AFRICA BITUMEN MARKET ANALYSIS

One of the major challenges faced by the Africa bitumen market is the fluctuating crude oil prices which directly affects the costs associated with bitumen production and supply. Bitumen is a by-product extracted from crude oil during the oil refining process. Therefore, the bitumen prices are highly correlated with international crude oil prices. Any fluctuation in crude oil prices leads to volatile bitumen costs for suppliers. With crude oil forming bulk of the production costs for bitumen, uncertain crude oil price environment makes it difficult for bitumen producers and suppliers to maintain stable prices over long term contracts. The fluctuating input costs also impact the profit margins of suppliers. This challenge of volatile bitumen costs due to uncertain crude oil prices negatively impacts the supply and demand stability in the African bitumen market.

Market Opportunity - Expansion of public-private partnerships in infrastructure projects

The Africa bitumen market is poised to gain significant growth opportunities arising from the expansion of public-private partnerships in large infrastructure projects across Africa. Many African countries are investing heavily in developing roads, highways, ports and rail networks to boost inter-regional trade and transportation facilities. However, the massive funding requirements for infrastructure often exceeds the budget capabilities of individual African governments. This is driving an increased focus on public-private partnerships where governments are collaboratively working with private players for funding, construction and maintenance of infrastructure projects. The growing number of infrastructure projects planned through public-private partnerships will drive increased demand for bitumen from the construction industry. As bitumen is a primary input used in road construction activities, its demand is expected to rise substantially due to upcoming infrastructure development projects in Africa. This presents lucrative business opportunities for bitumen suppliers to partner with both public and private construction players involved in building transportation and social infrastructure in the continent.