Like many others, the cement industry faced significant challenges during the COVID-19 pandemic. As building sites closed and infrastructure development came to a sudden halt, so did the demand for materials that supported them. Now, as we enter a period of cautious recovery and construction starts to resume, the cement industry has the opportunity to take stock of the landscape in which it operates and consider where opportunities, and challenges, lie ahead.
Cement is the backbone of social and economic development, a key marker for the United Nations’ Sustainable Development Goals. The product is used to build essential infrastructure including roads, houses, schools, and hospitals – which lay the foundations for the provision of health and education services, create opportunities for employment and contribute to the overall wellbeing of society. The cement industry, though often overlooked, plays a significant role in bringing social and economic sustainability to communities.
As the owner of NEQSOL Holding, a group of companies with significant experience in the cement industry, I am very familiar with the opportunities that it presents and as new opportunities emerge, we are seeking to expand our presence in the industry.
Despite increased investment in recent years, the infrastructure gap between Eastern and Western Europe remains stark. A recent study by the International Monetary Fund (IMF) – “Infrastructure in Central, Eastern, and Southeastern Europe” – found that Eastern European countries would need to dedicate between 3% and 8% of their GDPs each year towards new infrastructure projects, from now until 2030, if they want to bridge 50% of the infrastructure gap with 15 of the most developed countries of the European Union. This prompted calls by IMF economists to reiterate the importance of infrastructure spending for a country’s road to economic recovery and development.
Encouraging infrastructure development has long been considered a valuable tool to inject growth into economies, and in the wake of the COVID-19 pandemic, countries in emerging Europe will be looking to leverage this tool. Cement companies must capitalise upon this opportunity – not just for our businesses, but for our communities, too.
Some countries are already taking note. A report by Global Data found that Eastern Europe’s investment into infrastructure was set to rise significantly over the next two years. Poland, Croatia, and the Czech Republic have all been cited as countries leading the way in speeding up investments in infrastructure development to reform their economies for good.
This is positive news for the industry, which forms a key part of our business operations at NEQSOL Holding. Companies such as Norm, one of our subsidiaries, will play a vital role in the necessary infrastructural development in emerging Europe.
As the only API approved cement plant in the South Caucasus, Norm has firmly established its reputation within European circles for the special attention it pays to the quality of cement its plant produces. The company is an active member of the European Cement Research Academy (ECRA) and has worked closely with Germany’s world-renowned VDZ Research Institute. The business is currently executing plans to increase its cement portfolio to better serve local construction industries and support the application of modern construction technologies.
As investors, we must also take this opportunity to mitigate potential challenges and futureproof the industries in which our businesses operate. We need to ramp up efforts to digitise its cement plants – prioritising sustainability and consciously reducing its carbon footprint.
It is vital that we make the most of the opportunities presented to the cement industry, support infrastructure development, and invest in local communities and provide jobs.
Increasing infrastructure investment demands in Eastern Europe present a significant opportunity, but if we are to truly capitalise upon this, we must make sure that we are taking the time to futureproof, too.
