UK asphalt market has stabilised in 2013

After a fall of around 18% in asphalt demand during 2012, the UK market is likely to stabilise during 2013. The fall in the market last year wiped out the recovery that asphalt producers had enjoyed in the previous two years.

Although the elimination of any further decline in demand is welcome, the asphalt market has performed less well in 2013 than the aggregates and ready-mix concrete sectors. Asphalt producers rely on government expenditure for much of their business and government finance remains tight. On the other hand, aggregates and concrete companies have been able to enjoy the recovery in the private housing sector in 2013. Although asphalt is used on housing estate roads, this represents a smaller part of the market than for other building materials.

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 trend for asphalt demand has been improving since the middle of 2013. The consultancy is expecting an increase in asphalt markets in both 2014 and 2015, when demand could be around 10% higher than current levels. By this time, the asphalt industry is likely to benefit from the current Government’s attempts to boost infrastructure spending.

The report identifies 7235 Lafarge Tarmac as the largest asphalt supplier with around one-third of the market. The top five companies also comprise 1707 Aggregate Industries, 1343 Hanson, 643 Cemex and 894 Breedon. 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 Lafarge Tarmac is the largest asphalt producer in eight out of the ten regions in the country, and the second largest in the remaining two regions.

Apart from the Lafarge Tarmac joint venture, the largest single ownership change during the year was the acquisition by Hanson of the 50% of 4606 Midland Quarry Products that it did not already own. There were also three other acquisitions.

The BDS report also identifies 18 asphalt plants having closed over the past year. However, the consultancy has also picked up seven consents for new plants and a further two permissions for replacement plants.

Commenting on the report, Julian Clapp said: “Investment in new plants is often in a different area to where facilities have been closed. This can create regional imbalances. Some areas will suffer from more competition whilst in other regions, there may be opportunities for the remaining suppliers where plants have closed.”

Further details of the report are available by contacting Julian Clapp at 671 BDS Marketing Research (%$Linker: 2 Email <?xml version="1.0" encoding="utf-16"?><dictionary /> 0 0 0 oLinkEmail [email protected] email: [email protected] false mailto:[email protected] true false%>) or Tel: +44 (0) 1761 433035.