Concrete companies increase presence in civil construction

With the support of dosing and mixing plants, concrete mixer trucks and pumps, specialist concrete plants already account for over 20% of the cement consumed in Brazil.

Concrete companies are bolstering the sector of concrete/cement production in Brazil. The scenario is described in the first survey conducted on this segment of the market by the ‘Associação Brasileira de Cimento Portland’ (ABCP - Brazilian Portland Cement Association). Prepared in cooperation with E8 Inteligência and UBM Brazil, the survey shows that consumption of cement in Brazil grew by over 80% between 2005 and 2012, while production of concrete advanced 180%. As a result of this advance, concrete companies rose sharply from accounting for 13% of the country's consumption of cement in 2006 to 20.7% last year.

Evidently, these figures are cause for celebration in the country’s concrete sector, in clear contrast to the general decline in civil construction where growth is expected to be 4% for 2013. “Last year, we estimated that concrete producers had produced about 50 million cubic meters of concrete,” says Valter Frigieri, market director at ABCP. “Considering the projection for Brazil’s GDP and the GDP for construction until 2017, we project that this volume will reach 72.3 million cubic meters by the last year of this four-year period, representing a total growth of 41.2% over the next four years.”

SELF-BUILT CONSTRUCTIONS

Part of this growth is due to urban developments which are gradually replacing manual mixing of cement and aggregates with concrete purchased directly from concrete companies. Thus, the classic activity known locally as “bater laje” (or ‘mixing up a slab’)  is losing ground to the use of concrete truck mixers and compact concrete pumps that transport and pour, respectively, the material that is produced at the concrete dosing plants operated by concrete companies.

According to Eliana Taniguti, director general of E8 Inteligência, the niche of ‘self-build’ (a technical term used in referring to privately built urban works) has been opting for the purchase of ready-mixed concrete thanks to the growing presence of concrete companies in urban centers. “It is a market that has very high potential and possibilities for expansion,” she says, adding that this is the most promising niche for consumption of concrete in the coming years, mainly due to the exponential growth in demand for new homes.

However, until the future arrives, the main drivers responsible for boosting the growth of concrete companies are still large construction works.  The ABCP study shows that the majority of infrastructure construction companies opt to purchase material that is ready-mixed and transported directly by third-party companies rather than maintain their own concrete plant (whether for dosing/metering or mixing) at the construction site. According to experts, this shift is happening for reasons of economy – since concrete companies are said to be ‘equalizing’ the cost of outsourced material based on the charges that construction companies would incur with their own structure and the avoidance of environmental cost, since such purchases eliminate the need for plant facilities near environmental preserves, housing clusters and other areas where they could potentially be considered invasive.

PROJECTIONS

In view of this scenario, Carlos Oliveira, director of RCO, believes that, in the next 15 years, there will be significant growth in sales of concrete plants (a product manufactured by his company). “Emerging countries like Brazil need to develop and, therefore, the innovations in the segment of concrete happen automatically as a necessity,” he says. Similarly CSM, which also manufactures concrete plants, reveals that its annual sales have grown 10% to 20% annually over the past three years.

The growing use of concrete batching plants by construction companies justifies the confidence displayed by their manufacturers. Parallel to that, large construction companies are also said to be acquiring larger batching plants for the execution of infrastructure works, such as hydropower plants, where difficulty of access becomes a logistical obstacle for concrete companies.

That is the foundation for the positive projections made by manufacturers RCO and CSM, which also indicate the sector of precast concrete elements as a major consumer of concrete produced in batching plants. “This sector is dynamic and adjusts accordingly as there are changes in demand,” emphasizes Alexsandro Possani, marketing manager at CSM. "If pre-casting of telephone poles, for example, is not yielding good business, the company easily migrates to the production of concrete pipes by simply equipping itself with a good concrete batching plant and adding certain configurations to its production line.

CONFIGURATIONS

Along these lines, Possani reveals that the market has been demanding specific components or parts of concrete plants, especially when the customer company wants to increase its production capacity. “We only receive orders for complete concrete batching plants when there is a new customer in the segment or when we are dealing with a recently structured factory,” he says, adding that the most common configurations in the Brazilian market for pre-cast concrete elements are concrete plants equipped with 500 liter mixers combined with four silos for aggregates, a conveyor belt, casting equipment and an automatic control panel in the plant.

Automation, according to the CSM specialist, is already a reality in this type of equipment. He points out that these technologies reduce labor costs and the risk of accidents in addition to controlling all of production; from the transportation of aggregates to the definition of the ‘mix design’ or formulation. “The customer can choose between greater or lower levels of automation depending his/her needs,” underscores Possani.

Oliveira, of RCO, considers that one of the problems faced by contractors in relation to the concrete batching plants is precisely the issue of mobility, since transporting these structures is time-consuming and costly. Based on this hindrance, RCO introduced the Nomad D-30 and D-40 - variations of a mobile concrete plant that can be assembled in just seven hours. “Mobile concrete batching available in the domestic market take five to 15 days to be assembled, while stationary plants demand up to 20 days,” he compares.

According to the executive, the equipment had its undercarriage and wheels removed, reducing the need for maintenance of these parts and facilitating its transportation. Furthermore, the assembly can be transported with the use of just two trailers towed by a ‘Munck’ truck. Thus, the expert believes that this type of concrete plant will replace all stationary units with a production of 40 m³/h for the change that has been taking place in the culture of the construction companies will certainly demand new solutions in mobility, production and service in the coming years.

In this respect, Possani, of CSM, agrees with Oliveira, adding that concrete plants are not ready-made products you pick off a shelf. They require development together with the customer to be assembled according to the operation and to ensure the profit margin expected of them. On account of that, as pointed out by the manager, the manufacturer provides training, technical teams to render assistance and even economic feasibility studies which take into account factors that are crucial to the business, such as location and manufacturing process.