CemWeek explores how the premium building material, traditionally favored by mature economies, is carving its place among developing markets.

White cement, a premium building material as compared to grey cement, is a more expensive commodity due to its composition and production costs. It follows its own trends in terms of geographical distribution of output capacity, bagging and transportation, trade, and consumption. Developed markets with more purchasing power are the main users, but cultural and climatic variables are also significant. The typical way in which white cement is applied – ranging from masonry and architectural precasting to pool finishes – also varies widely from region to region.

Since white cement has higher price margins and the raw materials for its production are scarce in some regions, trade plays an important role in the market. While some markets, such as China, have attained self-sufficiency, others, like the United States, remaining largely dependent on imports.

 

Capacity additions

White cement production capacity has increased by an average annual rate of 2.5 percent between 2013 and 2018, a much faster pace when compared to the cumulative average growth of 0.6 percent registered in consumption. China, which has the capacity to produce 7.6 million tons of white cement per annum – representing around 25.4 percent of the global installed capacity – increased its output capabilities by 1.9 percent per annum during that period. To the contrary, Western Europe, which has the capacity to produce 4.4 million tons per annum, saw a fall of 0.3 percent per annum between 2013 and 2018.

Going forward, capacity additions will be concentrated in the Middle East, where installed capacity is expected to increase by one million tons until 2023. Excluding China, the region will have the largest capacity of every other region by that year. Right now, Raysut Cement and Oman Cement Company are working on a joint venture called Al Wusta Cement that will produce 300,000 tons of white cement per annum once finished, in 2020. The new factory will supply white cement to the Duqm – a fast-growing special economic zone in central Oman – but also to markets across the Middle East, East Africa, and India.

 

Output distribution                       

The availability of raw materials to manufacture white cement is confined to a few producing regions, thus prompting the trade of the premium commodity. China continues to be the largest white cement producer in the world, with a market share of around 28 percent, enough to make the country relatively self-sufficient. Western Europe is the second largest producer of white cement, with around 16 percent of market share, or an output of three million tons per annum.

Production is also concentrated around a small number of manufacturers, a trend that has become more salient since 2014, with a wave of mergers and acquisitions. Those include the takeover of Italcementi by HeidelbergCement in October 2016 and the enlargement of Cementir through its subsidiary Aalborg, which bought two white cement plants from HeidelbergCement in Belgium, acquired Sacci in Italy and expanded into the Malaysian market. Currently, the top 10 global producers of white cement control around 60 percent of the total production, with the table being led by Cementir, followed by LafargeHolcim in second, and Cimsa in third.

 

Trade dynamics

With production hubs normally far from the end-user markets, trade plays a key role on white cement distribution. In 2017, white cement trade reached 5.7 million tons, an increase of 1.8 percent compared to the previous year. Seaborne haulage represents most of the white cement trade globally, at around 65 percent. Most of that trade is made in large bags, which represent around 60 percent of all trade, while retail bags account for the remaining 40 percent (...)

 

Read the full article in CemWeek 45

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