Asphalt companies invest in new capacity

BDS Marketing Research Ltd’s latest annual survey of the asphalt industry reports that 10 new asphalt plants have opened in Great Britain over the last 18 months and a further seven are due to open soon. At the same time, a number of smaller asphalt operations have been closed in locations where investment in replacement plants could not be justified.

These changes in capacity helped the asphalt industry meet the increased demand which occurred in 2005, with volumes around 5% higher than the previous year. However, 2006 is likely to be a more difficult year for the industry, with BDS expecting the market to fall.

Asphalt producers are faced with increases in fuel, energy and bitumen costs, and unless these additional costs can be passed on to customers, suppliers will be faced with both a decline in demand and margins. Medium-term prospects are slightly better, however, with BDS expecting a small recovery in volumes in both 2007 and 2008.

Tarmac continue as the largest asphalt supplies in the country, with BDS estimating that their market share in 2004 was 30% (including Tarmac’s share of joint-venture businesses). Aggregate Industries have consolidated their position as the second largest producer, followed by Hanson, Cemex and Lafarge. These top five companies had an estimated market share of over 80% in 2004.

For further details of the report entitled ‘Estimated outputs and shares of asphalt companies in Great Britain’, contact Julian Clapp at BDS Marketing Research Ltd on tel: (01761) 433035.