Cement Industry, 2.5 Trillion Won in Facility Investment Over 5 Years... "Depleted Ammunition in Response to Environmental Regulations"

[Financial News] It was found that the domestic cement industry invested 2.5306 trillion won in facility investment over the past 5 years. Of this, 85% was invested in response to strengthened regulations such as environment and safety, and this execution scale was 4.3 times the industry's net profit during the same period.
The Korea Cement Association announced this through the '2024 Facility Investment Performance and 2025 Plan' data on the 22nd. The association compiled the investment status of major member companies such as Sampyo Cement, Ssangyong C&E, Hanil Cement, Asia Cement, and Sungshin Cement.
According to the data, the cumulative facility investment planned by the industry from 2021 to 2025 is a total of 2.5306 trillion won. Of this, 2.1511 trillion won was focused on 'rationalization facility investment' centered on environment and safety, such as nitrogen oxide (NOx) reduction, automation facilities, and energy saving. This accounts for 40% of last year's industry sales (5.5267 trillion won) and more than 4 times the net profit (499 billion won).
This year's investment plan is 514.1 billion won, a decrease of 11.2% compared to the previous year. The explanation is that the construction market recession, which began in earnest last year, has affected the shift to a decline in facility investment scale. However, the core areas of environment and safety increased by 20.2% to 187.5 billion won.
The problem is that such large-scale facility investment is not linked to performance improvement. The industry's average annual net profit over the past 5 years is 420 billion won, which is less than the facility investment amount (annual 506.1 billion won). As environmental regulations are strengthened, and the stagnant construction market shows no signs of rebounding, there are concerns that the investment reversal phenomenon may intensify.
A representative of the Cement Association said, "The establishment of facilities to comply with the government's strengthened environmental regulations, such as NOx emission charges, is difficult to apply flexibly according to the construction market situation or the industry's management situation," adding, "Since securing a stable survival foundation is more urgent in the future, government-level support is urgently needed to maintain environmental investment as much as possible despite increased sales losses and losses due to increased construction site shutdowns."
Thomas Armstrong, editor of the international cement specialist media 'CemNet', also mentioned at the 'CemTech Asia 2025' held last June, "Europe is receiving EU-level investment support to reduce greenhouse gases and reduce emission pollutants in line with the circular economy era," adding, "If the Korean government actively considers supporting the cement industry's environmental facility investment, it will help find a breakthrough."

jimnn@fnnews.com Shin Ji-min Reporter