Changes in the U.S. Cement Consumption Slow Manufacturing Expansion Trend

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). Cement consumption in the United States peaked in 2001 at around 112 million metric tons. Since that time, a series of economic factors caused a slowdown in cement consumption growth, resulting in a decrease in consumption in 2002 to 110 million metric tons, followed in 2003 by an increase back to 2001 levels at 112 million metric tons. This marked quite a turnaround for the cement industry, which in the six-year period prior to 2001 had grown by 3-5% every year.

Another interesting trend, as of late, is that imports of cement into the U.S. have decreased also, and in 2003 accounted for about 20% of U.S. consumption. Imports still make up a large percentage of the cement consumed in the U.S.; however, the overall percentage of imports is down from 25% five years ago. Part of this decrease in imported cement can be attributed to capacity increases made by U.S. cement manufacturers during the last five years.

During the period of steady consumption growth, prior to 2001, U.S. cement producers experienced an unprecedented era of expansion. As a result, U.S. cement production has grown by 5.8 percent over the past five years up to 91 million metric tons per year.

Almost every cement producer in the U.S entertained some sort of expansion plans. On September 18, 2001, Industrialinfo.com (Industrial Information Resources Inc.; Houston, Texas) reported in an IIR Industry Alert titled, US Cement Industry Experiences Healthy Growth in Expansion Activity that it had identified 19.3 million tons per year of new U.S. cement manufacturing capacity expected to come online in the next 2 to 4 years. At that time, about 6.4 million tons per year of this new capacity was already under construction and the remaining 12.9 million tons per year was in the planning and engineering stage.

Since that time several projects have been deferred or canceled. One of those projects, Ash Grove Cement's 1.2 million ton per year expansion (PEC 20000517) for its Foreman, Arkansas plant (Plant 1038767) has been put on indefinite hold. Several of these projects have been held up due to the permitting process. This includes Holcim's mammoth 4.4 million ton Missouri project and Saint Lawrence Cement's two million ton Hudson, New York plant.

Currently, we are tracking 10.85 million tons per year of cement capacity expansions, including 800,000 tons under construction. This includes Dragon Products Company Incorporated (Portland, Maine) $50 million expansion and modernization (PEC 37000252) of the company's cement plant located in Thomaston, Maine (Plant 1017726). The remaining 10.05 million tons per year of capacity is in the form of seven separate projects in the planning stages.

Even though, larger plant expansions and additions are not as prevalent as in previous years, the industry is spending significant amount on maintenance, small manufacturing upgrades, and environmental compliance issues. In fact in 2003, Industrialinfo.com reported on 110 capital and maintenance projects, representing over $2 billion in TIV (Total Investment Value) at U.S. cement plants. The accompanying pie chart shows the
distribution of projects in regards to their PEC (Planning, Engineering, and Construction) timing.

Click on the image at right to view the 2004 U.S. Cement Plant Projects by PEC Timing Pie Chart.

For details on these projects call Industrialinfo.com's Member Center at 1-800-762-3361