North American Cement Producers to Bring Online 12 Million Tons of Annual Capacity from Projects Currently Under Construction

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Researched by Industrial Info Resources (Sugar Land, Texas)--A handful of cement-manufacturing capacity additions from both grassroot plants and existing plant expansions--some initiated more than ten years ago--are currently under construction in North America. These projects, representing 12.1 million tons per year of additional cement production capacity, are scheduled to come online within the next two years. It will be interesting to see what impact this additional capacity will have on an already stressed North American cement market, which has seen cement demand decline sharply.

American Cement Company LLC (Sumterville, Florida), a joint venture between Oldcastle Materials Incorporated (Washington, D.C.) and Trap Rock Industries Incorporated (Kingston, New Jersey), is nearing operational start-up of a new $125 million cement manufacturing plant in Sumterville, Florida. The company is projecting a start-up between April 1 and May 1, 2009. The project, which has been under construction for two years, will mark the first new U.S. cement plant to begin operation in 2009.

The American Cement project is one of ten major cement plant expansions or grassroot plants representing close to $2.7 billion currently under construction in North America. Holcim (US) Incorporated is scheduled to wrap up construction on a $1.2 billion grassroot cement plant and harbor in Missouri late in 2009. However, don't be surprised if Holcim delays the start-up until 2010 when the market is expected to recover. Holcim announced closures of two plants in Michigan and Missouri after a significant drop in demand in late 2008.

According to the U.S. Geological Survey, consumption of cement was down 15% in 2008, mainly because of a two-year slowdown in residential construction. The majority of that decline was absorbed by a 45% reduction in imports, which declined from 21.4 million tons in 2007 to 11 million tons in 2008. That trend is continuing in 2009. Cement companies have cut back production and closed older non-efficient plants.

Some projects, such as the new Sumter Cement Company plant in Florida, have also been postponed because of market conditions. (For details see related November 19, 2008 news article - Sumter Cement Company Postpones Construction of Center Hill Plant.)

Other companies with major projects under construction include Essroc Cement Corporation, Drake Cement LLC, Florida Rock Industries Incorporated, and Buzzi Unicem USA Midwest Division.

In addition to these major projects, there are 156 active projects at cement manufacturing plants in North America. These projects represent more than $5 billion in capital and maintenance spending for the industry.

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