An attempt to analyze and characterize the white cement market in Poland

Two things can be said about the white cement market in Poland: it is, and nothing is known about it. It is - because white cement is sold and present on the market. And little is known about it (the market) - in fact, the structure and sales logistics almost makes it impossible to accurately identify the market and shares of individual producers or individual brands.

Historical view

At the beginning of the 1990s, there was basically one white cement producer on the Polish market - Wejherowo cement plant. System transformation meant changes, unfortunately in principle in the production system. Too little production, not very effective logistics, lack of continuity of supply automatically gave birth to a place for imports of cement from abroad. Quite quickly in Poland appeared two manufacturers. CRH (then: Holcim, called circularly because of the place of production - cement plant Rohoznik - "Slovak") and Aalborg White (the name is still unchanged, production of Aalborg Portland, analogically "Dane"). Due to logistics, the producers will initially divide the market geographically - the Slovaks were much stronger in the south, the Danes - in the north. Transport costs (Aalborg's base was then near Szczecin) determined the profitability of sales. Of course there were exceptions, but they confirmed the rule..

Until the 1990s and 2000s, Wejherowo Cement Plant could not stand the competition and disappeared from the market. For the next few years, the "status quo" or geographic division was preserved. The beginning of the 21st century is a sharp and rapid development of the market, often referred to as "construction chemistry", ie various types of finished adhesives, mortars, plasters etc. Often, large manufacturers moved their production from abroad to Poland. This meant a surge in demand for cement, including white. If you add to this building boom (which lasted roughly until 2007 - 2008), including a sharp increase in the production of concrete products (so called paving stones), it is clear how much demand was for cement. The stadium construction program and other powerful investments have only supported this rapid growth. The large gap in the production capacity of the cement plants in Rohoznik and Aalborg (ca. 200 thousand tons vs. 800 thousand tons) and the opening of the Slovak producer to the European markets, much more stable and less independent of the random factors caused the continuity of deliveries and consequently mastered the market and the domination of Aalborg White cement on it. Although it is a fact, it looks completely different than the official figures available from general representatives say.

In Europe, almost every country is either a producer of white cement (eg Belgium, Great Britain, Greece, Bulgaria, Italy, etc.) or such cement is sold through the network of some of the major companies operating in Europe (f.ex. Heidelberg , Cemex). Sometimes, to darken the situation - due to local conditions - the cement of another concern is sold through the network of one of the corporations (Norway, Sweden cement plants belong to Heidelberg, white cement - Aalborg White, Great Britain: Hansen - cement Aalborg White, Het - Czech Republic - in depending on the type of cement either Aalborg or CRH).

Just add that there are also traders sometimes sell under their own brand, sometimes under the brand name of the manufacturer, different types of cement (eg Schmidt Cement sells cement from the German manufacturer and probably all Polish cement plants on the Polish and German markets).

In the last few years there have been changes in ownership as a result of which Aalborg became part of the Cementir concern, while Holcim (white cement) - part of CRH (and changed the brand to CRH precisely), and Holcim (a producer of gray cement) fell to Lafarge, which changed its name on LafargeHolcim.

Cemex appeared about 3 or 4 years ago. It is a group with two gray cement plants and one milling plant in Poland. It also has its own stationary and mobile concrete mixing nodes, and a sales network based on large building composition networks (PSB, Mrowka) and smaller independent warehouses. The clinker from which the cement is made comes from the Spanish cement plant.

CBR, presently belonging to Heidelberg, is present on fairly similar market conditions.

Numbers

There are no exact figures for white cement covering honest and accurate sales levels. This is due to a simple reason: every producer has its distribution channels, its rules and policy towards the largest recipients. Theoretically, in the worldwide, European-wide studies, the cement market, its capacity, is estimated at ca. 170 thousand tons, the problem is that they can be understated or overstated by thick percentages, even over 10%. Nobody knows that.

Only more are the numbers for the sale of two distributors: Aalborg White and CRH. More are sure about cemented baggage, less certain cement in bulk

Sale of cement in the bag (through Polish branches) is ca. 6,000 to 7,000 tons, of which around 2/3 are for the Dane, the rest for the Slovak cement. Assuming that the sale of cement so-called. "bulk" is higher around 4 times, and the share is similar, sales are at the level of about 16 and 8 thousand tons. All other figures are estimates and are subject to high risk of error.

Aalborg White

Danish manufacturer, offering on the Polish market type 52.5 IR bagged and loose. Has an official representation in Warsaw, logistics warehouse in Gdynia

Estimated sale of cement workowner is ca. 4,000 – 5,000 tons, bulk, as already mentioned 16,000 tons. And that's how much you know. The rest are speculations

Formally, there is no possibility of buying cement outside the head office, but it is known that there are foreign companies operating in Poland (eg Caparol, Baumit and others) that can do so. It is an open question whether the extent to which purchases and price negotiations take place through a central office (eg in Germany) negotiating prices for themselves at the head office of the cement producer. The numbers that can be found on the website of the owner of Aalborg - the Cementir concern - which are published on its websites can testify to the fact that this is the case. As a listed company, it is required to publish accounting data. They show that sales for Denmark (of around 5-6 million inhabitants) is almost twice as high as in the Norwegian and Swedish markets (also dominated entirely by this producer). The total population of Norway and Sweden is approx. 2 times higher than Denmark, and sales are 2 times smaller. This means that from the figure for Denmark, in fact, this country is more or less 1/4 - 1/3 sales level.

CRH

Cement plant in Rohoznik, with production capacities of about 200,000 tons. It has his representation in Poland. Cement types: Cem 52,5 IN and Cem 52,5 IR Theoretically, it is "general" but practically it is not a problem to buy cement directly in the cement plant, the more so because it is not far from southern Poland. The minimum logistic issue. The rest of the reservations are adequate as in the case of Aalborg White, but because of the much easier purchase directly at the headquarters in Slovakia, sales volumes may be underestimated rather than overestimated. It is generally accepted that market share is half the share that Aalborg has at its disposal.

In a separate section will explain why the shares change and are liquid, depending sometimes on minor changes in the price level.

Cemex

A giant corporation that produces white cement in Spain, in Poland only bagged or even ground. In this case, all estimates are subject to a huge margin of error.

Cemex is basically sold only in building construction, as an addition to the offer of other building materials. Logistics is the same as the whole range of gray cement. The largest chains in which the sale takes place are those owned by PSB (PSB, Mrówka). Due to the fact that the warehouses have partial autonomy in the network, that is, they may or may not, and it also applies to white cement, this means that in some warehouses Aalborg may be present and sold, in other CRH, and still other Cemex. To this must be added the fact that there are a large number of medium-sized warehouses having several branches, buying gray Cemex cements and on the occasion of ordering white cement. It is impossible to estimate the sales volume. There are stores that buy by all-truck, and there are also those that buy one or two pallets once a quarter in the season.

Assuming that Cemex is sold in 500 warehouses throughout the country, assuming that the average level of sales during the year is 5 tons - the total sale will be 2.5 thousand tons, however if you assume that the average composition sells 1.0 tons per month, The level will reach 6.0 thousand tons.

Cemex as a giant corporation also has its own network of concreting plants, not only stationary but mobile. It produces all sorts of blends and concrete. The level of white cement consumption can not be estimated. Even in the outline. Cement is used, but it is formally a displacement within the group. Taking this into account, looking at the amount of construction investments, as well as "ordinary" buyers, it may turn out that Cemx's real market share is much higher than CRH.

CBR

Owner of Heidelberg, location Belgium. In principle, apart from CEM II 42,5 LL cement in commercial networks does not exist. On the other hand, a certain amount of this cement can be marketed on a similar basis to what Cemex uses its white cement in concreting. Heidelberg has 52.5 IR grade cement. It produces CBR and this type of cement is very much present on the market of our southern neighbors. Is it possible to import such cement and its use on the Polish market? Yes. Is it possible to estimate its share in the Polish market at the moment? No.

Other manufacturers

They are for sure. How - nobody knows. They are present and operating on the so-called market. traders - they import cement from other countries to Poland. One of them is importing cement from Schrenk cement plant (Germany). Of course they can offer and offer to potential customers white cement. How much - I do not know anyone. They hold a maximum of a few percent share in the white cement market.

You can assume with a fairly high probability and a fairly large error limit that the real shares in the white cement market (bagged and bulk total), with the above assumptions, limitations and doubts, are more or less the following: Cemex: approx. 30%, CRH 25 - 30% , Aalborg: ca. 40%. Approximately 5% is for CBR and cements imported from abroad

Cheap and well, that is, the cement is to be white

The Polish building materials market is subject to specific rules. It is a market that can be described as "cheap and good". It also addresses the main buyers of white cement, whose purchases can cover up to 90 percent of the market. These include in the first regard:

• manufacturers of concrete products such as cobblestones, decorative concrete elements, etc
  
• manufacturers of various dry plaster mixes, masonry as well as construction chemicals
  

Due to the specificity of the production of vibropressed elements, white cement is used to obtain attractive colors of the top layer of the element. The manufacturers themselves on the information included in the individual batch emphasize two very important things: that discoloration is not a physical defect of the product and can not be the cause of the complaint, the other is that the differences in the shades of the individual batch are not unusual and also not the basis complaint.

These differences between individual production sites belonging to one owner are significant. Cement plants of different manufacturers have been used for a long time, with different milling, watering and certain parameters. The basic determinant is the price. Application is cheaper. The same principle applies also for the purchase of white cement. Every major seller has his share of the purchases usually resulting from the supplier's logistic capabilities, continuity and quantity. When shopping at the level of thousands of tons a year, the likely price differences are small. This is a protection against the monopoly position of the supplier on the one hand, and on the other hand shows how small the impact of the given cement brand on the end product. Of course, besides color. Must be white.

Organizing the supply chain also makes it impossible to accurately determine the contribution of the manufacturer. Just shortages at one can be complemented by the other, the same level of sales is changing, only the overall volume of purchases remains constant, without dividing the individual producers.

A large or very large water dispensing range is a characteristic feature in the descriptions and usage of dry blends (adhesives, plasters, construction chemicals). This allows us to assume that also in this case cements of different manufacturers are used which are characterized by different parameters. The comparison with the same mixtures (the same designation) produced in Germany (the manufacturer's headquarters) shows this very clearly. It is common for distributors to declare that the quality of manufactured products decreases with the transfer of production to Poland. This gives rise to the assumption bordering on certainty that there are different suppliers of cement, including white.

For the above mentioned comments, add the aforementioned fact that the supply of white cement may take place through the headquarters outside of Poland, directly negotiating the purchase of the whole group, including for the Polish branch. Formally sale of such cement is added to the sale of the corresponding Danish, Slovak, Spanish headquarters or eg the German representative of the manufacturer.

It would seem that such large changes in cement quality (parameters are very different: grinding affects opening time, chemical susceptibility, behavior, hydration heat and so on) can be a big problem. Explain why that is not the case in the gray cement market. Changes in color (and consequently milling, size of cement grains, their shape) are the norm. Different quality of dusts and ashes used as an additive for cements - similarly. The most important parameter that a given cement has to meet is the strength, with most other manufacturers somehow can handle it. This "somehow" is expressed in a wide range of water dispensing into blends.

Concrete rady-made

In the last decade, probably only twice the demand for gray cement was close to its supply: for the first time it occurred at the top of the construction boom from the first decade of 2000s, the second time occurred in 2017. A closer look reveals the difference: both individual investments (including the production of pavements, plasters, etc.), currently applies to state and local government investments, ie large construction (eg road S7 in the area of Kielce, "Zakopianka" near Lubnia with a full system of bridges, viaducts, tunnels) change in the way developers build. The last decade ago, most often they built a method resembling the so-called "Rama H", now more often, three forth or more building structures, is a concrete monolith. Part of the concrete plant uses various cements (producers), sometimes the official supplier is one producer - and that means that also white cement is provided by the same company. Sometimes the latter boast about their most important investments in the network - for example, Cemex made the stadium in Gdansk (twitter). This again means that thousands of tons of cement are sold outside the official sales networks, entering the results of one group

Such investments are characterized by what can be called a one-off - that is, the capacity of the market grows rapidly and rapidly for two years in a row (eg several thousand tons at a market capitalization of 170,000 tons, a few percent) . Considering the fact that several stadiums were built for several years, hundreds of kilometers of roads and other infrastructure related to them could mean major turmoil and fluctuations in sales

Architectural concrete

Recently, what is more and more fashionable is what is commonly called architectural concrete, and it really covers everything from figures, through prefabricated elements to elements made for individual orders. In the last few years on the retail market, the latter group of producers grew very strongly, constantly increasing the demand for cement. Despite the fact that many smaller producers went bankrupt or changed the production profile, the market was growing all the time. Sometimes, overall sales y / y were able to increase almost twice. Unfortunately, he was touched by what can be called "and me too".

Due to much higher profits with fewer work inputs, many producers of ready-mixed concrete or pavements decided to either invest in separate production lines, or commission a concrete architectural sub-commissioning, and the main criterion was, as usual, the price .. Unfortunately, the quality of these products was, to be fairly speaking, very different . More and more often you can hear voices among investors sometimes of general contractors that they do not want to have anything to do with such products. Increasingly, producers are opening for export, but some decline and stagnation is felt and recorded.

Summary

1. Despite the theoretical capacity given, real sales really can not say much, more - the numbers that are real available do not say anything. Official data provided by general representatives, companies like "Producer Poland", say not about real sales, but about the one that goes "through" their hands. At the same time, at least two of them (Cemex, Heidelberg) sell cement only and exclusively through their own distribution channels (retail and wholesale), which can not be estimated from the outside. It is impossible to say anything about intra-brand consumption. You can assume that in fact their share is much larger than you would suppose after scraping data about the so-called. wholesale purchases by cube manufacturers. You can only estimate the reciprocal participation of Aalborg White and CRH

2. The market is relatively small "fixed" capacity, further limited by cost cutting (that is, the use of bright gray titanium dioxide cement), increased by "shares", especially large investments. It is difficult to meet any assessment to estimate the real size of a fixed market and ways to increase its fixed capacity, to make it impossible for large investments to be treated as a one-off sale, despite the fact that it has been implemented for several years. If the capacity is estimated to be between 130 and 170 or even more than a thousand tons, this bottom line may be just the "constant" capacity of the market.

3. Many different providers, acting officially and unofficially (through traders), may not even know all the market participants, especially since closer to the western border is closer to the German cement plant, and being within the EU significantly facilitates the purchase of goods outside Polish borders. Add to this the fact that some branches of concerns in Poland can organize the purchase of cement through their home headquarters, sending cement beyond all statistics to their plants. There is no such data. Estimation of the production of individual products and determination of their demand for cement should be taken with enormous error margins. Only producers know the scale and volume of purchases.

4. For the vast majority of sellers of cemented cement, white cement is one of many building products they offer, neither the most important nor the most profitable. Much more problematic than a pack of proverbial nails. It is necessary to know the problems that arise, the characteristics resulting from the parameters, the specificity of the applications. Nail is a nail. Width and length. Expressed in millimeters. In addition to the fact that technological support, except for small exceptions, can only be obtained from a foreign manufacturer's headquarters (Aalborg White, CRH), it is clear why a typical, typical seller treats a particular brand the same way he buys a nail. It is because it has to be.

5. To date, there is no organization in Poland, an association to monitor the white cement market, to combat problems, organize meetings and trainings. The association could and should be associated with white cement producers (currently: Aalborg White, CRH, Cemex, CBR), several of the largest distributors of each brand, manufacturers of cement based mixtures, and collaborate with one or more universities. It would promote the principles of quality of production, technical advice, dissemination of knowledge about the cement itself and its applications, and finally - promotion.

This would be an institutionalized cooperation which for many years has existed on the market of gray cement, promoting, for example, the Pewny Cement brand. Such an association would also allow exchanges of information between members, making the rules of cooperation more coherent, and ultimately treating each other. Such an association would, of course, help in determining the real size of the Polish market and how many of those thousands of tons are annual and one-off sales.

Can a new producer enter the market?

Maybe, and what's interesting because of the characteristics and the way the market and relationships look like it should not be a big problem. The issue of price and the ability to cooperate with entities already operating on the market. If the price is calculated at the appropriate level, it will develop its own logistics network, ensuring the sale of cement in big bags, bags and bulk, it has a chance to easily master about one fifth of the market

It will become a natural supplier for most plants - producers of concrete cubes and concrete elements, with the possibility of selling cement in bulk - it will surely find its part on the market of ready-mixed concrete

It must meet several conditions, beyond the price, of course: the principles of cooperation must be clear and obvious, not deviate from european standards (can not resemble Polish typically), must ensure continuity and sensibility of supply logistics, must have a technologist who works with it, and which he is ready to go to potential customers to help them, and finally he must gain the confidence of his clients to constantly and constantly obtain information from the market, to capture what the official numbers, which is very little, they can not show. If he does, he will succeed.