Cement and Concrete Industry: Multiplier Effect on the Economy and their Contribution to a Low Carbon Economy
November 19th, 2015
2 BIPE 2015 - CEMBUREAU - Multiplier Effect Study
Construction industry: severe crisis, now slowly recovering and bound for growth
3 BIPE 2015 - CEMBUREAU - Multiplier Effect Study
Presenter
Presentation Notes
Koen: Let me go back to the study and first introduce to you the consultants that have carried it out. Artabaz Shams who sits next to me, is a Manager with LeBipe, which is part of the Euroconstruct group, and has worked on putting together the data that will be presented to you. He is accompanied by Pascal Marlier and Youssef Yacoubi from LeBipe. Before giving Artabaz the floor, I wanted to specify that we asked our consultants to look at the qualitative data : what are the direct, indirect and induced effects of our activities on the economy but also to look at a qualitative assessment: in which areas of relevance for building tomorrow’s society is our product crucial ? Artabaz: Thank you Koen and welcome to all of you from my side. Let me start with a short contextual statement: we are all aware of the impact of the crisis on the construction sector which has been hit by a double-dip recession. We are optimistic, however a see a slow recovery that will hopefully result in construction output exceeding GDP by 2016-2017. Coupled with a strong focus on sustainable construction, we are hopeful that the construction industry can bring Europe back on the recovery path.
A whole life cycle approach
4 BIPE 2015 - CEMBUREAU - Multiplier Effect Study
Raw materials sourcing Production process End of life Applications
1 2 3 4
Direct impact
Indirect impact
Catalytic effect
Induced impact
Presenter
Presentation Notes
Artabaz: when we zoom in on the methodology we used for the study, let me go back to what Koen said: we looked at both quantitative data, which is the left part of this slide where we were able to collect data on direct employment and added value in the cement and concrete sector as well as on indirect jobs and added value of industries feeding into that sector, such as the aggregates business. We also assessed the so-called induced impact of both direct and indirect impact which looks at the value added generated by all expenditure of employees of all economic operators covered by the direct and indirect group. As we are focusing on the full supply chain and we also try to measure the contribution of our products to the economy, we have adopted a more qualitative approach (right part of this slide) and we will touch upon that in the second part of our presentation.
Multiplier effect of the concrete and cement industry (EU28)
5 BIPE 2015 - CEMBUREAU - Multiplier Effect Study
20 bn€
x 2.8 .
Direct impact
Direct and Indirect impact
Direct, Indirect and Induced
impact
45 bn€
56 bn€
384 Thousand
848 Thousand
1.08 Million
Value added
Jobs
Presenter
Presentation Notes
Artabaz: from our quantitative analysis, we found that the multiplier effect of cement and concrete on the economy is a factor of 2.8% , i.e. EUR 1 value added in cement and concrete results in EUR 2.8 value added for the overall economy. Figures are impressive: EUR 20 bn direct impact result in EUR 56 bn for the overall economy and adding over 1 million people to the workforce!! Again, we’re talking only multiplier of cement and concrete here. According to the Commission’s figures, the construction sector in total employs 20 million people! So, clearly an engine for economic growth !!
Multiplier effect of the concrete and cement industry (CEMBUREAU Region)
6 BIPE 2015 - CEMBUREAU - Multiplier Effect Study
22 bn€
x 2.8 Direct impact
Direct and Indirect impact
Direct, Indirect and Induced
impact
48 bn€
60 bn€
413 Thousand
901 Thousand
1.15 Million
Value added
Jobs
Presenter
Presentation Notes
Artabaz: as CEMBUREAU membership extends to non EU countries, Turkey, Norway and Switzerland , we carried out the same calculation for the whole CEMBUREAU area and we do see the impact of these markets on the overall numbers with added value increasing from EUR 56 bn to EUR 60 bn and employment raising to 1.15 MM people. The multiplier effect stays the same.
Independent from the macroeconomic context
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$99
$62
$80
$111
-8%
-4%
0%
4%
$0
$40
$80
$120
2008 2009 2010 2011
Oil price in $ (Brent Baril, left hand scale) GDP evolution (right hand scale)
2.8 2.9 2.8 2.7 Multiplier effect
Presenter
Presentation Notes
Artabaz: We will not linger on this slide but only wish to point out that the multiplier effect calculated on the basis of added value does not change substantially with underlying macro-economic changes such as changes in the oil price or GDP.
Reduction of CO2 emissions
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Production of cement
719
695
658 641
627
1990 2000 2005 2010 2013
Evolution of CO2 emissions per ton of cement produced in EU28 (kg CO2/ton Grey and white cementitious*)
-13%
61.3
5.4
33.4
Conventional fossil fuels Biomass Alternative fossil fuels
Presenter
Presentation Notes
Koen: when we talk about a full supply chain approach, let’s now leave the numbers and highlight how the downstream product can contribute to the sustainable construction agenda. Before doing so let’s be open about our upstream process: this slide shows a few key facts about the cement industry. Yes, we are emitting CO2, yes, we are covered by EU ETS legislation but we are committed to driving down our emissions. To date, we have replaced 36% of our primary fuels by alternative fuels which we source from different waste streams and we have reduced specific CO2 emissions by 13% between 1990 and 2013. Innovation in our industry will drive down our emissions by 32% by 2050 on the basis of conventional technologies and by 80% of we use breakthrough technologies such as carbon capture and reuse.
Concrete: a low carbon product
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Water 15-20%
Cement 10-15%
Aggregates 65-75%
Composition of concrete by volume
Presenter
Presentation Notes
Koen: what may be unknown to many of you is that our end-product is actually a low carbon product which only contains 10-15% of cement, the rest is water and aggregates. Thanks to its thermal mass properties, concrete can reduce energy consumption, is fully recyclable and is a durable product.
Concrete and construction sector essential to EU objectives
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Reducing the ecological impact Key to the circular economy thanks to its recyclability Waste used as a resource in cement manufacturing Less recourse to primary raw materials Sustainable answer to increases in mobility needs
Energy efficiency of buildings Thermal mass optimization Energy consumption reduced
Safety of citizens Durable – lifespan of over 100 years Fire safety Adaptation to climate change
Presenter
Presentation Notes
Koen: so, our product is uniquely placed to build the society of tomorrow. It’s recyclable, it reduces energy consumption and is durable.
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The catalytic effect of the cement & concrete industry
Presenter
Presentation Notes
Artabaz: we put concrete at the heart of four major societal challenges and we can find applications for each of them which demonstrate the unique characteristics of concrete. Without going into detail on these applications (you find more detailed information in the full presentation) , we highlight a few applications in the final slides.
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The catalytic effect of the cement & concrete industry
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Field : Infrastructure
-4%
Presenter
Presentation Notes
Artabaz: did you know, for instance, that the higher stiffness of concrete creates lower deflection of the road leading to a 4% reduction in fuel consumption?
Concrete tunnels: High durability
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Field : Infrastructure
120 years
Presenter
Presentation Notes
Artabaz: many of you are taking the train to London: fire resistance, impermeability, at least 100 years lifetime ... all requirements for the concrete that has built the tunnel.
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The catalytic effect of the cement & concrete industry
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Field : Energy
20%
Presenter
Presentation Notes
Artabaz: windfarms are another example where durability of concrete plays a key role as it perfectly resists a marine environment and is designed to resist deformation
Hydroelectric dams
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Field : Energy efficiency
45%
Presenter
Presentation Notes
Artabaz: dams, irrigation projects all benefit from concrete which is the only material that can resist high water pressure
18 BIPE 2015 - CEMBUREAU - Multiplier Effect Study
The catalytic effect of the cement & concrete industry
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Field : Sustainable Construction
-60%
Presenter
Presentation Notes
Artabaz: energy efficiency is a strong policy priority and it is now common knowledge that the building sector represents 40% of CO2 emissions in the EU. Well, concrete buildings built with today’s technology can achieve a 60% energy consumption saving compared to buildings built 20 years ago.
Preserving cities
20 BIPE 2015 - CEMBUREAU - Multiplier Effect Study
Field : Sustainable Construction
Presenter
Presentation Notes
Artabaz: ... and let’s end with Venice, the city which will be protected from major flooding for at least a century despite rising sea levels thanks to 78 prefabricated removable concrete boxes. As a footnote: each of these boxes is controlled from land thanks to a ingenious IT system: the living demonstration that IT and industry go hand in hand...
Cement & concrete
Multiplier effect
21 BIPE 2015 - CEMBUREAU - Multiplier Effect Study
Koen: Thank you Artabaz. So, as we said, we would now like to open the debate to a broader audience. I will be happy to hand the floor to Ronnie Hall who will initiate the discussion but, if I may, one of the obvious questions to ask is how to link the multuplier effect in the construction sector to the deficit in infrastructure finance and how to untap the sustainable construction potential to build a stronger European economy.
