companies.
BDS estimate that Lafarge Tarmac are the largest asphalt producers in eight out of the 10 regions in the country, and the second largest in the remaining two regions.
Apart from the Lafarge Tarmac joint venture, the largest single ownership change during the year was the acquisition by Hanson of the 50% of Midland Quarry Products that they did not already own. There were also three other acquisitions.
The BDS report also identifies 18 asphalt plants that have closed over the past year, although the consultancy says it has also picked up seven consents for new plants and a further two permissions for replacement plants.
Commenting on the report, Julian Clapp, lead consultant at BDS, said: ‘Investment in new plants is often in a different area to where facilities have been closed. This can create regional imbalances. Some areas will suffer from more competition, whilst in other regions there may be opportunities for the remaining suppliers where plants have closed.’
For further details of the report, contact BDS Marketing.