UK aggregates markets going into reverse

Despite a slight improvement in 2010 and 2011, UK aggregates markets are going lower in the current year. Last year, the production of sand and gravel and crushed rock was around 160 million tonnes. In 2012, production is likely to fall to around 145 million tonnes. This is a level not seen since the early 1960's. Industry marketing consultant, BDS Marketing Research Ltd, reckons this is just half that the market achieved at the height of the boom in 1989.

Whilst it had been forecast that public sector demand would fall, the private sector has not taken up the slack. Aggregates companies have been affected in 2012 by lower consumer confidence in the housing market, and developers unwilling to start speculative projects due to the economic situation.

These are some of the conclusions of the annual BDS Marketing Research Ltd report entitled: 'Estimated outputs of pits, quarries and marine wharves in Great Britain'. This shows company market shares at a local, regional and national basis. As well as market shares, the report lists sites that have opened or closed and changes in company ownership. It also includes an independent three year forecast for the industry. The survey is used by existing companies to compare their market share with their competitors, equipment suppliers and others considering investment in the industry.

Markets remain patchy. Sand and gravel demand in the south east has been rising, due to increased markets for ready mixed concrete. However, crushed rock producers in Scotland have faced a difficult time, with 2011 volumes much lower than the previous year.

BDS expects the aggregates market to go lower by around 10% during 2012. It is forecasting a bottoming out of volumes in 2013, with some hesitant recovery in the second half of next year.

Tarmac has maintained its position as the leading aggregates producer in Great Britain. BDS estimates the Tarmac national share currently at around 20%. The top five companies are completed by Aggregate Industries, Hanson, Cemex and Lafarge. Together, the consultancy estimates that these companies represent around 70% of production.

The current supply situation will change when the proposed joint venture is formed between Tarmac and Lafarge. A total of seven aggregates sites need to be disposed of to meet the requirements of competition authorities, together with Tarmac's interest in Midland Quarry Products Ltd.

BDS has identified 10 quarries have been acquired over the past year. In addition, it lists 44 quarries that have closed. When the recession first started, it was the major companies that shut operations. More recently, BDS has identified that it is primarily the smaller companies that have been closing quarries.

Further details of the report entitled: 'Estimated outputs of pits, quarries and marine wharves in Great Britain' are available by contacting Julian Clapp at BDS on (01761) 433035 or email julian.clapp@bdsmarketing.co.uk or www.bdsmarketing.co.uk

The report on quarry outputs has been published at the same time as equivalent reports on ready mixed concrete, asphalt and concrete products.

BDS also prepares market surveys and reports for individual clients in these sectors, which can include customer research, new product development, company profiles and acquisition appraisals, and analysis of markets and prices.