Capacity expansion update
Tuesday, 15 July 2008
The cement industry is currently engaged in an aggressive $6 billion capacity expansion. More than 4 million metric tons of new clinker capacity is expected to come on-line this year. An additional 10 million
metric tons of new clinker capacity is expected to come on-line during 2009. Further expansions are planned in the out years, bringing the total clinker capacity expansion to 25.5 million metric tons by the end of 2012. This investment will increase capacity more than 25% over 2007 levels. The expansion affects 25 plants with a mix of greenfield sites (7) as well as expansions at existing facilities (see tables). The capacity expansion coincides with the onset of an economic recession. In the context of aggressive capacity expansion, cement consumption is expected to experience a 30 million metric ton cyclical peak (2005) to trough (2009) decline. Imbalances are expected to characterise the market during the next three years, resulting in elevated inventories, import reductions, prolonged maintenance downtimes, lower kiln utilisation rates, the accelerated retirement of wet kilns, and potentially the postponement or delay in planned commissioning dates for new plants.
metric tons of new clinker capacity is expected to come on-line during 2009. Further expansions are planned in the out years, bringing the total clinker capacity expansion to 25.5 million metric tons by the end of 2012. This investment will increase capacity more than 25% over 2007 levels. The expansion affects 25 plants with a mix of greenfield sites (7) as well as expansions at existing facilities (see tables). The capacity expansion coincides with the onset of an economic recession. In the context of aggressive capacity expansion, cement consumption is expected to experience a 30 million metric ton cyclical peak (2005) to trough (2009) decline. Imbalances are expected to characterise the market during the next three years, resulting in elevated inventories, import reductions, prolonged maintenance downtimes, lower kiln utilisation rates, the accelerated retirement of wet kilns, and potentially the postponement or delay in planned commissioning dates for new plants.