Difficult times ahead for building block companies

Since its 2003 peak, the building blocks market has fallen every year with the only respite being in 2007. Last year, the building blocks market increased by 2%. However, sales began to fall at the end of 2007. Early indications in 2008 suggest a significant fall in demand in the current year, with March being a particularly disappointing month. A total of 10 building block plants have closed in recent years as the industry adjusts to lower volumes.

These are some of the conclusions of the bi-annual report on the industry published by BDS Marketing Research. The report entitled ‘Estimated outputs and shares of building block companies' finds that in recent years although the total housing output has remained fairly static, the growth of smaller dwellings has affected demand for many building materials.  Block companies have also been hit by the growth of timber frame and the development of other walling materials and systems.

The growth of flats and apartments now appears to have reached a peak. A trend back towards houses will benefit building block companies. However, current uncertainty over the housing market as a whole - a key sector for block suppliers - could affect block companies for the next 12 months.

Tarmac continues as the largest building block company, with a share of the market approaching 20%. The top five companies identified by BDS are Hanson, H&H Celcon, Cemex and Aggregate Industries, which together, are estimated to have around 60% of the market.

l Another latest report from BDS, entitled ‘The waste management market in Great Britain - its structure, markets and prospects', has found that major investment is needed in the UK waste management industry. With less than 60% of municipal waste now sent to landfill, waste management companies in the UK need to invest in alternative technologies if government targets are to be met. Just eight years ago, over 80% of municipal waste was landfilled.

Companies are already responding according to the report, which identifies over 250 companies that compost waste. Around 3 million tonnes are expected to be composted in 2008. A further 5 million tonnes of waste are now being sent to Energy from Waste plants, and up to a further 1 million tonnes to mechanical and biological treatment plants. This is out of a total annual waste market of around 180 million tonnes handled by various disposal routes.

The 150 page report assesses the current state of the industry. After an analysis of trends in waste arisings of inert, municipal, industrial, commercial and hazardous waste, the report reviews each sector that disposes of waste.

BDS estimates WRG as the largest landfill company, whilst Veolia leads in the Energy from Waste sector, SITA in composting, and Shanks in MBT. Biffa is thought to be number two in both landfill and MBT. The marketing consultancy has also identified a further nine EfW plants planned and 10 MBT plants likely to be built.

Further details of these BDS reports can be obtained by contacting Julian Clapp at BDS Marketing Research Ltd on 01761 433035