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Dominican supply to continue to outweigh demand

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World Cement,

Cement demand in the Dominican Republic, the Caribbean’s largest cement market, is projected to grow by 4.5% annually to reach nearly 5 million t by 2021, according to a new report from CW Research. Despite this, demand will remain well below an installed capacity of 8 million t, leaving Dominican producers reliant on exports.

Domestic demand will be supported by large-scale infrastructure projects, such as highways, roads and bypasses, as well as the building of affordable housing and tourism-related construction. Construction is expected to rise to some 10% of GDP by 2021.

“Despite the strengths and opportunities of the highly consolidated Dominican cement market, there are some possible impending threats,” said CW Research’s Senior Consulting Analyst, Raluca Cercel.

On the domestic front, high levels of red tape and issues around the supply of electricity will pose challenges to the industry. Meanwhile, tense relations with neighbouring Haiti, which is the largest foreign market for Dominican cement, also pose a risk, as do fluctuations in the price of gold, one of the country’s top exports.

In 2016, the Haitian government sought to stem Dominican imports arriving by road, despite insufficient local production. Nevertheless, more than 80% of Dominican cement exports were shipped to its closest neighbour in 2016, CW Research said.

There are currently seven cement companies operating in the Dominican Republic. Cementos Cibao, Cemex, Domicem, and Estrelle operated integrated cement plants, while Argos, Cementos La Union and Cementos Andinos Dominicanos operate grinding facilities.

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