The UK asphalt market is likely to fall by more than 15% in the current year, eliminating the recovery that the industry enjoyed in 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 annual report on the sector that has just been published, entitled Estimated outputs of asphalt plants in Great Britain.
The UK asphalt market is likely to fall by more than 15% in the current year, eliminating the recovery that the industry enjoyed in 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 annual report on the sector that has just been published, 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 is forecasting an additional drop of 8% on current demand. Once this lower market prevails, it expects some recovery 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 it has held for many years. The top five companies also comprise Aggregate Industries, Hanson, Cemex and Lafarge. Between them, these companies are estimated to have over 80% of the market. The rest of the market is represented by around 30 companies.
BDS estimates that Tarmac is the largest asphalt producer in seven out of the ten regions in the country. Its position will be further strengthened when it forms a joint venture with Lafarge. Although some production sites have to be disposed of, to meet Competition Commission requirements, BDS calculates that the combined company will still have a higher market share than the one which Tarmac currently enjoys as a stand-alone business.
Nearly 10% of industry capacity has closed over the past four years. However, this is less than the decline in demand. With most asphalt plants continuing to work below capacity, BDS expects further plant closures over the next 12 months.
“As well as the asphalt companies themselves, the report is a valuable reference document for suppliers of bitumen and other products and services to the industry,” says Julian Clapp at BDS Marketing Research.
