Global Market Study on Construction Aggregates: Infrastructure Development Investments Creating Opportunities


Global Construction Aggregates  Market
  • Published On : Jul-2019 |
  • Pages : 257 Pages |
  • Format :

Construction Aggregates Touted as the Future of Building Materials

As the gap between the demand and supply of natural sand remains unbridged, construction aggregates emerge as a viable solution to address the towering infrastructural requisites. With grave concerns apropos of natural resource depletion, construction aggregates have, and will persist as building blocks for the industrial, commercial, infrastructural, and residential development projects. Governments’ interest in housing projects and flourishing travel & tourism activities are likely to move the adoption scale of construction aggregates to a higher value.

Foreseeing the unbalanced account of demand-supply ratio with the surging construction activities, manufacturers resort to recycling for achieving channelized supply and, in turn, eliminate disposal issues. With the degree of competition intensity rising by a notch on a frequent basis, manufacturers rely on two concrete strategies for their business growth –

  • Partnering with governments for long-term contracts
  • Raising the quality gradient to increase the life expectancy of buildings

Sensing the scramble of construction aggregates market towards a higher billion dollar value with intense competition present in the landscape, Persistence Market Research (PMR), in its latest report, evaluates latent dynamics that remain influential in tracing the growth prospects. With the information covered in the report, stakeholders can get a glance of the existing as well as emerging opportunities to brick up their position in the construction aggregates market.

construction aggregates market strategy

Analysing the Maturity of the Construction Aggregates Landscape

The construction aggregates landscape continues to grow amidst the transmutation in the production process, degree of quality, and product types. As governments’ initiatives to steer the wheels of economic developments channel more funding into the transportation sector, road construction activities are likely to intensify. In 2018, construction aggregates registered a volume sales of ~47 Bn Tons, which corresponds to a value of ~US$ 300 Bn and is anticipated to draw more gains, considering the evolutionary nature of the landscape.

Constructors gravitate away from the massive and weighty construction aggregates to light and durable ones, owing to their quality as well as ease of transportation. In addition, customization acquires a distinguished place in the product portfolio of manufacturers, as a single size or shape does not suit the end-use applications well.

With innovation making inroads in the landscape, manufacturers employ advanced manufacturing equipment to meet the desired productivity and quality of construction aggregates, which further boosts their supply capability. However, as construction activities are adversely affected during rainy and winter seasons, demand for aggregates is likely to spectate seasonal spikes.

Construction Aggregates – Feasible Building Blocks for Future Infrastructure

As digital sales channels surface, manufacturers expend in eCommerce portals to extend the reach of their products and have better chances at sales closure. Urbanization engendering industrialization have been collectively adding new dimensions to the adoption trends of construction aggregates.

Government initiatives towards the development and renovation of robust rail, road, and housing infrastructures have been boosting the adoption of construction aggregates. Beside infrastructure, the scope of construction aggregates has been broadening in residential projects, as financial lucidity of urban consumers offers them a leeway to invest in sophisticated homes.

For the construction activities, contractors prefer crushed stone over other product types, which accounts for ~48% of total sales. However, cost-effective manufactured sand has been witnessing significant traction, as natural sand presents low supply-to-demand ratio, making it a premium commodity.

‘Recycling’ is likely to remain a significant trend in the U.S. and Canada as compared to the developing countries, owing to the infiltration of technologically advanced equipment. However, the growth of the construction aggregates market in the developing countries will remain incremental with high population density upholding the demand for residents.

China remains a key consumer of the construction aggregates during the forecast period, as the government executes the 13th five-year plan, wherein a high investment is anticipated for the development of road and rail infrastructures. The infrastructural growth in China also reflects upon India, which is likely to remain the fastest growing construction aggregates market.

construction aggregates market china

A Roadmap to Business Growth in the Construction Aggregates Landscape

Prioritizing Long-term Contracts with Governments

Since robust infrastructure is a reflection of a healthy economy, governments of numerous countries announce the construction operations to expand or renovate their rail, road, and air networks. Project initiatives such as Five-year plans and Smart Cities mission offer long-term supply opportunities to the construction aggregates manufacturers.

Manufacturers can leverage these long-term contracts to build a continuous revenue stream for their business, rather than prioritizing on several penny ante deals. Additionally, government investments in housing projects to accommodate the growing urban population is likely to be a crucial revenue-generating opportunity.

Emphasizing ‘Lightweight’ and ‘Durable’ Portfolio

Transportation cost accounts for ~50% of the total construction aggregates cost, which takes a heavy toll on the wallets of contractors. This leaves manufacturers with two options – either foster product innovation or partner with logistics companies. However, the development of lightweight construction aggregates remain crucial to control the shipping cost from outweighing the production cost.

Manufacturers can capitalize on the development of lightweight and durable products with an enhanced focus on the quality quo, which will serve as an instrumental to control cost and diversify their product portfolio.

Erecting Recycling Facilities to Reduce Operational Costs

As disposal concerns of construction aggregates remain in the radar of regulatory bodies, manufacturers are found investing in recycling facilities. Recycling of construction aggregates, in turn, protects natural resources and reduces operational costs. On similar lines, innovation in the recycling equipment offers the ease of operation to manufacturers, which has caused a paradigm shift in the production patterns of construction aggregates.

Construction Aggregates Market - Under the Degree of Fragmentation

Construction aggregates are low-value, high-volume commodity, which broaden the market entrance for new players. The construction aggregates landscape remains highly competitive, characterized by numerous players serving the global, regional, and local market. The key players that operate at the international level and account for ~8% of the market share include:

  • Heidelberg Cement AG
  • Martin Marietta Materials Inc.
  • LSR Group
  • LafargeHolcim Ltd
  • Cemex Sab de CV ADR
  • Vulcan Materials Company
  • CRH PLC

The frontrunners fuel their way towards business expansion by emphasizing on the adoption of regional and local players to venture into the untrodden market. In addition, focus on enhancing their production capacity and channelizing sales through streamlined distribution network equally equip these players the required momentum to move towards higher market shares. For instance, in 2017, Heidelberg Cement AG acquired Cemex’s business to cater to the demand of the North American market. However, strategies of regional players are in stark contrast to that of their global contenders.

The regional players battle it out in the construction aggregates market with ‘cost-efficiency’ being the key weapon. They also focus on modernizing their production facility to meet the evolving as well as specific demands of contractors. For instance, Rogers Group Inc. focuses on offering cost-efficient and recyclable construction aggregates to underpin the construction activities of highways and roads to acquire a distinguished position in the North American market.

construction aggregates market segmentation

Analysts’ Viewpoint

The author(s) of the report ticks the prospects of the construction aggregates market as propitious, with a steady CAGR of ~6% during the forecast period. China will remain a key market for investment, owing to the high demand for sophisticated infrastructure. Government initiatives towards accommodating new urban entrants will offer lucrative as well as long-term growth opportunities to market players. An investment in crushed stone is likely to remain profitable as contractors find its applications in multiple construction activities.

As transportation cost makes the overall cost of construction aggregates unattractive for the construction companies, manufacturers can broaden their lightweight and durable portfolio. In addition, partnerships with logistic companies can also aid in reducing the stress associated with the transportation cost. Regional players aim at going big with customization being their key winning imperative, while global players hold on to acquisition and merger activities to boost their presence at a multi-regional level.

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Preview Analysis

The report incorporates comprehensive data about the volume (Tons), value (US$ Mn), market trends, forecasts, market dynamics, competition landscape, and ongoing trends & developments in the global construction aggregates market for the study period 2019 to 2029.

The global construction aggregates market is estimated to be valued at US$ 331 Bn by the end of 2019, and is expected to reach US$ 622 Bn by the end of 2029, growing at a CAGR of over 6% during the forecast period. The global construction aggregates market is expected to represent an incremental opportunity of ~US$ 291 Bn between 2019 and 2029.

Construction Aggregates Market: Introduction

Construction aggregates are small-sized granular particles, such as sand, stone, etc., which have a wide variety of applications such as concrete and paving blocks for driveways, sidewalks, patios, office buildings, homes, and paved roads, either as a base or sub-base material, in the construction of buildings. They are used in the manufacturing of cement and concrete for road construction, etc. Construction Aggregates are one of the highest mined materials in the world.

Construction Aggregates Market to Witness Significant Growth over the Forecast Period

The expansion of road, rail, and air infrastructure is estimated to create demand for construction aggregates over the forecast period. Likewise, growing investments in the residential market is also expected to create significant opportunities for the growth of construction aggregates. Thus, the increasing consumption of construction aggregates can be attributed to the growing construction industry across the globe. The demand for construction aggregates is expected to remain dominant as they increase the life span of constructed structures. Moreover, the growing residential and non-residential industry is expected to create numerous growth opportunities for the manufacturers of construction aggregates. Housing recovery and increasing demand is estimated to drive the residential construction sector, which is, in turn, boosting the demand of construction aggregates.

The construction aggregates market has witnessed consistent growth over the years. This can be attributed to favorable economic conditions in numerous countries. The construction industry is anticipated to witness acceleration due to large public infrastructural programs, which is expected to create opportunities for public-private partnerships.

Increasing infrastructure investments in Asia Pacific, America, and the Middle East boosting the Demand for Construction Aggregates

From a regional perspective, China and the rest of APAC are estimated to hold a prominent share in the global market. Latin America and Middle East are turning into lucrative regions for the manufacturers of construction aggregates. China is expected to lead the global demand for construction aggregates owing to a significant rise in the number of manufacturers with considerable production capacities in the past few years. Moreover, growth in non-residential infrastructure is expected to boost the demand for construction aggregates. Governments of major economies are focusing on the development of transportation facilities and strengthening their energy (power generation) infrastructure.

Increasing Spending on Public Infrastructure Expected to Ramp-Up the Construction Aggregates Market

Office construction is anticipated to witness significant growth over the forecast period, which can be attributed to an increase in employment, especially in the high-tech jobs market. This is estimated to increase the demand for construction materials for constructing office spaces. Moreover, an anticipated increase in healthcare expenditure is expected to fuel the renovation of healthcare facilities, which is likely to drive the demand for construction aggregates over the forecast period. Spending on schools and educational institutions is also anticipated to increase to equip schools with modern technologies and create a collaborative environment for students, which is likely to be another factor driving the construction aggregates market over the forecast period.

Stringent Zoning Regulations on The Extraction of Aggregates, Coupled with rising Energy Costs in Populated Areas

Securing permission for mining involves adhering to environmental laws, land development laws, and zoning laws, among others. Moreover, restrictions on the development of new mining sites in certain countries have been implemented over the recent past. Construction aggregates manufacturing companies are adversely affected by rising energy costs. For instance, to mine and produce aggregates, companies require fuels such as natural gas, diesel, petroleum coke, and coal. Increase in the fuel cost is likely to adversely impact the production of construction aggregates. In addition, irrespective of whether aggregates are transported by rail, truck, or barge, an increase in energy prices can lead to an increase in the cost of shipments.

Key Questions Answered in the Report

  • How has the construction aggregates market evolved in the past four years?
  • What shape is the construction aggregates market expected to take in terms of volume and value during the study period?
  • What are the key dynamics of the construction aggregates market?
  • What are some of the primary macroeconomic and industry factors that are impacting the growth of the construction aggregates market?
  • What are the important key challenges, opportunities, and improvement factors for market players?
  • What are the important market positioning and key strategies of major manufacturers for the construction aggregates market as per the market taxonomy?
  • What is the construction aggregates consumption scenario of the global construction aggregates market in terms of value and volume?

Construction Aggregates Market – Opportunity Assessment

Persistence Market Research (PMR), in its latest study, identifies significant growth opportunities in the construction aggregates market for the forecast period 2019-2029. The research report outlines the crucial trends and key developments taking place in the construction aggregates landscape. In addition to this, it provides actionable insights into the construction aggregates market by analysing the key drivers, restraints, threats, and opportunities.

This comprehensive study offers an assessment of demand and supply chain, which lends an incisive view regarding the balance of demand-supply in the construction aggregates market. The research report studies the macroeconomic as well as microeconomic factors that aid in comprehending the growth prospects of the construction aggregates market during the forecast period.

The market size has been evaluated in terms of value (US$ Mn) and volume (Million Tons). The insights covered in the report will help the stakeholders of the construction aggregates market identify key opportunities for their business advancement. This in-depth study profiles leading and key players functioning in the construction aggregates market.

The exclusive report offers a detailed overview of the market players, along with their key strategies, financials, and recent developments. This will help the stakeholders shift their strategy gears to accelerate their business pace in the direction of growth.

Construction Aggregates Market – Segmentation

The detailed study on the construction aggregates market offers a comprehensive analysis of the market attractiveness with the help of segmentation. The construction aggregates market has been bifurcated on the basis of application, product, and region. The research report also encompasses a country-wise assessment in order to comprehend the demand and supply of the construction aggregates market.

Each of these segments has been studied in detail to obtain crucial insights into the construction aggregates market. The study on the construction aggregates market offers historical and current trends influencing the growth prospects in each segment. In addition to this, it covers value chain analysis, Y-o-Y growth analysis, and supply chain analysis.

Application

Type

Region

Commercial

Crushed Stone

North & Central America

Residential

Sand

South America

Industrial

Gravel

India

Infrastructure

Others

China

ANZ

Middle East

Africa

Rest of APAC

Northern Europe

Southern & Western Europe

CIS & Eastern Europe

Key Questions Answered in the Construction Aggregates Market Report

The study on the construction aggregates market encapsulates an outline tracing the growth prospects for the given forecast period. The study provides salient answers to the key questions concerning the stakeholders of the market. The authors of the report address these key questions for the stakeholders to have a clear view of the construction aggregates market during the forecast period. Some of the key questions answered in the report include:

  • What is the construction aggregates consumption scenario in terms of value and volume?
  • What are the relevant drivers impacting the growth of the construction aggregates market?
  • How will the construction aggregates market evolve during the forecast period?
  • What are the key challenges and threats restraining the growth of the construction aggregates market?
  • What are the macroeconomic factors that are impacting the growth of the construction aggregates market?
  • Which application will remain the key contributor in terms of value and volume?

Construction Aggregates Market – Research Methodology

For the compilation of this report, a systematic research methodology has been employed, which consists of primary as well as secondary research. In order to conduct primary research, key opinion leaders, industry experts, manufacturers, distributors, and business heads were interviewed. In order to conduct secondary research, company annual reports, SEC Fillings and Press Releases, Government Websites, Factiva, MorningStar, Regional Regulatory Council Guidelines, and Official Publications from International Trade Council were referred. Our analysts also use a bottom-up and top-down approach in order to arrive at the market numbers and validate insights.

Company Profiles

  • HeidelbergCement AG 
  • Martin Marietta Materials Inc. 
  • LSR Group 
  • LafargeHolcim Ltd 
  • Cemex SAB de CV ADR 
  • Vulcan Materials Company 
  • CRH plc 
  • Adelaide Brighton Ltd 
  • Eurocement Group 
  • ROGERS GROUP INC. 
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