The downturn has been felt across the supply chain, but nowhere more than the cement sector
Concrete giant Lafarge this week announced it was closing its cement plant in Westbury, Wiltshire, further to the closure of half the facility in September. It said increasing energy costs and deteriorating market conditions had led to the decision.
Erdogan Pekenc, managing director of Lafarge Cement UK, said the firm would mothball the facility and that cement manufacturing would only recommence once market and cost conditions had improved.
Three UK cement plants have now closed since September, according to the Concrete Society.
Lafarge’s announcement comes after a state of trades survey by the Construction Products Association showed that sales at 90% of manufacturers dealing in cement and aggregates had dropped by 5% in the last quarter of 2008. Forty-one per cent were operating at below 60% of the capacity in the last quarter of 2008.
Manufacturers can’t justify keeping plants open when demand is not there
Noble Francis, CPA
Noble Francis, economics director at the Construction Products Association, said the speed at which the downturn had hit the sector was “unprecedented”.
“High energy costs are still hitting the industry,” he said. “Manufacturers operate on long-term contracts so the high energy costs mean they can’t justify keeping plants open when demand is not there, especially in energy-intensive operations such as concrete production.”
He added that difficulties in obtaining credit were also responsible for plant closures.