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Portland Cement Sector, 2007

U.S. Market Overview

The Portland Cement Industry produces the powdered cement that is mixed with sand, gravel, and water to form concrete. Cement manufacturing plants are massive industrial operations that require investments in the hundreds of millions of dollars in addition to major investments in infrastructure and environmental protection.

The United States is the world’s second-largest market for cement and is the largest importer of cement. Although the U.S. industry produced 94 million metric tons of cement in 2005, imports accounted for 23 percent of consumption. The United States has a chronic deficit in cement, chiefly because of its large and growing construction sector.

The U.S. cement industry is a fairly small, but vital component of the U.S. manufacturing sector, with annual shipments of nearly $9 billion. Approximately 40 U.S. firms operate 120 cement plants in 38 states. Overall, the United States is the third leading world producer of cement, behind only China and India.

U.S. cement production has grown more slowly than demand over the past decade. One reason for this is that it has often been cheaper and easier to import cement than to build more capacity. In addition, when cement manufacturers have tried to build new cement plants, they have encountered serious difficulty in obtaining permits because of local concern over environmental effects.

Over 80 percent of U.S. cement-production capacity is owned by foreign investors. This is a dramatic increase over the 1980 level of 22 percent foreign ownership. Investments during the 1980s to the mid-1990s were lead by European companies. However, investments from Asian entities led the way from the mid 1990s to 2000s. Most of these foreign owners are multinational cement manufacturers who can import cement from their overseas plants or buy cement from other foreign producers.