AFRICA BITUMEN MARKET ANALYSIS

Africa Bitumen Market Size and Trends

Africa bitumen market is estimated to be valued at US$ 586.7 Mn in 2024 and is expected to reach US$ 812.4 Mn by 2031, exhibiting a compound annual growth rate (CAGR) of 4.8% from 2024 to 2031.

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The growing construction activities in the infrastructure and residential sector are driving the demand for bitumen in applications such as road construction and waterproofing. Increasing government initiatives towards the development of road infrastructure will boost the bitumen market growth. Moreover, the rising focus of major bitumen producers to expand their presence in the Africa region through capacity expansion and partnerships will also aid in market advancement. However, volatility in crude oil prices which impacts the production cost of bitumen acts as a challenge for market growth.

Increasing infrastructure development projects across Africa

Across the continent, there has been significant focus and investments directed towards improving infrastructure. Many countries recognize that boosting connectivity through better roads, rail lines, ports and airports is vital for economic growth and development. It will facilitate trade between nations within Africa as well as globally. There has been a major emphasis on developing road and highway networks to link urban centers with each other and facilitate transportation of goods across borders.

Several multi-billion-dollar infrastructure projects are currently underway. For example, Kenya is building a new standard gauge railway that will connect the port city of Mombasa to countries in the interior like Uganda, Rwanda and South Sudan. This is expected to hugely boost trade and lower transportation costs in the region. Ethiopia too has invested heavily in upgrading its road and rail infrastructure to support its ambitious growth agenda. Countries like Nigeria, Egypt, and South Africa are also spending billions on modernizing airports and developing road and rail corridors to reduce the infrastructure gap.

As African countries pursue an ambitious target of bringing Internet access and mobile connectivity to more people over coming years, more telecom towers and cables are being deployed across remote rural regions as well. This requires a huge expansion of access roads to take equipment and set up the infrastructure. Construction of dams, ports and pipeline projects are also driving demand for bitumen-laid roads to connect major project sites and transport machinery and equipment.

With public and private sector capital flowing in, the infrastructure construction industry across Africa is booming. Construction output on the continent is projected to rise by over 85% in the coming decade. This widespread infrastructure push means roads will need to be built at a rapid pace. Since bitumen is a primary ingredient in asphalt and road-laying works, its demand is poised to grow sharply to meet the requirements of an increasing number of road construction projects and scaling up of transport connectivity.

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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.