UK asphalt market showing signs of recovery

Recovery in the UK asphalt market from the middle of 2013 has continued into the current year, according to a report carried out by BDS Marketing.

Demand for asphalt last year showed a slight decline but could be higher by 5% in 2014.

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’.

Commenting on the report, Julian Clapp said: “Comparisons in the first half of 2014 with the previous year are with very poor demand in 2013. For the rest of 2014, the asphalt market will struggle to match the buoyant demand of the same period last year, but overall, 2014 demand will be higher than 2013.”

BDS expects further growth in each of the next two years. However, it does not expect the industry to recover all of the 18% drop in the market that occurred in 2012.

Infrastructure spending is set to increase. This includes more road schemes expected to start. However, other infrastructure sectors such as power stations and environmental schemes will have limited impact on asphalt producers.

The report identifies Lafarge Tarmac as the largest asphalt supplier with around one third of the market. The top five companies also comprise Aggregate Industries, Hanson, Cemex and 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 the typical ranking of companies at a regional level shows that Lafarge Tarmac is the largest asphalt producer in most regions. Aggregate Industries is usually the second largest company in each region.

In its latest report, the consultancy has identified five plants that have closed, all previously operated by the majors. This has been balanced by three new plants, two of which are high volume plants. These plants are operated by independent companies.

“The net result is that industry capacity has increased slightly. There has also been a small but noticeable shift towards the smaller companies,” adds Clapp.

Further details of the report are available by contacting Julian Clapp at julian.clapp@bdsmarketing.co.uk

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