The UK Concrete Products industry is at a pivotal juncture, marked by both strong growth but also a need for more sustainable products. The recent sharp falls in the house building sector appear to be easing as both the incumbent and potential future government accept the need for more homes to be built. Elsewhere, inflation falling, and interest rates are softening, meaning demand for building is forecast to recover strongly in 2024.
With that in mind, market analysts Plimsoll have produced a new interactive study highlighting which Concrete companies are well placed to adapt and which providers are already in financial danger and will struggle to absorb the additional R&D costs of new, sustainable concrete products.
Sustainable Practices: The New Norm For Concrete
Aligning with global environmental concerns, the UK concrete industry is increasingly focusing on sustainability. This shift is exemplified by new standards encouraging the use of cement replacements in concrete, as reported by New Civil Engineer. These alternatives are not only eco-friendly but also support the industry's adaptation to climate change and resource scarcity.
While the concrete industry has reduced its carbon footprint by 53% since 1990, the new standards of BS8500-1 2023 and BS8500-2 2023 are designed to reduce it even more aggressively. Insistence that all concrete products must have at least 20% of its composition from limestone powder is one example how expectations are changing.
Implications for the industry and its leading players
The industry must navigate these product requirements strategically. The potential for acquisitions and growth exists alongside the need to innovate and adopt sustainable practices. Companies must balance profitability with environmental responsibilities, ensuring long-term their own sustainability as much as the planets.
The Plimsoll Analysis: A Detailed Overview
The Plimsoll Analysis assesses, values and rates the prospects of the 500 leading companies in the UK Concrete Products industry. It reveals a landscape ripe with potential and challenges:
Acquisition Opportunities: 77 companies are rated as highly attractive for acquisitions, indicating a robust market with significant consolidation possibilities.
Growth Dynamics: The industry has seen notable growth, with 78 companies growing by more than 20% in the latest year, outpacing the average market growth of 11.2%.
Profitability and Risks: While 222 companies are making substantial profits, 54 companies are serial loss makers, highlighting the variability in financial health across the sector.
Company Valuations: The average value of UK Concrete company has increased 17% in the latest year. However, 41 companies have lost more than a third of their value.
The UK Concrete Products industry stands at the crossroads of growth and sustainability. By leveraging the insights from the Plimsoll Analysis and adapting to new construction standards, companies can carve a path to success that is both financially and environmentally sustainable.