The Africa Bitumen Market is estimated to be valued at US$ 418.71 Mn in 2020 and is expected to exhibit a CAGR of 5.3% over the forecast period from 2021 to 2028, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Bitumen is a semi-solid form of petroleum which is highly viscous and can be moldable. It is used in various construction applications such as road construction and waterproofing. The increasing infra development activities across the region are fueling the demand for bitumen in Africa.
Market key trends:
One of the major trends driving the growth of Africa bitumen market is increasing investments in road infrastructure projects. Various countries in Africa such as Nigeria, South Africa, Kenya etc. are investing heavily in development and upgrading of road networks. For instance, Nigeria government has planned to invest around US$ 2.7 billion over the next 3 years to construct and rehabilitate nearly 13,000 kilometers of federal roads across the country. Such increasing focus on infra development is expected to significantly boost the consumption of bitumen in road construction activities in Africa over the forecast period.
Porter’s Analysis
Threat of new entrants: Low barrier of entry in bitumen market in Africa due to availability of raw material. However, established players have advantage of brand name and distribution channels.
Bargaining power of buyers: Buyers have moderate bargaining power due buyers like road construction companies have limited alternatives for bitumen.
Bargaining power of suppliers: Suppliers have moderate power due to availability of raw material reserves from a few suppliers globally. However, production capacity expansion can impact prices.
Threat of new substitutes: Limited threat as bitumen has well established applications and no cost effective substitutes available for usage in roads construction.
Competitive rivalry: High due to presence of petroleum companies and construction material suppliers competing on pricing and quality.
SWOT Analysis
Strength: Availability of crude oil reserves and investments in refining assets by key players. Rising road infrastructure projects provide increased demand.
Weakness: High dependence on imports to meet demand-supply gap. Vulnerable to volatility in crude oil prices. Lack of local manufacturing capacity.
Opportunity: Growing population and urbanization driving road construction activities. Government focus on upgrading transport infrastructure offers scope.
Threats: Economic and political instability in certain African countries pose project delays. Rising competition from alternatives like cement for construction.
Key Takeaways
The Africa bitumen market is expected to witness high growth, exhibiting CAGR of 5.3% over the forecast period, due to increasing road construction activities across the region. The fastest growing regional market is expected to be East Africa registering a CAGR of over 6% primarily due to rising infrastructure projects in countries like Ethiopia, Kenya and Tanzania.
Key players operating in the Africa bitumen market are Exxon Mobil Corporation, Royal Dutch Shell Plc., RAHA Bitumen, Inc., Tekfalt Binders (Pty) Ltd., SprayPave, Indian Oil Corporation Ltd., GOIL Company Limited, Wabeco Petroleum Ltd., Tiger Bitumen, and Richmond Group. Exxon Mobil captured around 25% market share in 2020 owing to huge reserves and supply contracts with major construction companies.
Regional analysis indicates East Africa as the fastest growing market for bitumen consumption particularly in Ethiopia, Kenya and Tanzania. This is attributed to rising FDI inflows for transportation projects under China’s Belt and Road Initiative. The governments growing focus on upgrading road networks to support trade and economic growth bodes well.
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