Hanson Cement comment: Q2 2016

Jim Claydon, Managing Director Hanson Cement is BMBI’s Expert for Cement & Aggregates.     

The market for heavy building materials in Q2 is up on last year, but cement and aggregates has been less buoyant, with trade flat or slightly down. It slowed in the run-up to the EU Referendum vote, and uncertainty led to delays and postponements for major contracts and commercial projects.

In product usage there has been a continuing trend via merchants for ready-mixed products and the use of plastic packaged cement. These are key growth opportunities for merchants, offering the chance to sell higher value, higher margin products.

There are indicators that merchants who position products to maximise sales see better returns. The difference between merchants who use this approach and those who don’t may become more marked as the market improves. When things get busier and there’s a high turnover of stock, products are more likely to be dumped in the yard wherever there’s space – unless there’s a plan already in place.

Keeping associated products together, for example, placing cements, aggregates and sands close to brickwork and blocks makes the purchasing journey easier for builders and contractors. They can pick up all they need in one area without driving round the yard – or miss something and have to go elsewhere. This also gives the merchant the opportunity to upsell. Manufacturers should provide information and training for merchants to help identify where and how to optimise sales by careful positioning and use of POS material.

Safe as houses

Aside from market trends, Health and Safety remains a big issue. Construction has had to work hard to improve safety throughout the supply chain. Companies who move large loads by HGV for example, face serious issues; there are still fatalities reported. To address this issue in the Cement and Aggregates sector, the Mineral Products Association (MPA) has just published a Driver’s Handbook, developed by members. It covers legal requirements for drivers and vehicles, and offers advice on emergency situations and general good practice.

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Launched in 2015, the award winning monthly Builders Merchant Building Index (BMBI) report is the only reliable measure of repair, maintenance & improvement (RMI) activity in the UK. Filling an important gap, it can be widely used in construction, and by economists, Government, national media, commentators and influencers outside the industry.

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