Cement, Concrete and Construction Material
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Industry Overview
The US mineral construction materials industry makes bulk construction products with combined annual revenue of about $75 billion, of which 60 percent is due to cement and concrete products. Foreign companies own a majority of US cement capacity, including Holcim (Switzerland); Cemex (Mexico); Buzzi Unicem (Italy); and Lafarge (France). The industry includes about 120 cement manufacturers, hundreds of local sand and gravel quarries, and thousands of ready-mix concrete operators. In addition, about 130 companies operate brick plants, 500 companies produce asphalt, 200 companies produce gypsum products, and about 1,000 companies make concrete blocks and pipes.
Competitive Landscape
Because cement is a commodity product, manufacturers compete chiefly based on price. Production economies of scale are important, but are limited by the cost of transporting the finished product. The efficiencies that can be achieved with new energy-efficient (but capital-intensive) "dry" production technology are a major source of competition. Small manufacturers may not have the financial resources or production volume to justify investing in the most efficient technology, putting them at a competitive cost disadvantage. Cement imports from Canada are an important competitor in Northern states.
Products, Operations & Technology
Cement and other mineral construction materials are used mainly to construct buildings, roads, bridges, sewers, and other types of infrastructure. Because of the limited processing required to produce these materials, most companies that mine the raw material also make and distribute the finished product. Raw materials, like sand, gravel, shale, gypsum, and limestone, are quarried from open pits or mined in capital-intensive operations using drills, explosives, and heavy machinery. Kilns for making cement and plaster are fired with oil, gas, or coal dust; energy amounts to 25 percent or more of the cost of making cement.
Cement is made from limestone that is crushed, finely ground, mixed with clays, and heated to 3,000 degrees in large (up to 500 feet long) rotary kilns. The heat-treated material, called "clinker," is ground to powder and mixed with a small amount of gypsum. Cement of various qualities can be made by adding other ingredients. The most common type of cement produced is called portland cement.
Concrete is made by mixing cement with sand and rock (called "aggregate"), and water. The proportions of these ingredients, and the types of aggregate, determine the concrete's physical characteristics. Concrete begins to set within a few hours after being mixed, although total curing takes many days. Over 70 percent of cement is sold to "ready-mix" operators who custom-mix and deliver batches of liquid concrete to construction sites.
Bricks are made from shale rock that is crushed, mixed with various additives for color and other characteristics, and fired in kilns at 2,000 degrees.
Gypsum is quarried, crushed, and heated in rotary kilns to form plaster, which is mixed with water and other additives and sandwiched between layers of paperboard to make gypsum board.
Asphalt is made by mixing bitumen, a waste product of crude oil refining, with crushed stone ("aggregate").