Serbia could become dependent on imported cement, because trends in the production and consumption of that construction material indicate that the capacities of domestic cement plants will not be able to meet domestic demand, according to the analysis of the Commission for the Protection of Competition. Although Serbia is increasing its production, production capacities remain unchanged, so the average degree of industrial capacity utilization has increased from 60 percent in 2018 to 75 percent in 2021.
The entry of “new players” into the cement production industry is difficult, the expansion of existing capacities is “impossible in the short term and without major investments”, which could lead to import dependence and a (further) increase in the price of cement, the Commission points out.
The production of gray (portland) cement in Serbia grew at an annual rate of eight percent from 2018 to 2021. Thus, the production in 2021 was 26 percent higher than the production achieved in 2018, Nova ekonomija reports. Domestic producers place the largest part of cement (95 percent of the total produced quantities) on the market in Serbia, while the remaining five percent is exported.
The total sale of domestically produced cement in 2021 was 33 percent higher than the sales realized in 2018 and 67 percent higher than the sales in 2014. At the same time, domestic consumption of cement grew at an average annual rate of about ten percent.
The growth of production and sales from 2018 to 2021 was accompanied by an increase in the producer price of gray cement by up to 13 percent. The reason for the price increase is the sudden increase in fuel and energy costs, which account for about 50 percent of the production price of the cement plant.
The Commission’s conclusion after the conducted analysis is that the cement production market is a very highly concentrated market, both in terms of available installed capacity for cement production, and in terms of the achieved volume of production.