Over the next five years, cement demand in Colombia is expected to reach 15.3 million tons, according to CW Research’s 2018 Colombia Cement Market Report.
This improvement will be more noticeable from 2019 to 2021, when CW Research anticipates large-scale projects to be in their most cement-intensive stages.
“In the upcoming years, the cement sector in Colombia will be shaped by the 4G infrastructure projects. In one hand, that project will be one of the main consumption hubs for Colombian cement, while on the other, it will allow transportation to become less dangerous and costly. This is expected to spark up an increasingly competitive environment, as producers become more susceptible to pricing competition both internally and from imports”, notes Filipe Gouveia, CW Group’s Associate Analyst.
4G highway project boosting cement consumption
Domestic cement demand has risen at an annual average rate of over two percent over the previous five years. Colombia is currently undergoing large-scale infrastructure projects in order to boost the country’s productivity, often hindered by high transportation costs. As a result, the 4G highways project, aimed at constructing or upgrading 11,000 kilometers of highway, has been developed since 2014.
The government is currently focusing on attracting investors for this project under PPP agreements, with 18 out of the 30 highway projects having started construction.
An expanding cement market
The Colombian cement sector is dominated by three major players: Cementos Argos, Cemex, and LafargeHolcim, which together control 87.7 percent of the cement production capacity in the country. There is currently a total of 21 operational plants, eight of which are grinding units, and the remaining integrated.
Domestic cement prices in Colombia have remained stable over the years, as transport costs keep regional markets segmented and competition localized.
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