Heidelberg Materials Comment: Q1 2025

It’s been a robust start to the year, with bagged cement products for RMI in high demand, and bulk aggregate sales also starting well. The forecast was gloomy, but Q1 is performing better than anticipated – for us at least.

First quarter market figures, from the Mineral Products Association, showed a gradual recovery in housebuilding pushed mortar sales up +3.8% quarter-on-quarter, and primary aggregates increased +0.5% compared to Q4 2024. However, both ready-mixed concrete and asphalt declined -6.3%. Ready-mixed concrete is at its lowest sales volumes for 60 years.

However, the MPA is still expecting growth this year of around +2% across most market, driven in part by infrastructure. With the Thames lower crossing, Sizewell C, extensions to Heathrow, Gatwick and Luton airports, a ‘Silicon Valley’ corridor of development between Oxford and Cambridge and the redevelopment of Old Trafford, there’s a healthy pipeline of projects in the offing.

The big talking point for us this year will not be Trump’s tariffs, as we make and sell products domestically, but sustainability. As I write, we’re waiting to hear whether we have planning permission for a carbon capture plant (CCP) at our Padeswood cement works in north Wales.

If it’s a green light, it will be a first for UK cement, allowing us to produce zero carbon cement – something we thought could never be done. It will be a game changer for British construction, capturing 800,000 tonnes of carbon dioxide a year. The CCP project will boost the local economy and create 500 jobs in the area during construction, plus a further 50 new full-time roles once it’s operational.

Zero carbon cement will become very important to Merchants. We were swamped at FutureBuild with visitors wanting to know more about low and zero carbon aggregates. Merchants knowing there is a market for sustainable products is one thing, but what about the impact of trading with us as a partner? In time Merchants will almost certainly need to record scope 3 emissions – those produced by up and downstream suppliers – so stocking sustainably produced product lines will be a must. It is time for construction and its supply chains to make good on climate commitments.

We’re excited to see what’s next on our sustainability journey in 2025.

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