First publishedin Aggregates Business Europe
Jim O'Brien on a recent visit to Stevin Rock's Khor Khuwair 60 million tonnes/year quarry in the United Arab Emirates, the largest limestone quarry in the world
Aggregates demand is growing globally. Jim O’Brien, convenor of GAIN (Global Aggregates Information Network) and honorary president of UEPG (European Aggregates Association) examines the key facts and figures behind this welcome trend.
In the February/March issue of Aggregates Business, I outlined the membership of the Global Aggregates Information Network (GAIN, www.GAIN.ie) across six continents. In this article, I will summarise the best available data on aggregates production in each region, demonstrating a positive overall global growth.
European aggregates production fell by 30% between 2007 and 2013 due to the economic crisis. It has recovered by some 16% since 2013, bringing the 2017 total EU28, plus EFTA, consumption back to the 3 billion tonnes level of a decade earlier. Growth has continued in 2018. The UEPG data (www.UEPG.eu) exhibits variety in the national production per capita, the EU average consumption being 5.8tonnes/capita (t/c).
Looking to North America, in the USA pre-crisis production was over 3 billion tonnes, but this declined by 35% to under 2 billion tonnes in 2010; it has since recovered by some 12% to 2.4 billion tonnes, equivalent to 7.5t/c. Consumption continues to grow, with significant pent-up demand in the upgrading of road, airport and harbour infrastructures, making for a positive US industry outlook.
Table 1. Best estimates of 2017 global aggregates production and usage in t/c.
In Canada, production is estimated at 400 million tonnes, equating to some 11.4t/c, driven by its strong economy, varied topography and harsh climate. The Mexican production is estimated at around 500 million tonnes, equivalent to some 5t/c. While the market varies by region, there is significant national growth potential.
Looking to South America, the Brazilian demand for aggregates had grown by 6.2% annually from 340 million tonnes in 2000 to 745 million tonnes in 2013, before suffering a 33% decline to 497 million tonnes in 2017, due to its financial crisis. This is equivalent to only 2.7t/c, but there is significant growth potential through population increase and infrastructure deficit, so growth in demand of 3-5%/year is expected in the coming years.
Next biggest is Colombia, with a current production level of 147 million tonnes, equivalent to just on 3t/c. Its main challenge is that 50% of the national demand is illegally produced, this challenge being proactively addressed by ASOGRAVAS. Next is Argentina, with a national production of some 140 million tonnes, equivalent to 3.2t/c; although this had grown strongly in recent years, it has recently been affected by economic turbulence.
Beyond the figures mentioned above, very little data is available for the rest of Central and South America, but the total regional demand is estimated at about 2 billion tonnes, which equates to just over 3t/c. The region has very significant growth potential in the next decade, derived from economic growth, expanding populations with low median age, plus major housing and infrastructural deficits.
Looking to Asia, the Chinese national production is reported at 20 billion tonnes, which equates to a remarkable 14t/c. The government is strongly rationalizing the industry, closing down smaller quarries in favour of new super-quarries with production in the range of 5-10 million tonnes or larger. The industry is undergoing an unprecedented modernization with state-of-the-art environmental controls and rapid evolution in machinery technology.
India probably now has the fastest aggregates market growth in absolute terms at a global level. Its market is now estimated at 5 billion tonnes, equivalent to 3.7t/c, with double-digit growth expected in the years ahead. One of the industry’s main challenges, being actively addressed, is the phasing-out of natural sand extraction from rivers, replacing this with manufactured sands.
Japanese aggregates production is 350 million tonnes, equivalent to only 2.8t/c, a result of its rather stagnant economy. However, reconstruction after recent weather events and the 2020 Olympics are driving current demand. Demand in Malaysia is estimated at 100 million tonnes, equivalent to 3t/c, but with solid growth prospects driven by infrastructural megaprojects. Little data on aggregates demand is available for the other major countries of the region, these including Indonesia, the Philippines, Vietnam, Thailand, Cambodia, Myanmar and the Koreas.
The total regional estimate for Asia outside of China and India is estimated at some 8 billion tonnes, equivalent to some 6.2t/c because of generally strong economic and construction growth in the region. Another salient feature of this region is the international ship-trading of aggregates, in contrast to the more usual internal supply in developed regions.
Australia has enjoyed 27 years of continuous economic growth, with recent weakness in residential construction offset by strong infrastructural and commercial activity; its production of 200 million tonnes corresponds to 8.3t/c. New Zealand demand of 41 million tonnes represents a healthy consumption of 8.9t/c. For the whole of Oceania, overall consumption is estimated at about 400 million tonnes, equivalent to some 8t/c.
Looking at the continent of Africa, South African production of 150 million tonnes represents about 3t/c. No production data is available for the rest of the continent, but it is estimated at around 4 billion tonnes, equivalent to around 3t/c, a typical figure for the early stages of economic development, with significant growth potential in the years ahead.
In the Middle East, the United Arab Emirates has a total national production of 135 million tonnes from 92 quarries, equivalent to 14.4t/c. The biggest company, Stevin Rock, produces 80 million tonnes from three major sites, including more than 60 million tonnes from Khor Khuwair, the largest limestone quarry in the world. Little production data is available for the rest of the Middle East region, but is estimated at 2.8 billion tonnes, equivalent to 7.2t/c, due to the ongoing buoyant construction in the region.
Russian aggregates production continues to grow strongly, now at 700 million tonnes, equivalent to 5t/c. As the main aggregate resources are remote from Moscow, aggregates are shipped in by train. Little reliable data is available on the rest of the former CIS countries, but the regional production is estimated at 1.5 billion tonnes, equivalent to 5t/c. Production in Turkey, having risen strongly over several years, has declined to 480 million tonnes, still representing a solid 6.3t/c, with renewed growth anticipated in the coming years.
The best-estimated global production figure comes to 50 billion tonnes, which for a world population of 7.7 billion, equates to 6.5t/c (Table 1); the breakdown by region illustrates that a remarkable 66% of global production is in Asia.
The global outlook to 2030 looks positive, with aggregates production driven forward by three key factors, namely, increasing global population (reaching 8.5 billion by 2030), continued economic development and increasing global urbanisation (reaching 60% by 2030). Accordingly, it is estimated that global aggregates production will increase to some 60 billion tonnes by 2030. Regionally, the strongest growth will be in Asia, particularly in India, with lower but positive growth in Africa and Latin America.
It is quite remarkable that the aggregates industry is still highly fragmented, with the identifiable top 20 players combined producing less than 5% of global production, hence future industry consolidation is likely. The other 95% consists of small and medium-sized enterprises (SMEs), for which accurate data collection is very challenging. Only the top nine players produce more than 50 million tonnes each, the top three leaders being HeidelbergCement, CRH and LafargeHolcim (Figure 1)