The year ahead...

2015 has got off to something of a bumpy start with sharply-declining oil prices (below US$50/bbl at the time of writing), on-going geopolitical risks (eg Russia and Syria), and economic uncertainty in some key regions, most notably the eurozone.

China will continue to be the focus of attention as its government tries to engineer a smooth transition from an investment-driven to consumption-led economy. This will have big implications for cement demand, which has been a major beneficiary of the pro-growth policies of the Chinese government over the past decade. Already in 2014, annual demand growth had fallen steeply to just 2.9 per cent as construction investment was reset to more sustainable levels.

Nevertheless, cement demand growth outside of China should still more than offset the slowdown in the world’s largest market, with both India and the United States forecast to expand by in excess of eight per cent in 2015. World cement demand growth – ex-China – is predicted to reach 3.7 per cent in 2015, up from 2.2 per cent in 2014, according to recent analysis by Morgan Stanley. (For the full set of global forecasts for 2015, read the report in the January issue of International Cement Review.)

Mergers and acquisitions
The Lafarge Holcim merger will dominate the corporate landscape over the coming six months, with June the target for the deal’s completion. In the countries where disposals will be made, consumption growth over the 2014-19 period will be strongest in India (6.4 per cent), Romania (5.4 per cent) and the Philippines (5.3 per cent), while the weakest performances are predicted for Serbia (-8.0 per cent), Slovakia (-1.0 per cent) and Germany (0.4 per cent). For a detailed analysis of the markets impacted by the Lafarge Holcim asset disposals, click here.

Last year ICR explored the intriguing possibilities of other corporate mergers, including Cemex-HeidelbergCement and Italcementi-HeidelbergCement. Looking ahead, nothing should surprise us, but whatever 2015 does hold in store, ICR will be sure to provide timely coverage of all new developments.

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