According to CW Research’s recently published “World Cement Equipment Market and Forecast Report,” the market for cement manufacturing related equipment and services is projected to reach $9 billion by 2022.
As greenfield cement plant projects remain scarce, upgrades to existing cement plants will become relatively more important; equipment relating to upgrades (i.e., excluding service-related spend) will move from representing a quarter of the total cement manufacturing equipment capital spent in 2017 to more than 40 percent by 2022.
The study also stated that “functional” equipment (i.e., conveying, automation, filtering, environmental control, etc.) will be a central growth driver of cement plant-related equipment sales over the next five years.
“Decision making for cement manufacturers is becoming more and more complex as players aim at achieving higher efficiency and reducing operating costs,” said Robert Madeira, CW Group managing director and head of research. “As a result, more technology-intensive functions such as automation, control and testing are becoming more prominent, and representing an ever-growing share of the cement plant equipment spend mix.”
With a global shortage of cement production capacity expansion projects, equipment suppliers have been facing a tough down-cyclical market. New equipment orders are relatively scarce, and competition to win orders is very high. The cost per ton of cement production capacity has continued to fall; the average price per ton of cement production capacity for a turnkey cement plant has fallen about 15 percent since 2008, according to CW Research.
Given the cement plant expansion and upgrade market dynamics, CW Research expects prices to fall an additional 5 percent. Cement plant equipment types that do not require as complex engineering or proprietary technology are expected to further commoditize and continue to face even harsher price erosion.
The expansion of the upgrade and spares segments will be underpinned by cement manufacturers’ shifting capital expenditure and strategic priorities. CW Research projects the market for upgrades and spares to amount to $3.3 billion, with China accounting for 44 percent of the market. Globally, by 2022, the upgrades and spares segments are projected to expand the fastest, reaching close to $5 billion.