São Paulo – Production of sand and gravel, important raw materials for civil construction, totalled 423 million tonnes in 2007, with revenues of 9.4 billion reals (US$ 3.9 billion), being 4.6 billion reals (US$ 1.9 billion) for sand and 4.8 billion reals (US$ 2 billion) for brita. The official results for 2008 have not yet been disclosed, but the National Stone, Sand and Gravel Association (Anepac) estimates that the growth rate was higher than the 7% that were initially forecasted, given the fact that the industry grew 9.5% last year.
“The crisis started when most of the contracts were already signed, and large developers had already begun their works. The same happened with government investment, many of which were already underway. As the stone, sand and gravel industry basically depends on civil construction, it had also grown by the end of the year,” says Fernando Valverde, executive director at the Anepac.
According to Valverde, in the period from 1998 to 2004, the industry saw a retraction due to lack of investment. From 2005 to 2007, equipment was replaced, units were expanded and others were built, and in 2008, installed capacity was approximately 520,000 tonnes. In 2009, the forecast is for 85% of installed capacity to be attained, i.e., an output of 439,000 tonnes.
“The forecast depends on effective implementation of the Growth Acceleration Programme (PAC) of the Brazilian federal government, of the Incentives of the Production Development Policy (PDP) and on the growth of the real estate sector,” he claims. Currently in Brazil the industry consists of around 2,500 companies, being approximately 2,000 sand and 500 pedra britada producers. The industry is responsible for some 65,000 jobs at quarries and sand quarries across the country.
In the assessment of engineer and business advisor Milton Akira Kiyotani, the year of 2009 should be reasonably good due to infrastructure works to be carried out by both the federal government, by means of the PAC, and state governments. “A year of election [such as 2008, when there were municipal elections] is usually a very good year. The private sector was also hot due to civil construction last year. In 2009, there should be a reduction in construction of offices, factories and residential real estate,” he says.
Up until 2006 the industry was doing bad, there was not much investment. Starting in 2006, the market began to recover. “I believe that the first half will not be bad, because the Federal Savings Bank and the Brazilian Development Bank (BNDES) have already announced that they should ensure a reasonable amount of credit. There are many PAC works underway, therefore the industry should follow the trend," he estimates.
In state of São Paulo, for example, the government launched works in the coastline and announced that it will hold tenders for highways and that there will be investment in the aerospace and port sectors.
In Rio de Janeiro, investment is also forecasted in large construction work, such as the ring road, the main ongoing highway infrastructure work in the state. PAC infrastructure works should also take place in the state of Minas Gerais. “The governments of the states of São Paulo and Rio de Janeiro are also investing and that should give the industry a boost. It should not suffer an impact as strong as other segments, such as ironworks and agriculture,” he believes.
A combination that works
According to Valverde, the physical and chemical properties of sand, stone and gravel are essential to the structures in which they are used. “There are countless examples of structural failure caused by inadequate choice and use of these items,” says the director in a study on the subject.
According to him, mining of sand, stone and gravel for civil construction is carried out at quarries and sand quarries, as they are popularly known. However, the market may take in production from other sources. In the case of sand, the origin may be the producer of industrial sand or of industrial quartzite, both usually aimed at the glass and metallurgic industries. In the case of gravel, suppliers may be producers of limestone used by the cement industry.
Considered a basic input for the civil construction industry, cement concrete uses, on average, per cubic metre, 42% of gravel, 40% of sand, 10% of cement, 7% of water and 1% of chemical additives, i.e., around 70% of concrete is comprised of these inputs. "Hence the importance of using inputs with adequate technical specifications," says Valverde.
*Translated by Gabriel Pomerancblum
