AFRICA BITUMEN MARKET ANALYSIS

Market Concentration and Competitive Landscape

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Growing demand for road construction and maintenance

Africa has one of the lowest road densities in the world with only approximately 35km of paved roads per 1000 sq. km of land area on average. Many existing road networks were developed in the past and are now in need of substantial repair and expansion to handle rising traffic. The poor state of road infrastructure has been a chief logistical bottleneck, increasing transportation costs and causing huge losses estimated at over $100 billion per year for landlocked countries due to delays.

With economic activity growing, vehicular traffic volumes across major cities as well as small towns are rising rapidly. This is putting additional pressure on outdated road infrastructure.

Governments and regional blocs realize that improving core road connections is critical to facilitate movement of goods and people within countries and across borders. There is a need to build new roads as well as widen, strengthen and overlay existing roads to handle increased cargo loads from heavy trucks and higher traffic densities. Maintenance of road surfaces also needs to be stepped up with resurfacing and rehabilitation works performed far more regularly to extend the lifespan of existing networks.

For instance, in January 2023, Nynas, a leading producer of bitumen and naphthenic specialty products, expanded its bitumen production capacity in South Africa to meet the growing demand for high-quality road construction materials. This strategic move aligns with Nynas' commitment to supporting the development of sustainable infrastructure in the region.