Last Year Was a Good One, 2020 Could Be as Well.

By Mauro Nogarin

With economic growth of 3.3% in 2019, Colombia registered one of the highest rates in the Latin American region. The economy has been dynamic in different productive sectors, showing good stability, contrary to the economic situation in neighboring countries, which continue with many difficulties.

The main reasons that boosted its economy were the growth of Foreign Direct Investment (FDI), an index that has shown increases of more than 25%, which has also made it possible to improve tax collection.

In Colombia almost all the productive sectors, consumption and private investment rebounded. There was even a slight acceleration in the second half of 2019, despite social protest and national unemployment, in the fourth quarter there was no drop in economic activity.

Surely 4G projects managed by the National Infrastructure Agency (ANI) played a very important role in cement demand. Although many of those works were delayed for different reasons. However, currently the 22 highways until the end of 2020 will have an advance of more than 80%.

In 2020, public works will boost the cement industry with the approval of the fifth generation of concessions, made up of 12 large projects that together encompass an investment of more than $5 billion dollars.

The 16.5% increase in the price of gray cement registered in the fourth quarter of last year and the rise in prices of other construction materials did not affect this sector.

The overall cost index for construction materials in 2019 was 2.84%, increasing by 0.35 percentage points in the first three months of 2020.

According to data from the Statistics Institute (DANE) in February 2020, the production of gray cement nationwide was 1,037,300 tons, which represented an increase of 5.3% compared to the same month of 2019. While in the same month, 1,024,500 tons of gray cement was dispatched to the national market, which meant a growth of 5.3% compared to February 2019.

The trend for the period January-February 2020, where gray cement production reached 2,078,400 tons, was also positive, generating growth of 8.7% compared to the same period of the previous year.

Shipments to the national market accumulated 2,020,000 tons, resulting in a variation of 6.9% compared to the period January-February 2019.

While in the period March 2019 to February 2020 (last 12 months), the production of gray cement totaled 13,160,500 tons, registering an increase of 5.2% compared to the period March 2018-February 2019. On the other hand, shipments of gray cement to the national market reached 12,645,600 tons, presenting an increase of 5.1% compared to that registered in the period March 2018 to February 2019.

Regarding national shipments In February 2020 compared to February 2019, the result of total shipments of gray cement was mainly explained by the increase in the distribution channel of builders and contractors (10.8%), which contributed 2.1 percentage points to the variation total, 5.3%.

The Colombian construction chamber in its latest report for January 2020 confirms that the real estate market is still in good condition.

According to the new report prepared by the construction chamber (CAMACOL), the performance of the construction industry in 2019 showed a good trend with a participation of 8.1% in the country’s GDP.

The 16.5% increase in the price of gray cement registered in the fourth quarter of last year and the rise in prices of other construction materials did not affect this sector.

The overall cost index for construction materials in 2019 was 2.84%, increasing by 0.35 percentage points in the first three months of 2020.

Among the most outstanding investments in the cement sector in Colombia, it is worth mentioning the new alliance between Corona and Cementos Molins, which now have a 10% market share with a production of 1.5 million tpy with an investment of $380 million.

While it is still too early to gauge the impact of COVID-19 on the construction market, Columbia looks to be in better shape than some other Latin American countries, with 57,000 confirmed cases and more than 1,800 deaths.

Mauro Nogarin is Rock Products’ Latin American correspondent.

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