Industry Insights & Trends: The Concrete Industry (DP IB Business Management): Revision Note

Market size and growth

• Concrete is the most widely used construction material in the world.

  • It is used for houses, schools, hospitals, roads, bridges and airports

  • Almost every country relies on concrete for development

• Around 4 billion tonnes of cement are produced globally each year

  • Cement is the main ingredient in concrete, alongside water, limestone and clay aggregates

• Production is not evenly spread across countries

  • China produces about half of the world’s cement due to rapid urbanisation.

  • India is a fast-growing market because of population growth and new infrastructure

  • The USA and Europe have slower growth because most infrastructure already exists

• Overall growth is strongest in emerging economies

  • These countries still need large investments in housing and transport systems

Leading companies and brands

• The industry is dominated by large multinational companies

  • These firms operate in many countries

  • They often own cement plants, concrete factories and quarries

Examples of global concrete and cement companies

• These companies supply materials for major projects

  • Examples include highways, airports and large commercial buildings

    • Holcim, for example, supplies infrastructure projects across Europe and Asia

• Many countries also have strong national or regional producers

  • India: UltraTech Cement

  • USA: Vulcan Materials

• Competition is often local or regional

  • Concrete is heavy and expensive to transport long distances

  • Even global firms compete mainly within regional markets

Product types and consumption trends

• Concrete is produced in several different forms

• Government rules and customer expectations are changing consumption

  • Public construction projects increasingly require sustainable materials

Market dynamics and challenges

1. The industry faces major environmental challenges

   • Cement production produces large amounts of CO₂, which contributes to climate change

2. Governments are increasing environmental regulation

   • This is especially strong in Europe

   • Producers are under pressure to reduce emissions

3. Costs are another major challenge

   • Concrete production uses large amounts of energy

   • Rising fuel and electricity prices increase production costs

   • Transport costs are high because concrete is heavy

4. Demand for concrete is cyclical

   • It depends on construction activity

   • During economic downturns, demand falls

   • Recessions often lead to lower sales and profits for producers

Emerging markets and regional differences

• Concrete demand is growing fastest in emerging markets

  • Especially in Asia and parts of Africa

  • Growth is driven by population increases and urbanisation

• Governments in these regions invest heavily in infrastructure

  • Roads, railways, housing and energy projects increase demand

    • E.g. Large transport projects in India and Southeast Asia

• In developed economies, demand is more stable

  • Examples include Western Europe and North America where most infrastructure already exists

• The focus in developed markets is changing

  • Less emphasis on new construction

  • More focus on renovation, replacement and sustainability

  • Greater use of low-carbon and recycled materials

Recycled products in concrete production

• Concrete production uses large amounts of raw materials, including sand, gravel and stone

• Construction also creates large amounts of waste

  • Old buildings and roads are often demolished, producing construction and demolition waste

• Old concrete can be crushed and reused as recycled aggregate

  • Recycled aggregate can replace natural stone in new concrete

    • E.g. Crushed concrete from an old road can be used in a new road

• Using recycled aggregates has several advantages

  • Reduces waste sent to landfill

  • Reduces the need for new quarrying

  • Lowers environmental damage

• Recycled aggregates are already used in some countries

  • In the UK and the Netherlands, they are common in road construction

• There are limits to recycling in concrete

  • Materials must meet quality and safety standards

  • Recycled aggregates cannot always fully replace natural materials, especially in buildings