UK Cement Industry Strives to Reduce Risks as Brexit Negotiations Remain Uncertain

2018-10-30 10:03:04

There has been some positive news from the UK cement industry in recent days: Cemex plans to restart construction of a second kiln in South Feliby later in 2018. This marks a full recovery of the plant after the catastrophic floods at the end of 2013, and is good news by all accounts. Around the same time, the Scottish devolved administration approved an application for an upgrade scheme at Tarmac's Dunbar cement plant.

There has been some positive news from the UK cement industry in

recent days: Cemex plans to restart construction of a second kiln in South Feliby later in 2018. This marks a full recovery of the plant after the catastrophic floods at the end of 2013, and is good news by all accounts. Around the same time, the Scottish devolved administration approved an application for an upgrade scheme at Tarmac's Dunbar cement plant. The project includes the installation of a new cement mill, the construction of a new cement warehouse, and the construction of rail loading facilities.

Figure 1: Sales of domestic, imported and other cement in the UK (2001-2017) < br/>

Data source: UK Minerals Association

Considering the uncertainty of the UK economy caused by Brexit, It's very interesting that this news is coming out at this time. However, data from the Mineral Products Association (MPA) shows that the total sales of cement products made from cement and fly ash and ground blast furnace slag (GGBS) in the UK reached 15.3 million tons in 2017. Although this figure is still short of the high of 15.8 million tons in 2007, it still marks the recovery of the cement industry. You know, after the financial crisis in 2009, the total sales volume in that year was only 10.3 million tons. The rebound in total sales partly masks changes in the market since 2007, while in terms of cement alone, cement sales in 2017 were 10.2 million tons, still below the high of 11.9 million tons in 2008. This recovery has been driven by an increase in imports of cement products, with the UK importing 1.9 million tonnes of cement products in 2017, and an increase in the use of fly ash and blast furnace slag products, which reached 3.2 million tonnes in 2017.

Cemex and Tarmac are not the only companies to have announced projects recently. Hanson, a subsidiary of Heidelberg Cement in the UK, is upgrading its Padswood plant and will invest 22 million euros in a new grinding station. Irish slag cement grinding company Ecocem established an import port in Hillness in mid-2017, and French grinding company Cem 'In' Eu has also expressed interest in building a factory in London.

As discussed earlier this year, there appears to be a risk associated with new engineering projects in the UK, given the uncertain status of Brexit. The entire supply chain may be affected, companies have delayed investment plans, and the pound continues to depreciate. The collapse of Carillion, a construction services company, has also had a knock-on effect on the industry, with the UK cement industry no longer supported by major capital projects as the infrastructure for the Crossrail rail project is completed. The quarterly output curve of the UK construction industry released by Arcadis shows that the output of the UK construction industry has been growing steadily since mid-2012, but gradually leveled off in 2017. A slightly mishandled Brexit could derail the rally. All

these show the risks and disadvantages of the British capital project. The UK cement market has changed quite a bit since 2007, with an increased focus on imported cement and secondary gel materials. Therefore, it is reasonable for enterprises to increase investment in these areas and spend money on equipment. On the other hand, whether South Feliby can increase production depends largely on whether the existing equipment can be upgraded. According to data released by MPA, in 2016, demand in the vicinity of the plant (Yorkshire and Humberside) was relatively stable, but in the East Midlands and the East of England, cement sales increased.

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There has been some positive news from the UK cement industry in recent days: Cemex plans to restart construction of a second kiln in South Feliby later in 2018. This marks a full recovery of the plant after the catastrophic floods at the end of 2013, and is good news by all accounts. Around the same time, the Scottish devolved administration approved an application for an upgrade scheme at Tarmac's Dunbar cement plant.

2018-10-30 10:03:04