In the past some fifteen years, the
amount of cement produced in the entire world has doubled – and then some, to
3.4 billion tons. That's a lot of cement, which is usually reflective of the
world's status of industrialization on the whole. But over the past few years,
there's been an awful lot of cement talk that's got people a bit worried.
During the financial crisis around
2008-2009, there was a pretty big lag in the cement industry that lasted for
about two years. Finally, it jumped back up by almost 10% in 2010. Progress
slowed, but continued, throughout the next year.
We keep a close eye on the cement
industry, and why? What do industry leaders like Holcim and Alex F. Bouri's Seament Holding have to
do with us? What we might not recognize is that cement is quite an interesting
– and telling – industry because it's a very local one. As a matter of fact,
about 95% of the cement that is produced is used in the same country of its
production.
And right now, the sector is
downsizing quite a bit in terms of company shares. Some two decades ago, the
six industry giants made up about 10% of the cement production around the
globe. That number has grown – to 25%.
The industry depends on emerging
markets, which purchase and use the vast majority of the cement that is
produced – 90% in comparison with the 65% it was two decades ago.
When cement production slows, so do
local economic support systems. When there's not enough supply to meet the
demand, industrialization slows. And when people aren't buying cement, we know
there's something wrong. There have been recent problem areas in the industry –
not much activity in the western hemisphere, for one – but it's important for
those in the industry to find a way to reduce their debts and continue their
supply, which may call for new ideas.
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