FRANCE CONSTRUCTION AGGREGATES MARKET ANALYSIS

Market Challenges And Opportunities

Drivers

Increasing residential construction in the country is another major factor driving growth of the market in France. The construction of residential building is on significant rise since 2014 with 379,000 dwellings obtaining authorization for construction in 2014, 396,900, 453,200, and 497,000 in 2015, 2016, and 2017, respectively, as per report published by European Commission in June 2018 on ‘European Construction Sector Observatory’. As per the same source, the number of building permits also increased by 19.0% in 2016 compared to 2015. The increase in construction of residential buildings is attributed to government schemes such as the Zero-Interest Loan and others. Moreover, Housing Energy Efficiency Renovation Plan launched in 2013 aimed to renovate all residential buildings by 2025, which consumes energy of 330 kWhep/m2 per year. By the end of 2017, 450,000 buildings were renovated including 105,000 social homes. Thus, this renovation plan is also driving the construction aggregates market growth in France.

Market Restraints

Availability of low cost substitutes such as fly ash and recycled aggregates is expected to hamper growth of the France construction aggregates market. However, these materials offer lower compressive strength compared to construction aggregates, which limits their demand from the construction sector. Also, surging presence of large number of players, intense competition in the market, high capital cost required for operations, and stable demand for aggregates from France’s construction sector makes entry of new players difficult in the market.

Market Opportunities

Increasing Number of Acquisitions among Key Players in the France Construction Aggregates Market is anticipated to provide more opportunities for the key players. For example, in July 2019, Heidelberg Cement France announced that it will acquire Cemex’s aggregates and ready-mix concrete business in France. The acquisition aims to increase the Heidelberg Cement production in Paris. The acquisition includes 28 ready-mixed concrete plants and seven aggregate quarries. Similarly, in 2017, Colas Sud-Ouest, a construction engineering company, acquired 50% stake in six quarry companies operating in Southwest of France, which is owned by Malet family. The acquisition was aimed to increase aggregate production of Colas and further expand its geographical presence in France, particularly in the Toulouse city.