Geography

Area 357,021km2

Capital Berlin

Demography

Population 82.4mDensity 231 inhab./km2

Urbanisation 88%Offi cial language German

Economy

GNI per capita US$34,580Currency euro (EUR)Per capita cementconsumption 327kg

Germany

While German cement consumption has been falling since 1999, 2004 and 2006 have provided some hope to cement producers as very modest increases were noted. However, the fragmented industry continues to suffer from considerable overcapacity.

Having declined by 0.2 per cent in 2003 and grown by 1.6 per cent in 2004, the German GDP

added 0.9 per cent in 2005. Helped by exports, the growth rate is forecast to increase to 2.4 per cent during 2006 and to reach 1.8 per cent in 2007. Infl ation is estimated at two per cent in 2006, rising to 2.6 per cent in 2007 because of the in-crease in VAT from January.

Overall construction volume in 2005 declined by 3.1 per cent in the old, western, länder, with the reduction in the new provinces being somewhat greater at -4.1 per cent. With the im-portant exception of offi ce buildings, where the market is over-supplied, commercial and industrial building ac-tivity increased in 2005 and this positive trend continued into 2006. Public sector construction has continued to decline in the face of fi nancial constraints, but private civil engineering activity has shown some improvement.

Housing completions were virtually unchanged last year, showing a 0.3 per cent increase to 238,977 units, having risen by 5.3 per cent in 2004 after nine

consecutive years of decline. The con-struction of blocks of fl ats continued to fall, while individual houses showed an increase. However, 2006 is expected to show more of an increase, at least par-tially for fi scal reasons with subsidies running out and the increase in VAT likely to bring forward some building activity to avoid the higher rates.

ConsumptionWith the exception of 2004 and 2006, German cement consumption has been falling since 1999 and the downward trend is likely to continue in 2007. In 2005, cement consumption dropped by 7.5 per cent to 26.93Mt. Clinker con-sumption has fallen more markedly as the use of extenders, notably slag and limestone, are being more used for en-vironmental reasons.

Housebuilding is the prime consum-er of cement, taking around 37 per cent, followed by civil engineering with 34 per cent and commercial and industrial building work with 29 per cent.

According to the German Cement Federation, the ready-mixed concrete

industry accounted for 48.6 per cent of domestic cement deliveries during 2005, with 25.7 per cent going to con-crete products producers. Other bulk deliveries represented 16.4 per cent and bagged cement accounted for 9.4 per cent. Ready-mixed concrete production fell by 8.4 per cent in 2005 to 40.5Mm3, but has recovered during 2006.

Broken down by type, the cement sold by Federation members had the following split: CEM I represented 55 per cent of domestic deliveries, CEM II 32.9 per cent, CEM III 11.3 per cent, leaving just 0.8 per cent for other ce-ment types. Portland limestone cement, CEM II-L, continues to gain market share and accounted for 16 per cent in 2005, compared with 14.8 per cent in the previous year. The portion of slag-based products (CEM II-S and CEM III) stood at 24.8 per cent, with the use of slag based products is particularly strong in North-Rhine Westphalia. An-nually, approximately 5Mt of granu-lated blast furnace slag and 0.38Mt of fl y ash are used in the German cement industry.

ProductionThe fragmented German cement mar-ket still counts 20 different cement pro-ducers. North-Rhine Westphalia is the prime cement manufacturing province

152 THE GLOBAL CEMENT REPORT

Luxe

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urg

Berlin •

Denmark

North Sea

The Neth

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Bel

gium

France

Switzerland Austri

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Czech

Republic

Poland

Baltic Sea