April 24, 2024

Africa Bitumen Market Driven By Growing Road Infrastructure Development

Bitumen is a semi-solid form of petroleum that is widely used in road construction activities such as paving and sealcoating. It is a highly viscous liquid or semi-solid form of petroleum that is black and sticky. Bitumen is produced from selected crude oils through fractional distillation. It is used as a binder in asphalt concrete and other oil-based products. Africa has witnessed considerable growth in road infrastructure development over the past decade owing to rapid urbanization and industrialization. Several projects aimed at decongesting cities and improving inter-city connectivity have bolstered the demand for bitumen in construction activities. Demand from activities related to maintenance and repairs of the existing roads is another key aspect augmenting consumption.

The global Africa Bitumen Market is estimated to be valued at US$ 2.5 Billion in 2023 and is expected to exhibit a CAGR of 23% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.

Market key trends:

Several African countries are investing heavily in road connectivity to augment economic and social development. As per the African Development Bank, the total spending on transport infrastructure projects in Africa is expected to exceed $100 billion by 2025. Moreover, regional economic blocs such as South African Development Community (SADC) and East African Community (EAC) have outlined massive road construction plans to strengthen regional trade ties. For instance, the North-South Corridor project connecting major South African ports to Central and East Africa involves construction of over 13,000 kilometers of roads. Such large-scale projects indicate bright growth prospects for the bitumen market over the forthcoming years. Furthermore, technology advancements enabling utilization of modified bitumen for varied applications from pavements to waterproofing will present new opportunities. However, volatility in crude oil prices remains a key challenge for market participants.

Porter’s Analysis
Threat of new entrants: The threat of new entrants in the Africa Bitumen market is low as it requires significant investment and production facilities to enter this market.

Bargaining power of buyers: The bargaining power of buyers is moderate in this market as bitumen has applications in construction industry which limits alternatives.

Bargaining power of suppliers: The bargaining power of suppliers is high as raw materials used to produce bitumen have few substitutes and suppliers can influence prices.

Threat of new substitutes: The threat of substitutes is low as bitumen has established its use in construction and infrastructure industry in Africa with limited replacement options.

Competitive rivalry: Competition in the market is high as key players compete on pricing, quality and expanding production capacity.

Key Takeaways
The Global Africa Bitumen Market Size is expected to witness high growth over the forecast period.

Regional analysis – The Middle East & Africa region currently dominates the Africa bitumen market and is expected to maintain its leading position during the forecast period. Countries like South Africa, Nigeria, Egypt etc. offer significant growth opportunities owing to rising investments in road networks, railway tracks, and buildings construction.

Key players – Key players operating in the Africa Bitumen market are Shell Bitumen, Nynas, PetroChina, BP, Gazprom Neft and Valero Energy. The players are adopting strategies like mergers, acquisitions, and capacity expansion to improve their presence in the Africa region.

Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it