Market Trends of Africa Bitumen Industry
Road Construction Industry to Dominate the Market
- The majority of bitumen consumed is processed into asphalt for road construction. Asphalt is a mixture of rock aggregates and bitumen. Bitumen serves as a binding agent and thus, is responsible for the stability of asphalt.
- Depending on the type of bitumen or composition of the mixture used, asphalt roads can be made suitable for regions with different climatic conditions or various levels of operational demands. Asphalt is also used for airport runways, parking decks, and working areas in ports.
- Roadways are one of the key sectors that determine a country's economic growth. Roads, airport runways, and parking decks are essential services that drive economic activity by channelizing trade and mobility. Massive investments are required that help in the modernization and maintenance of these systems.
- The infrastructure activities are expected to increase significantly, especially in the transportation sector, owing to increasing urbanization and shifting focus toward developing the secondary sector in African countries.
- In November 2022, Tanzania started the construction of a key stretch of road and a bridge which is of major significance for East Africa as this stretch provides a missing link in the 225.3 km multinational Arusha-Holili/Taveta-Voi road that links Northern Tanzania to the Kenyan port city of Mombasa. The project will connect the 1,800 km Northern Corridor to the 3,100 km Central Corridor that originates at Tanzania's capital and port city, Dar es Salaam.
- In February 2022, Tanzania National Roads Agency (Tanroads) and Japan International Cooperation Agency (JICA) signed a USD 168.6 million contract to finance the Arusha-Holili Road Improvement Project. The phase of the Arusha-Holili/Taveta-Voi road is slated for completion in 2027.
- According to the Ministry of Planning and Economic Development, Egypt, the number of national and strategic road projects in the 2023 fiscal year's plan includes 45 projects in Egypt, with the inclusion of the construction of 10 transverse axes on the Nile and the establishment of 18 overpasses.
- Moreover, the Trans-West African Coastal Highway, which is a transnational highway project, will link 12 West African coastal nations, from Mauritania in the north-west of the region to Nigeria in the east, with feeder roads already existing to two landlocked countries, Mali and Burkina Faso. According to African Union (AU), the length of the route is 4,560 km of which 83% or 3,777 km has been completed.
- With such transport development projects in the pipeline, the demand for bitumen is expected to be the largest for road construction projects.
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South Africa to Dominate the Regional Market
- The construction industry in South Africa is one of the largest and the most developed on the African continent. In 2022, the construction industry in South Africa contributed an added value of ZAR 107 billion (~USD 5.9 billion) to the country's gross domestic product (GDP).
- According to Statistic South Africa, the value of building plans passed by larger municipalities in South Africa for 2022 was ZAR 117.4 billion (~USD 6.29 billion), representing a 7.7% rise over the previous year.
- Moreover, residential buildings accounted for the major share of investment with ZAR 62.2 billion (~USD 3.33 billion), followed by additions and alterations in both residential and non-residential buildings with ZAR 33.1 billion (~USD 1.77 billion), and non-residential with ZAR 22.1 billion (~USD 1.18 billion).
- Out of the total value passed by the government, ZAR 67.8 billion(~USD 3.63 billion) value of buildings was reported to be completed in 2022, representing a 14.3% increase over 2021. This indicates the growing emphasis on construction activities in the country.
- In the road construction department, in November 2022, a fully evaluated and monitored paving trial on a portion of the M7/P82 near Pinetown, approximately 20 km inland of the coastal city of Durban was carried out using recycled waste and modified bitumen. The trial section was located on the M7/P82 between the Hans Dettman Highway overpass and the Thistle Road underpass and spans 172 m.
- The M7 is a strategic route in eThekwini Metropolitan Municipality that primarily links Durban Harbour with the N3 Durban-Johannesburg National Route, and the usage of recycled waste with modified bitumen will pave the way for other such projects.
- In February 2023, the South African National Roads Agency Limited (Sanral) announced an investment more than ZAR 60 billion (~USD 3.21 billion) on road infrastructure projects in the Eastern Cape over the next five years.
- Some of the notable projects under construction include:
- Upgrading of R63 Section 13 from Fort Beaufort to Alice
- Upgrading of the R67 from Swart Kei river to Komani (formerly Queenstown)
- The construction of the N2 Wild Coast Road Msikaba Bridge and,
- The construction of the N2 Breidbach and Belstone interchanges.
- Sanral has already invested over ZAR 8 billion (~USD 430 million) on road construction projects in the Eastern Cape in 2022.
- Courtesy of the rapid development projects in road and infrastructure in the country, the demand for bitumen is expected to grow significantly in the coming years.
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