Without recovery of the domestic market and a large increase in energy costs

2022 was expected as the year of economic recovery after the ravages caused by the Covid-19 pandemic in the two previous years. However, for the Catalan cement sector, the final balance is clearly lower than the expectations created. But what is most worrying is that new uncertainties have been generated that threaten the activity of an industry that, 15 years after the bursting of the real estate bubble, is still low in terms of sales volume. And without any clear trend that points to a return to normality.

Thus, and with regard to the domestic market, 2022 ended practically the same as it began, since the magnitudes of Production, Consumption and Exports remained unchanged compared to the previous year. In fact, Catalan factories have accumulated 11 consecutive years of stagnation in production and sales volumes. In the record year of 2007, production was close to 10 million tons, and consumption climbed to almost 9 million tons. The bursting of the real estate bubble and the drastic reduction in public investment in infrastructure brought a collapse of the magnitudes, which passed around 3 and 2 million tons respectively. And the sector was at the same level at the end of 2022. During this same period, Catalan GDP has risen by 20%.

The annual consumption of cement per capita in Catalonia is below 300 kg, when the European Union average exceeds 400. In recent years, the amount of public works budgets in Catalonia has been insufficient and always far from the historical average and the objective needs of the country. In 2022 there has been the paradox that there has been an increase of close to 25% in the volume of tenders, but the lack of execution -either due to the deserted tenders or the paralysis of the projects due to the increase in costs- has kept activity in the sector at low levels.
The consequence is that society and the economysuffer: motorways and highways often collapse, the commuter rail network accumulates problems derived from a lack of maintenance, and the construction of trains has been pending for a long time, as well as theroad and rail access to the Ports of Barcelona and Tarragona, the widening of the N-340, the conversion to mixed gauge of the Castelló-Tarragona rail corridor, the completion of the L9 and L10 Metro lines... All these works are essential for Catalonia to be competitive, but also for the industry's own competitiveness.

Energy costs, a scourge for the industry

Beyond the results on the part of the demand, 2022 has been a year marked by the high production costs that the factories have had to assume due to the price of energy. On the one hand, electricity costs have increased by 400% in the last two years. The outbreak of the war in Ukraine at the beginning of the year only aggravated a problem that had been dragging on since 2021. Although prices eased towards the end of 2022, without competitive electricity costs it is impossible for our industry, which for many years has led the cement export marketto compete with other producers in the Mediterranean arc that pay much less for their energy supplies, such as Algeria, Turkey or Egypt.

On the other hand, the cement industry is intensive in energy consumption and for this reason we insist once again on the need for greater availability and authorization of alternative fuels, to reduce the consumption of fossil fuels (also very expensive in 2022), which in turn, reinforce the role of cement factories as essential in the elimination of waste and in the circularity of the economy. The increase in rates for dumping waste is a measure that public administrations must take as soon as possible to achieve these results. At the moment, we are still far behind in the level of energy recovery from waste compared to the leading European countries in environmental terms.

At the same time, the cement manufacturing companies maintain their commitment to decarbonization, the Circular Economy and the minimization of the consumption of material and energy resources that compromise the fight against Climate Change, as expressed in the Roadmap of the Catalan cement industry to achieve climate neutrality by 2050. Among other actions, we are intensifying the use of biomass and other partially or totally carbon-free energy sources and we are going to implement technologies -still under development- to capture and store carbon dioxide carbon, which can then be used in other industries. We are also going to reduce energy consumption, optimize activities that produce emissions such as transportation, and improve the energy efficiency of our industrial processes.