Industry of precast concrete is passing through a period of accommodation

Manufacturers of the industry reduced their capacity of production, matching their productivity with the reduction of demand occurred in the market

Till 2012, the industry of concrete precast units increased its production. Its best performance occurred five years before, when the increase was higher than the average rate of 10 percent. For 2013,the expectation was positive, as well as it were for the next years. But that did not occur, as shows the most recent survey of theFaculdadeGetúlio Vargas (FGV),published in the 2015 Yearbook of the AssociaçãoBrasileira da ConstruçãoIndustrializada de Concreto (Abcic).

This study deals with data from 2014, when the production of precast units reached 1.03 million of cubic meters, what meant a reduction of 3.2 percent compared to the former year. In 2015 the quantity was even lower, saysÍriaDoniak, president ofAbcic. And projections are not positive also for this year.

In the survey of FGV, that will bring the consolidated results of 2015 only in the second half of this year, there is the counterpoint that the production of concrete precast industry was reduced less than that of other areas of the industry. The index developed by the institution to measure the construction material chain as a whole showed a reduction of almost six percent (practically twice of the reduction of precast market) in the period.

Just as occurred in the entire industry of construction, there was also a reduction in the installed production capacity of precast industry, which passed from 1.678 million of cu.mt. per year in 2013 to 1.635 million of cu.mt. per year in 2014. This shows that the industry is matching its productivity with the demand, almost instantaneously and in the same measure.

Concentration and opportunities

Even with the general reduction of the market, the production measured in the largest companies of the industry (which produce more than 100,000 cu.mt. per year) increased an average of 7.7 percent. The smaller companies of the chain (with yearly production up to 10,000 cu.mt.) also increased their production. This shows that both ends of the chain suffered less than the middle.

Therefore, average-sized companies (100 to 500 employees, corresponding to 61 percent of the industry) were responsible by the general reduction of 2014 figures.

Result in scale

The production drop is reflected in the reduction of the cement consumption by this market, 10.7 percent below that of the former year, reaching 379,300 tons per year. But the study makes clear that the lower consumption of cement is not totally related to the reduction of the market, since changes in the technologic process lead the companies to reduce the use of this material at the same time that the consumption of steel was increased in 12.6% in the same year.

This is the question: the profile of technologic changes in the production of concrete precast elements is increasing directly the demand for steel, which is the main competitor of precast concrete when produced in the formof profiles and used for building structure. Obviously this is not the same increase related by FGV, which involves specifically steel wire ropes, steel wires and steel bars.

If compared to 2013, the production of reinforced concrete (which uses more steel) increased from 40.5 percent to almost 45 percent of the precast units produced in Brazil. Therefore, the survey shows that prestressed concrete is losing space, even corresponding to most of the 1.03 million of cu.mt. produced by the precast manufacturers associated to Abcicin 2014.

Investments carried out in 2014 and the forecast of investments for next years also influence the industry of precast concrete. While the interviewed companies showed intention of investing up to 15.5 percent more in 2013, this expectation turned to practically zero in 2014.