Understanding the White Cement
Market in the U.S.
Secondary Research Final Report
Prepared for
[Confidential Client]
Submitted by:
Mike Morgan, PhD
September, 2010
1
Background and Objectives
The client, headquartered in [confidential], is a leading producer in the global
cement market. The company manufactures white, gray, and calcium aluminate cement
and clinker, as well as ready-mix concrete for the construction industry. The client has
more than 40 facilities and an annual production rate of about 4 million tons of cement,
3.5 million tons of clinker and 1.5 million cubic meters of concrete. Established in 1972,
The client sells its products in nearly 50 countries on four continents.
The client is currently considering strategic options for the white cement business
in the U.S. Because of this, it would like to undertake an overview study of the U.S.
market and of both buyers and sellers.
Ideally, this would include, on the seller side, production capacity, volume and
pricing, and channels of distribution and what governmental regulatory actions have or
will have the largest impact on production. The client would also like to know about
energy costs – these are available only for the cement industry as a whole.
There have been no mergers or acquisitions currently impacting the U.S. white
cement industry specifically, nor do there seem to be any on the horizon. The single most
important change in domestic activity has been the closing of white production facilities
by TXI, since TXI still sells white cement through outsourcing.
On the buyer side, the client would like to understand each of the key buyer
segments and drivers of demand within each segment. This would include not only buyer
behavior but also buyer attitudes, including expectations about product quality and
service. Segments are based on usage and, for white cement, include: architects,
chemical additive companies, ready-mix suppliers, precasters and white masonry brick
and mortar suppliers.
2
Methodology
Much of the information the client seeks was available from secondary sources.
This includes data primarily on the raw production side of the market – factories,
production volume, prices and trends. Other information was more difficult to obtain
from secondary sources alone, such as: secondary processing plants, wholesalers and
end-users. Therefore, a combination of secondary data and primary survey research was
necessary. This report summarizes the results of the secondary research efforts.
Some of the distribution channels could be sized directly from available data in
Dun & Bradstreet’s database of businesses and other secondary sources. Further
information, however, required interviews of architects, chemical engineers, ready-mix
suppliers, precasters, white mortar and brick suppliers and chemical additive companies.
In order to obtain the needed information, in-depth interviews were conducted
with architects, ready-mix suppliers, precasters, white mortar and brick suppliers and
chemical additive companies. Besides basic requirements and business practice
information, we collected customer expectations regarding availability of product by
form, service, business relations and the types of marketing by different competitors for
their business.
We then combined the secondary source data and interview data to produce an
overall, quantified description of the market opportunity for the client in the U.S.
Secondary data sources.

Concrete Products – a comprehensive trade publication

Business Source Complete – online publications search engine
Both of the above sources are used to compile information on trends in the industry,
mergers & acquisitions, major players and their market positions, and legal/regulatory
issues.

USA Trade Online – Database of Import/Export statistics by commodity, industry,
country, import district, etc.
3

The Datamyne database of bills-of-lading and census information on companies
delivery to ports and generally prevailing prices for those deliveries.

Portland Cement Association research groups – reports:
o White cement production time series
o 2009 Annual Yearbook
o 2009 Plant Information Summary
o Apparent Use reports

United States Geological Survey agency
o Monthly survey data
o Annual yearbook publications
The above four sources are used to compile data on cement production and consumption,
white cement production and consumption, trends, and background information in
preparation for the primary data collection phase of the project.

CM Cemnet International Cement Review.

ICR Quarterly: The Global White Cement Report 2003. This source has a number of
integrated reports, a database of producers and other information that provide overall
views of the industry and specialty areas such as white cement production,
consumption and user groups.
4
Executive Summary
Market Overview. White cement is largely imported. In 2009, for example, out of 896
thousand metric tons consumed (see table 4 below), 683 thousand, or more than 76%,
were from imports (see Table 9).
Reliance on imported white cement has increased in the past two years due to the closing
of US manufacturing plant operations:
1. LeHigh has plants in York, PA and Waco, TX.
2. Texas Industries had a plant in Riverside, CA. However, they are no longer operating
it and now only resell white cement purchased from other manufacturers.
3. Federal White still has their one plant in Woodstock, Ontario, but that's the only one.
This means that, currently, there are only two white cement manufacturing plants in the
US and one in Canada. There are four white cement plants in Mexico, according to the
2010 North American Cement Directory. Lafarge, through its Cemento Portland Blanco
subsidiary, has one and Cemex has three.
U.S. demand for Portland Cement fell heavily when the real estate market collapsed,
beginning in the second half of 2007 and continuing through the first half of 2010.
White cement’s import drop between 2008 and 2009 of 31% (Table 3) was considerably
less than that of all cement imports in the same annual period, about 40% (USGS Mineral
Industry Survey, December 2009). This suggests a “cushion” in the downside demand
for white cement.

This may confirm a general industry perception that white cement is a kind of “luxury
product” within the cement line and that construction projects involving white
cement-based products are high-budget, luxury projects, relatively immune to
economic cycles.

We suspect that white cement also enjoys favorability among concrete additives
suppliers, and that somehow the demand for concrete additives, which has grown at a
remarkably, seemingly-recession-proof rate for the past five years, has bolstered the
demand for white cement indirectly.
5
o While white cement may be a key component in the final cement and concrete
additives products, there is no direct evidence that white cement demand per
se will change unless the additives industry growth rate increases
substantially.
o One element in this judgment is that concrete and cement additives may or
may not involve, in the future, more white cement than gray cement than the
amount of white currently used.
o A recent report issued by Fredonia, for example, covers the entire concrete
additives industry and includes market projections for both additives and
cement. Nowhere in the report, however, is white cement mentioned
specifically.
Market demand. There are a small number of highly proprietary producers in the U.S.
Even these regularly resell imported white cement. This is mainly because of the small
percentage that white cement represents of the total market.
The market outlook projects a return to 2008 levels (about 30% below the peak levels of
2007) by the year 2013. This bodes well for a well-planned, slow but deliberate rollout
of The client to the market over the next three years.
Year
2008
2009
2010
2011
2012
2013
Projected Consumption
Total US
Texas California
1,284
192
130
896
125
86
917
127
88
979
136
94
1,061
147
102
1,261
175
121
See Table 5 for market projections by state. Texas and California represent the two
biggest opportunities for both existing and new market entrants.
Focus on imports. As noted above, 76% of white cement consumed is imported. Thus,
evidence points to imports as the major source of competition and the area to focus on
competitively.
6

The top producers of white cement are each situated in a different country. Thus,
comparison of country data on import quantities helps to produce a picture of the
potential competitive positioning for The client.

In addition, manufacturers tend to use only one or at most two ports for the vast
majority of their imports.

Thus, The client’s best strategy is to (initially) utilize a single port for delivery, build
a terminal near that port and market heavily to resellers and processers within the
state for that port. An exception is in waterway passage, such as along major rivers,
to states also easily accessible from the port. The main candidate for this type of
market entry is New Orleans, Louisiana.

The port selected should not already be “saturated” in the sense of major imports
from competitors such as Federal White, Hanwen, Cemex, Aalborg, etc., in the
southern coast ports that The client is considering. The above chart shows that the
ports of Houston and Miami may already be saturated.

Based on country by import district data, along with demand patterns within states, it
appears that New Orleans, Louisiana is the best candidate. (Savannah, Georgia, is
also a candidate, but the latest projections of construction outlook for the part of the
country that port would serve are significantly less than projections for the rest of the
country.)
Brand choice process and players. There are, in effect, only four main types of
companies who make a selection of a manufacturer’s brand of white cement from among
the competing set of brands. All of these are, in effect, resellers of the white cement after
combining it with other substances or products and, in some cases, molding the cement
into precasted forms of concrete for delivery to the end-user. (In addition, architects may
7
specify a cement brand, but this is rare – usually they rely on product standards to ensure
a quality brand choice.) These brand decision makers include:
1. Ready-mix suppliers who mix the cement with aggregates on the way to a
construction site and then pour it into casting molds upon arrival.
2. Precasters who mix the cement with aggregates, pour it and set it in prepared molds,
then deliver the hardened casts to the job site.
3. Masonry block and mortar manufacturers who mix the cement with aggregates
and use them to create blocks of white cement as well as white cement-based mortar.
The main differences between masonry block and precast is that the latter is
specifically made-to-order and involves very strict standards for reflectance, etc.,
while blocks and mortar can vary to some extent in color and cement content and are
more of a standardized production line item.
4. Chemical engineers who choose brands of white cement to combine with their
additives – such as plasticizers. (As noted above, while the cement additives industry
may be growing rapidly, that is no guarantee that it holds the keys to white cement’s
future in the U.S.)
Strategic considerations. Leaving aside the chemical additives channel for a moment,
the marketing strategist must grasp and address some key elements in the process of
creation of and delivery of white cement that tend to drive most, if not all, decisions made
by both brand choosers and end-users:

Because of weight and bulk, cement, concrete, and accompanying products are
relatively expensive to transport. This is true for all constituents in the supply chain –
manufacturers (domestic or import), ready-mix suppliers, precasters and masonry
block and mortar suppliers.

Some portions of the product mix, such as the finished concrete prior to mixing, have
a relatively short shelf life, especially under adverse weather conditions.

In-transit mixing times (typically about one hour) tend to restrict the size of the
trading area for ready-mix suppliers to those available within a short driving distance
from the end-user’s job site. For example, if too many ready-mix trucks arrive at a
8
job site at the same time it may be impossible to complete all mixing and pouring
within the one-hour window.
The above three points support that The client should enter one state market at a time,
each associated with one port. This will help guarantee on-time rail or truck delivery to
the customer. Along with the short shelf life of cement, the short in-transit mixing times
for ready-mix suppliers mean that these customers will buy for the short term and sell
within a geographically limited (i.e. within-state) area.

The compression strength of the concrete is tested at 7 and 28 days after setting. If it
does not hold up, the supplier must remove and replace all concrete from the given
delivery, a very expensive proposition. Thus, suppliers tend to minimize risk by:
o Ensuring that their choices of cement (with or without additives), aggregate
and the concrete mixture are actually above compression strength standards
before pouring.
o Adding more cement to the mixture than the architectural specs per-concreteyard call for.

Suppliers are thus in a dilemma of whether to reduce risk by increasing
their own costs. Feedback from respondents indicates that it is
becoming more difficult to live up to whiteness, consistency and
compression standards and still make money on a given bid.

Although he can cheaply accommodate the additional cement by using
cheaper suppliers, such as those in China, the supplier runs a risk of
inconsistency in the whiteness of the final product, another reason they
may ask him to remove and replace an entire placement.

The concrete supplier faces intense price competition in the bidding process. For any
concrete construction project worth more than a million dollars, for example, the
supplier bid pool may easily consist of a dozen or more competing companies.

Despite the price competition in the bidding process, a company such as a precaster
has set up his own set of “recipes” for blending in colors and additives to produce the
delivered product. These recipes are not easy to change.
9
o To avoid having a change in the consistency of the whiteness of the base
product, before coloring, a precaster may order from the same manufacturer
all the time, even though manufacturers’ prices fluctuate.
o One important selling point for The client would be to emphasize that its
white cement is consistently the same color from batch to batch, so that
precasters and ready-mix suppliers can be assured their own recipes will
consistently work.
o Another opportunity for The client would be to form a partnership with a
concrete additives company, who may then recommend that the customer use
The client for all of their additives. The client, in turn, could communicate its
partnership to customers and help assure them that the additives can increase
its shelf life and tensile and compression strength.
Where else do concrete additives fit into the scenario? Here are some more general
observations:

It is unlikely that concrete additives companies will deploy their own brands of
cement – that is, resell existing supplier cement after mixing in selected chemicals.

It is more likely that these companies will supply independently to the customer.
Additives companies are unlikely to provide even repackaging, instead relying on the
distributor to handle the product after mixing in the additive chemicals.

These considerations suggest that white cement producers should partner with the
concrete additives companies in order to provide a standard, wide product selection
for their buyers.
The general idea is that the cement manufacturers/importers must support the concrete
supplier in a number of ways.
Below are some general rules for The client as a new market entrant to consider.

The cement importer must select the ports, and therefore states, where most of its
marketing and sales efforts are to be concentrated. Ultimately, these should be states
in which
10
o Private and public construction activity is healthy and/or expected to grow
over the strategic planning timeline.
o Strong, consistent relationships can be formed with the larger ready-mix,
precast and masonry block suppliers.

This means ranking the relative size of these customers in terms of
annual revenues and number of employees, and targeting those
companies in the upper echelons of size.
o The ports of entry are convenient to The client in that the cost of the rail and
truck shipments from the ports can be minimized. This supports the current
desired focus of The client on Texas, Louisana, Mississippi, Alabama,
Georgia, Arkansas and Florida. However, multiple terminal construction
should not be planned yet. Instead, The client should choose only one
port/state to operate in and then expand as consumption of white cement
expands based on the forecast noted above.

We need to consider the current pattern of delivery of white cement by port in
these states as a strategic factor in The client’s market entry.

Pricing. It seems clear from the import data that price is a key element in
determining which countries and companies suffered the greatest recent
downturn. The relatively low cost of shipments from Turkey, over time, is likely
to be the reason that it has had less of a drop in imports than other countries
during the economic downturn beginning in 2008.
Thus, The client should maintain its current pricing throughout the upcoming launch of
its products in the target U.S. Markets.
Sales force. The most important factor in The client’s market entry is the building and
deployment of its sales force in the target U.S. Markets. This involves:

Acquiring sales force staff and setting up a compensation system for them that
depends not only on completed orders but on the number of new customers (readymix suppliers, precasters and masonry block/mortar suppliers) they obtain during
their sales calls.
11

Obtaining new customers defined as securing a place on the vendor lists used when
bids are sent out.

As noted above, many concrete suppliers buy from the same manufacturer in order to
maintain the consistency of the whiteness (or base whiteness before coloring) in their
final products. Thus, obtaining the first buyer trial or sale is a major breakthrough,
and should be rewarded more richly than resales.

Ensuring that the top potential customers are reached by appropriately sizing them
based on Dun & Bradstreet data – annual sales, number of employees, etc.

Continually following up with the prospects to ensure that The client’s white cement
is considered in all new bids.

Developing of the The client sales force accompanied by marketing support – mailing
brochures, including architects and chemical engineers in the mailings, on a regular
basis.
Web site. As part of its market entry strategy, The client needs to construct a customerfocused Web site with the following functionalities:

The ability for the customer to view all available products, including those with
chemical additives that increase the favorability of a product. These would include
both white cement per se and masonry white cement when that becomes available.

A system in which the potential buyer can obtain a bid quickly and easily by
submitting information online. The online bids can be couched with caveats, for
example, to be pending a final signed contract, but obtaining the bids online would
boost the buyer’s ability to turn around his own bids quickly and efficiently.

The ability for buyers to track their shipments online and to be notified by email of
key events – shipments from Turkey, mid-Atlantic transfers of merchandise, arrival at
the port, passage by customs and shipment from the port by rail or truck to the
buyer’s location.

This will also allow The client to begin building a customer database that lends itself
to true customer relationship and value management, since orders can be tracked,
sorted, and customer value can be prioritized accordingly.
12
13
Detailed Findings
Clinker and cement Production by Volume and by growth trends
Table 1 shows the white cement and clinker production in U.S.A. and in Canada.
There were two companies that manufactured white cement in U.S.A. – Texas Industries
and Lehigh1 White cement. Texas Industries has closed its white cement plant in early
2009 and only Lehigh White Cement remains.
Thus, at this time there are only two white cement production plants in USA, both
belonging to Lehigh White Cement. With the shutting down of Texas Industries white
cement plant, the total U.S. clinker capacity is 213,000 tons per annum and the finish
grinding capacity is 260,000 tons. Federal White Cement in Canada invested heavily in
new plants in 2000-2001 and has steadily increased their capacity to 998,000 tons.
Table 1: U.S. and Canada White cement and Clinker Capacity by Volume
Plant
Location
Texas Industries
Lehigh Cement
Lehigh Cement
Federal White Cement
Total US and Canada
Riverside, CA
York, PA
Waco, TX
Woodstock, ON
Kilns
2
1
1
2
6
Finish Grinding
capacity
(000 tons)
113
127
133
477
850
(Source: PCA Plant Information Summary 2008)
*Note: Texas Industries closed its white cement plant in early 2009.
1
LeHigh includes LeHigh, Hanson, and, worldwide, Heidelberg cement companies.
14
Clinker
capacity
(000 tons)
86 *
112
101
998
1297
As seen from Table 2, the U.S. capacity for the production of white cement has
remained steady around 300,000 tons for a long period before declining in 2009. The
2009 consumption of white cement in U.S.A. is estimated to be around 896,400 metric
tons.
Table 2: White cement production trends
Total White Cement
Clinker Capacity (000
metric tons)
U.S.
1994
264
1995
269
1996
267
1997
264
1998
274
1999
291
2000
305
2001
305
2002
311
2003
298
2004
311
2005
311
2006
310
2007
310
2008
299
2009
213
(Source: PCA Plant Information Summary 2008)
15
Canada
179
182
184
184
184
230
820
929
929
998
998
998
998
998
998
998
Shipment Volume, Price and Trends
In Table 3, we report the shipments of white cement from U.S. producers, and
imports of white cement during the period 1994-2009. These figures are taken from the
U.S. Geological Survey data. Note that the quantity shipped by U.S. producers is far in
excess of the installed capacity, which suggests that the producers imported white cement
and sold it in the U.S. There are other distributors who also sold imported white cement
in the U.S. market.
In addition, the table reports the customs value of the imports and the C.I.F. value
of imports. The customs value is the value declared to US Customs while the C.I.F. value
refers to the customs value of the imports after adding freight, insurance and
transportation costs. Figure 1 graphically depicts the trend in shipments and imports over
time.
From Table 3 and Figure 1, one can see that the demand for white cement both in
terms of shipments from producers and from imports has increased steadily from 1994 to
2006 and then declined significantly in the last three years since the peak demand in
2005-2006. This is in line with the decline in construction since the collapse of the
mortgage industry in 2008.
Table 3: U.S. Producer Shipments; Imports and Prices 1994-2009
Shipments
from
Cement
Custom
Producers Imports value of
(tons)
(tons)
imports ($)
Custom
value per
ton ($)
C.I.F. value
of imports
($) a
C.I.F. value
per ton ($)
Mill
value per
ton ($)
1994
519000
458862
34242511
74.62
177.04
1995
549000
435776
34853624
79.98
174.66
1996
615000
389661
35406301
90.86
183.08
1997
634000
519980
45707111
87.90
177.05
1998
790000
845984
66027780
78.05
161.40
1999
848000
825183
84769103
102.73
166.04
2000
894000
923136
87872077
95.19
16
102177665
110.68
159.45
2001
870000
936408
86485724
92.36
97641078
104.27
155.00
2002
952000
866478
82784064
95.54
93360577
107.75
157.00
2003
985000
847767
83914452
98.98
97909244
115.49
159.00
2004
1130000
1197294
113903964
95.13
140691460
117.51
164.00
2005
1190000
1484702
134747062
90.76
168365748
113.40
176.00
2006
1180000
1477607
149140539
100.93
181641711
122.93
191.00
2007
1020000
1641591
156499511
95.33
205950666
125.46
197.00
2008
823000
985160
119194129
120.99
147205830
149.42
221.50
2009
581430
683038
86008185
125.92
100715129
147.45
N.A.
(Source: Shipments (USGS AY T15), I mports (IM145)
a
C.I.F. value includes insurance/freight/transportation costs
Figure 1: Shipments and Imports of white cement 1994-2009
1800000
1600000
1400000
1200000
Shipments from
Cement Producers
1000000
800000
Imports
600000
400000
200000
0
1990
1995
2000
2005
2010
Shipments from producers declined 13.6%, 19.4% and 29.4% in 2007, 2008 and
2009 respectively and current shipments are about half of the shipments in 2006. More
drastically, imports declined 40% and 30.7% in 2008 and 2009 respectively.
17
The trend in prices can be analyzed from the customs value of imported white
cement using three different reported prices – customs value per ton, C.I.F. (customs
value including insurance, freight and transportation) per ton and mill value per ton. The
average price of white cement has gone up in the past three years. Customs value per ton
of white cement went up from $95.33 per ton in 2007 to $125.92 per ton in 2009. Similar
increases can be seen for the C.I.F. value per ton and the mill value per ton of white
cement. The graph in Figure 2 clearly shows this trend.
Figure 2: Trends in prices of white cement
250
200
150
Custom value per ton
C.I.F. value per ton
100
Mill value per ton
50
0
1990
1995
2000
2005
2010
Special notes on pricing.2
Mill net (or terminal net) is an average price to final customer, inclusive of any bagging
or palletizing charges, but excluding any onward delivery charges or transportation
charges to terminals.
 For a cement plant and its terminals, it is thus, in effect, an FOB plant price.
 For an independent terminal, it does not include any further transportation
charges.
 For an import terminal, it would thus represent the CIF price, plus all port charges
(stevadoring/storage/any bagging charges) + terminal markup. But no further
transportation costs.
CIF = Cost, Insurance, and Freight. "Cost" is usually equated to Customs Value which
should equate (if the ownership has not changed) to the FOB ship value at the originating
port. If the ownership has changed "mid-Ocean" however, Customs Value could exceed
2
From special communication with Hendrik Van Oss, who is responsible for compilation of tracking
numbers and statistics on cement from other countries.
18
the Cost or FOB ship value, as the new owner may include a markup. Generally, CIF
minus the Customs Value = insurance + freight.
Our independent research established that a contractor in a competitive market will pay
about $235 per metric ton for white cement. Please note that this should not be
interpreted as the final, current price, however, since it is subject to daily changes.
Special note on bag versus bulk purchasing
Through various sources on the Web we established that the larger ready-mix suppliers
(20 or more trucks) do buy in bulk or in large bag, while the smaller ready-mix suppliers
buy in small bags. Both types, however, buy small bags to make up shortfalls when
necessary.
Consumption of white cement
The consumption of white cement has been calculated in the following way. By
taking the total shipments of white cement from U.S. producers and deducting the
installed capacity of white cement at these plants, one can obtain the amount of white
cement imported and sold by these producers. By deducting the above quantity of white
cement resold by producers from the total imports of white cement to the U.S., one can
obtain the amount of imports that were sold by other agents and dealers not associated
with production. The amount of white cement sold by others plus the amount of white
cement shipments made by producers provides the total consumption of white cement in
a given year. This calculation assumes that there is no inventory buildup in a given year.
The consumption of white cement is given in Table 4 and the trend over time is depicted
in Figure 3. The data indicates that the consumption peaked in 2007 and since then has
seen declines of 34% and 30% in 2008 and 2009 respectively.
There is no secondary data available on the trends in consumption by product type
of white cement.
19
Table 4: Consumption of white cement in U.S.A.
Year
Total
Consumption
Year over Year
%Change
1994
722.862
1995
704.776
-2.502
1996
656.661
-6.827
1997
783.98
19.39
1998
1119.984
42.86
1999
1116.183
-0.34
2000
1228.136
10.03
2001
1241.408
1.08
2002
1177.478
-5.15
2003
1145.767
-2.69
2004
1508.294
31.64
2005
1795.702
19.05
2006
1787.607
-0.45
2007
1951.591
9.17
2008
1284.16
-34.20
2009
896.038
-30.22
(Source: PCA Plant Information Summary 2008)
20
Figure 3: Consumption of white cement in the U.S. (000 tons)
Total Consumption of white cement in US
2500
2000
1500
1000
500
0
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
Consumption volume by state
There is no secondary data available on the consumption patterns of white cement by
state. We estimate the state-wise breakup in consumption of white cement using data on
Portland Cement usage by state and making some simple assumptions. We estimate the
demand for white cement by state using two different approaches.
a. First, we estimate the ratio of white cement consumption to Portland cement
consumption using aggregate U.S. data on consumption of these two types of
Cement in 2009. We then applied this percentage to each state’s consumption of
Portland grey cement to arrive at the estimated consumption of white cement. The
data on grey cement is taken from USGS Mineral Industry Survey in December,
2009.
b. In the second approach, we estimate the per capita consumption of white cement
in 2009 and apply this number to estimate the white cement consumption based
on each state’s latest population numbers.
21
Table 5: Estimated consumption of white cement by state 2008-2013
Destination
Texas
California
Florida
Illinois
New York
Ohio
Pennsylvania
Louisiana
Georgia
Arizona
Missouri
North Carolina
Virginia
Indiana
Washington
Colorado
Wisconsin
Michigan
Iowa
Oklahoma
Tennessee
New Jersey
Minnesota
Kansas
Alabama
Utah
Nevada
Puerto Rico
Maryland
Kentucky
Nebraska
South Carolina
Mississippi
Arkansas
Massachusetts
Oregon
New Mexico
Connecticut
South Dakota
West Virginia
North Dakota
Idaho
Wyoming
Hawaii
Montana
New
Hampshire
2008
192.37
129.70
78.15
45.15
40.71
39.01
38.26
32.41
42.91
38.24
26.78
31.70
27.83
23.74
27.74
29.01
22.96
24.89
19.50
20.03
22.73
21.97
18.58
18.98
21.26
17.35
22.31
19.27
16.89
14.70
13.23
15.91
14.26
11.96
12.41
12.73
9.78
8.78
6.21
6.91
5.36
7.02
6.78
5.50
4.77
2009
124.50
86.09
47.77
33.67
31.68
29.36
28.30
26.51
24.41
22.62
21.94
20.75
20.04
19.05
18.45
18.03
18.00
17.85
16.74
16.23
15.94
15.12
14.66
14.57
14.43
13.42
12.82
12.65
11.79
11.18
10.71
10.24
10.18
9.30
8.98
8.62
7.04
6.23
5.94
5.26
4.89
4.84
4.59
4.04
3.32
2010
127.49
88.16
48.91
34.47
32.44
30.06
28.98
27.15
24.99
23.16
22.47
21.25
20.53
19.51
18.89
18.46
18.44
18.28
17.14
16.62
16.32
15.48
15.01
14.92
14.78
13.74
13.13
12.96
12.08
11.45
10.97
10.49
10.42
9.52
9.19
8.82
7.21
6.38
6.08
5.38
5.01
4.96
4.70
4.13
3.40
2011
136.05
94.07
52.20
36.79
34.62
32.08
30.92
28.97
26.67
24.71
23.98
22.68
21.90
20.82
20.16
19.70
19.67
19.51
18.29
17.73
17.41
16.52
16.02
15.92
15.77
14.67
14.01
13.82
12.89
12.22
11.70
11.19
11.12
10.16
9.81
9.42
7.69
6.81
6.49
5.74
5.34
5.29
5.01
4.41
3.63
2012
147.47
101.98
56.58
39.88
37.53
34.77
33.52
31.40
28.91
26.79
25.99
24.58
23.74
22.57
21.85
21.36
21.33
21.15
19.83
19.22
18.88
17.91
17.37
17.25
17.10
15.90
15.19
14.99
13.97
13.24
12.69
12.13
12.06
11.01
10.63
10.21
8.34
7.38
7.03
6.23
5.79
5.74
5.43
4.78
3.94
2013
175.20
121.15
67.22
47.37
44.58
41.31
39.82
37.30
34.35
31.83
30.88
29.20
28.21
26.81
25.96
25.37
25.33
25.12
23.55
22.84
22.43
21.28
20.63
20.50
20.31
18.89
18.04
17.80
16.59
15.73
15.07
14.41
14.32
13.09
12.63
12.13
9.90
8.77
8.36
7.40
6.88
6.81
6.45
5.68
4.67
3.65
2.55
2.61
2.78
3.02
3.59
22
Maine
Alaska
DC
Delaware
Rhode Island
Vermont
Total shipments
3.31
2.03
2.33
2.56
1.93
1.58
2.44
2.14
1.71
1.63
1.39
1.23
2.50
2.19
1.75
1.67
1.43
1.25
2.67
2.34
1.86
1.78
1.52
1.34
2.90
2.53
2.02
1.93
1.65
1.45
3.44
3.01
2.40
2.29
1.96
1.72
1284.16
895.83
917.33
978.89
1061.11
1260.60
Table 5 shows the estimates of white cement consumption in each state using the
first method which is based on applying a ratio of white cement to grey cement
consumption. We sorted the states in decreasing order of consumption. The total white
cement consumption adds up to 1284,160 tons in 2008 and 895,830 tons in 2009
consistent with the annual consumption numbers reported in Table 4. The small
differences between the numbers are due to rounding off errors.
We then project the anticipated demand for white cement using forecasts made by
the industry expert Mr. Ed Sullivan from Portland Cement Association who projected
that the annual demand for grey cement would increase each year by 2.4%, 6.71%, 8.4%
and 18.8% during the 2010-2013 period. These forecasts were made after taking into
account potential growth in construction of residential, non-residential and public
construction projects. We apply these percentages to white cement assuming that the ratio
of white cement to grey cement consumption will not change during this period.
From Table 5, we see that the white cement consumption will increase steadily in
the next four years to 1,260,000 metric tons in 2013. About 50% of the total demand for
white cement will be concentrated in the top ten states – Texas, California, Florida,
Illinois, New York, Ohio, Pennsylvania, Louisiana, Georgia and Arizona. The top two
states account for about 23.5% of the total demand.
To verify our statewide estimates, we used a second approach based on per capita
consumption of white cement to arrive at another set of estimates for white cement
consumption. Table 6 and Figure 4 present the trend in per capita consumption of white
cement from 2000 to 2009. We notice that the per capita consumption was 4.35 Kg in
2000 and it increased to 6.47 Kg during the construction boom in 2007 and then declined
to 2.92 Kg in 2009. We apply this number (2.92 Kg per person) to each state’s population
numbers to arrive at estimates for state wide consumption of white cement.
23
Table 6: Per capita consumption of white cement in the U.S.
Year
Per capita consumption of White cement (Kg)
2009
2.92
2008
4.22
2007
6.47
2006
5.98
2005
6.07
2004
5.15
2003
3.95
2002
4.09
2001
4.35
2000
4.35
Figure 4: Trend in per capita consumption of white cement in the U.S.
Per capita consumption of white
cement
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
1998
2000
2002
2004
2006
2008
2010
Table 7 presents estimates from this calculation and we see that Texas and
California are the top two states. There is some variation in numbers between this table
and those estimated using the first method. The top five states accounting for 37% of
white cement consumption in 2009 are California, Texas, New York, Florida and Illinois.
The consistency between the estimates obtained from the two approaches provides a
measure of robustness of the estimation.
24
Table 7: Population and per capita consumption based estimates
State
Consumption
of white
cement
Population
(millions)
% of total white
cement
.California
36.96
107.93
0.12
.Texas
24.78
72.36
0.20
.New York
19.54
57.06
0.26
.Florida
18.54
54.13
0.33
.Illinois
12.91
37.70
0.37
.Pennsylvania
12.60
36.81
0.41
.Ohio
11.54
33.70
0.45
.Michigan
9.97
29.11
0.48
.Georgia
9.83
28.70
0.51
.North Carolina
9.38
27.39
0.54
New Jersey
8.71
25.43
0.57
.Virginia
7.88
23.02
0.59
.Washington
6.66
19.46
0.62
.Arizona
6.60
19.26
0.64
.Massachusetts
6.59
19.25
0.66
.Indiana
6.42
18.76
0.68
.Tennessee
6.30
18.39
0.70
.Missouri
5.99
17.48
0.72
.Maryland
5.70
16.64
0.74
.Wisconsin
5.65
16.51
0.76
.Minnesota
5.27
15.38
0.77
.Colorado
5.02
14.67
0.79
.Alabama
4.71
13.75
0.81
.South Carolina
4.56
13.32
0.82
.Louisiana
4.49
13.12
0.84
.Kentucky
4.31
12.60
0.85
.Oregon
3.83
11.17
0.86
.Oklahoma
3.69
10.77
0.87
.Connecticut
3.52
10.27
0.89
.Iowa
3.01
8.78
0.90
.Mississippi
2.95
8.62
0.91
.Arkansas
2.89
8.44
0.91
.Kansas
2.82
8.23
0.92
.Utah
2.78
8.13
0.93
.Nevada
2.64
7.72
0.94
.New Mexico
2.01
5.87
0.95
.West Virginia
1.82
5.31
0.95
.Nebraska
1.80
5.25
0.96
25
.Idaho
1.55
4.51
0.96
.New Hampshire
1.32
3.87
0.97
.Maine
1.32
3.85
0.97
.Hawaii
1.30
3.78
0.98
.Rhode Island
1.05
3.08
0.98
.Montana
0.97
2.85
0.98
.Delaware
0.89
2.58
0.99
.South Dakota
0.81
2.37
0.99
.Alaska
0.70
2.04
0.99
.North Dakota
0.65
1.89
0.99
.Vermont
0.62
1.82
1.00
.District of Columbia
0.60
1.75
1.00
.Wyoming
0.54
1.59
1.00
307.01
896.46
Imports
In Table 8, we report the quantity of white cement imported into various customs
ports in the United States. Detroit, Michigan and Miami, Florida are the top two import
destinations for white cement accounting for about 43% of imports. In Texas, the main
ports are Laredo, Houston and El Paso. New York is serviced by Buffalo and New York
City. White cement for California comes into Los Angeles and San Francisco. The total
quantity of imports was 683,038 tons with a customs value of $100.7 million or an
average customs value of $147.45 per ton.
Table 8 : Import Volume in 2009 by Customs port (metric tons)
Customs Port
Detroit
State
Cumulative
Percentage
Quantity
MI
181322
0.27
Miami
FL
112471
0.43
Laredo
TX
85021
0.55
Buffalo
NY
70120
0.66
Tampa
FL
47493
0.73
Houston
TX
42655
0.79
Los Angeles
CA
32665
0.84
New York City
NY
24685
0.87
El Paso
TX
23089
0.91
New Orleans
LA
20668
0.94
San Juan
PR
19305
0.97
26
San Francisco
CA
15217
0.99
Norfolk
VA
3348
0.99
Savannah
GA
2997
1.00
Anchorage
AK
1519
1.00
Ogdensburg
NY
205
1.00
Great Falls
MT
100
1.00
Pembina
ND
96
1.00
Nogales
AZ
40
1.00
Portland
ME
21
1.00
St. Albans
VT
1
1.00
Total:
Quantity
683038
Value
$ 100,715,129
$ 147.45 per
ton
In Table 9, we report the quantity, customs value and C.I.F. value of white cement
imported into the U.S. from each of the countries during the 2007 – 2009 period. Canada
is the single largest supplier of white cement to U.S.A. mainly from Federal White
Cement. They supplied 407,000 tons in 2007 but the volume declined to 251,000 tons by
2009, a decline of 38.3% in two years. Mexico is the second largest supplier and their
volume has shrunk from 285,000 tons to 127,000 tons (a decline of 55%). China was a
major supplier in 2007 but its share of the white cement market seems to have shrunk
significantly by 2009 possibly due to its quality problems. Turkey, Denmark and Egypt
are the next largest suppliers. Turkey and Egypt have been steady in their supply of white
cement between 2007 and 2009 with Turkey seeing a slight increase in volume. Denmark
saw a 70% decline in volume in this period. The decline in total imports between 2007
and 2009 is 58.4%.
Table 9: Imports of white cement by country of origin 2007-2009
2007
Country
Quantity
(000
tons)
Customs
value ($
000)
2008
CIF
value ($
000)
Quantity
Customs
value
2009
CIF
value
Algeria
Quantity
Customs
value
13
2123
Canada
407
45164
46399
296
40213
41086
251
34681
China
403
30284
50747
88
15869
19697
29
4125
Colombia
72
7393
9078
62
7020
8941
23
4277
Denmark
227
18211
27501
99
9747
14875
69
12299
27
Egypt
57
4539
7796
55
4724
7087
53
7628
285
35268
39771
254
31203
35679
127
19572
Spain
27
2865
4266
Taiwan
43
1735
3765
Thailand
41
4521
7191
29
3536
5530
18
3249
Turkey
79
6172
8947
96
5257
12201
95
12219
108
148
6
1526
1957
5
540
156260
205609
985
119095
147053
683
100713
Mexico
Other
1641
In Table 10, we see the trend in prices of white cement per ton during the period
2007-2009. Canada has a customs value of $136 per ton but the C.I.F. value is $139 per
ton possibly reflecting lower transportation costs. There is trend of increase in prices as
seen in the C.I.F. value per ton between 2007 and 2009. For instance, there is a 10%
increase in C.I.F. value per ton of white cement imported from Mexico and a 21%
increase in C.I.F. value per ton of white cement imported from Canada.
Table 10: Customs value per ton, C.I.F. value per ton of white cement by country
2007-2009
2007
Country
Value per
ton ($)
2008
CIF per ton
($)
Value per
ton
2009
CIF per
ton
CIF per ton
Algeria
Percentage increase
in CIF per ton (2009
over 2007)
163.31
110.97
114.00
135.85
138.80
138.17
21.2%
75.15
125.92
180.33
223.83
142.24
12.9%
Colombia
102.68
126.08
113.23
144.21
185.96
47.5%
Denmark
80.22
121.15
98.45
150.25
178.25
47.1%
Egypt
79.63
136.77
85.89
128.85
143.92
5.2%
Mexico
123.75
139.55
122.85
140.47
154.11
10.4%
Spain
106.11
158.00
Taiwan
40.35
87.56
Thailand
110.27
175.39
121.93
190.69
180.5
2.9%
78.13
113.25
54.76 *
127.09
128.62
13.6%
254.33
326.17
108.00
120.91
149.29
147.46
Canada
China
Turkey
Other
95.22
125.29
*Seems to be low. There may be an error in the reported value.
Distribution
28
17.68%
There is very limited data on the distribution of white cement as it represents a
small fraction of the overall cement distribution. Most companies that sell Portland grey
cement from their terminals and sales offices are able to cater to the demand for white
cement from these locations.
Lehigh Cement which focuses on white cement production, has three white
cement terminals located at Riverside, California, Waco, Texas and York, Pennsylvania.
Federal White Cement, Canada has divided the U.S. into five zones (as shown in the map
of U.S.A.) and serves these from Emmaus and Bellwood in Pennsylvania, Upland in
California, Jefferson in Georgia, Boca Raton in Florida and Woodstock and Vancouver in
Canada. Texas and Florida are serviced from Boca Raton, FL. All the red colored states
come under the office in Upland, CA. The pink states are served from Bellwood, PA. The
green states are served from Emmaus, PA. Jefferson, GA caters to the states marked in
yellow.
FEDERAL WHITE CEMENT DISTRUBUTION
29
Table 11 lists distribution centers and sales offices of other competitors. Other
than Federal White Cement and Lehigh Cement, all company locations primarily supply
Portland grey cement but it is assumed that they can supply white cement as well. Where
data is available on the location of sales offices, these are indicated separately.
Since the transportation cost is a significant portion of the cost of cement most
terminals are located near ports and waterways since transport by waterways is cost
efficient. Trucks and rail are used to transport the cement to the customer locations from
these terminals.
30
Table 11: Competitors, Terminals and Sales offices
White Cement Distribution (from PCA website)
Company
Distribution
terminals
State
Lehigh White Cement
Riverside
Buzzi Unichem
Distribution
terminals
State
Sales Offices
State
CA
Irving
TX
Waco
TX
UnionBridge
MD
York
PA
Birmingham
AL
Glens Falls
NY
Allentown
PA
Atlanta
GA
Elkhart
IN
Bethlehem
PA
Knoxville
TN
Oklahoma
OK
Chesterfield
MO
Amarillo
TX
Fort Wayne
IN
Stockerton
PA
Little Rock
AR
Orange
TX
Chattanooga
TN
Bonner Springs
KS
Independence
KS
Indianapolis
IN
Memphis
TN
Paducah
KY
Joliet
IL
Brandon
MS
Indianapolis
IN
Bonner Springs
KS
Burnside
LA
Pensacola
FL
Memphis
TN
Jeffersonville
IN
Dallas
TX
Milwaukee
WI
Natchez
MS
Cincinnati
OH
Dawsonville
GA
Nashville
TN
New Orleans
LA
College Park
GA
St. Louis
MO
Cape Girardeau
MO
Maryneal
TX
Chattanooga
TN
Oglesby
IL
Festus
MO
Pryor
OK
Greencastle
IN
Capital Aggregates
San Antonio
TX
Cemex
Houston
TX
Knoxville
TN
Birmingham
AL
Fairborn
OH
Clinchfield
GA
Milwaukee
WI
Louisville
KY
Howell
MI
Odessa
TX
Brooksville
FL
Wampum
PA
New Braunfels
TX
ESSROC Cement Corp.
Nazareth
PA
Essexville
MI
(Italcementi group)
Martinsburg
WV
San Juan
PR
Bessemer
PA
Front Royal
VA
Buzzi Plants
31
Speed
IN
Frederick
MD
Middlebranch
OH
Logansport
IN
Vancouver
BC
Upland
CA
Woodstock
ON
Jefferson
GA
Bellwood
PA
Boca Raton
FL
Emmaus
PA
Herndon
VA
Atlanta
GA
Lansing
MI
Harleyville
SC
Franklin
TN
Baltimore
MD
Lee's Summit
MO
Westborough
MA
Brookfield
WI
Chesapeake
VA
Maumee
OH
Ravena
NY
Davenport
IA
Tulsa
OK
Valley City
ND
Calera
AL
Houston
TX
Chesapeake
VA
Long Beach
CA
Lake Park
FL
Savannah
GA
Stockton
CA
Rinker Materials Corp.
West Palm Beach
FL
St. Lawrence Cement Co.
Albany
NY
Monarch Cement Co
Humboldt
KS
Titan America LLC
Norfolk
VA
Medley
FL
Federal White Cement
LaFarge North America
Royal White Cement
Table 12 lists names of possible white cement suppliers in U.S.A. based on data pulled
from www.alibaba.com. These companies do not engage in production of cement but act
as distributors of local or imported white cement. This is not an exhaustive list of
suppliers. Their sales data is not available.
32
Table 12: Names of other distributors of white cement (from Alibaba.com)
Supplier’s Name
AVITTOR INTERNATIONAL CORP
MI
Bloomfiled Hills
FL
Fort Lauderdale
FL
Pembroke Pines
NY
NY
Exquisite Import/Export Trading
Company, Inc. - D/B/A - ETC Logistics
(USA)
OVERSEAS DIRECT IMPORT CO
LTD
NuMill Industries
Shamrock Imports-Exports LLC
Alpha Omega International I&E
Banah International Group
Fama llc
Alpha Omega International I&E
Mabrouka, Inc
ALFRED CEMENT DISTRIBUTION
COMPANY Inc.
Gbm USA Inc.
33
Appendix. Original The client project requirements.
34