Ceramics and cementTOTAL UK EMPLOYMENT20,000 in direct employment, at least 40,000 when includingindirect employment. 15,000 jobs are indirectly supportedby the cement industry, 3,400 directly employed. 118(At an EU level the European ceramic industry employs over200,000 people). 119THE IMPACT OF HIGH ENERGY BILLSAccording to international studies, energy costs canamount to 30-35 per cent of production costs. As a resultit is unsurprising that the UK ceramics industry is warningthat the UK economy is becoming less competitive:THE STATE OF THE SECTORAlong with glass, ceramics accounts for 3 per cent ofUK exports (about £19.6 billion). 120 Recent reports havesuggested that exports to non-EU countries may beincreasing after several years of decline. The cementindustry has recently faced a substantial decline in sales;a recent report by CIVITAS noted that the UK’s balance ofpayments in cement has declined, while at the same timecement production has decreased substantially, as can beseen in Figure 21. 121PROBLEMS FACING THE SECTORCommentators have been noting the decline of certainceramics industries, such as pottery for many years. 122 Ithas been noted also that the cement industry has declinedover the last few years, even before the financial crisis, withboth production and consumption falling dramaticallybetween 1992 and 2006. 123 The cement industry also facesthe criticism of lacking competition (with customers facingincreased prices) and the Competition Commission hasrecently ruled that there needs to be a fifth cement producerin the UK to try and increase the amount of competition inthe market. 124118 Communities and local Government, information found at additional information providedby British Ceramic Confederation119 Cerame-Unie, Paving the way to 2050, found at“There are issues with the approach of the EUperformance and outcomes.”120 BIS, Industrial Strategy: UK sector analysis, September 2012, p.10, foundat 121 CIVITAS, Rock solid, an investigation into the British cement industry,found at 122 The Economist, The China Syndrome, 23 August 2001, found at 123 Communities and local Government, information found at 124 Competition Commission, information found at 125 British Ceramic Confederation, Submission to the Balance ofCompetences126 British Ceramic Confederation, Key Priorities for the New Government,found at 127 British Cement Association, Submission to the European Commission,found at 36- British Ceramic Confederation 126The British Ceramic Confederation has gone on to stressthe need for secure energy prices; natural gas representsapproximately 85 per cent of all energy consumed inthe ceramics sector. Similar concerns are also found inthe cement industry. The British Cement Association haswarned that “energy represents an increasing proportion ofthe variable costs of cement manufacture”. 127
INDUSTRY CASE STUDY 3.1.6Figure 21: Output - Cement, lime, plaster products index (2010=100) 128Figure 22: Output - Glass, clay porcelain and ceramic products index (2010 = 100) 128128 ONS, “Detailed Index of Production”, 37
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