A few days ago, the high-level Ukraine reconstruction conference took place in Lugano. Long before the war ends, plans are to be drawn up to get the devastated country back on its feet. Hundreds of billions of euros are to flow for it. If used wisely, it could be the start of a revolution that will alleviate a huge global problem – and offer forward-thinking investors a unique opportunity for returns.
The construction industry is one of the biggest drivers of climate change
There are several problems associated with the construction industry. It seals floors and consumes many natural resources. Good building sand is in danger of becoming scarce in many places. It is also extraordinarily energy-intensive and thus causes high CO2 emissions. According to studies, cement production alone is responsible for around 8%.
Research institutes and the building materials industry are feverishly searching for new concepts to bring more sustainability into the conservative building industry. It would be ideal if durable concrete could be produced again inexpensively from rubble.
The problem with this is currently that it is time-consuming to collect, sort, break up and reuse the heavy and scattered material.
And this is where Ukraine comes in. As sad as it is that entire cities have been reduced to rubble, if at least one good thing is to come of this, it could be the scaling of concrete recycling.
Concrete recycling is about to make a big breakthrough
For example, the Swiss industry heavyweight Holcim (WKN: 869898) presented a concrete two years ago that consists of recycled aggregate and resource-saving cement. By means of supplementary compensation measures, it received the “climate-neutral” label.
The Austrian Holcim subsidiary Lafarge Perlmooser, on the other hand, wants to process the CO2 produced during cement production into plastics and operates its own recycling center in Retznei, in which hundreds of thousands of tons of construction waste are recycled.
So there are already market-ready approaches. The only problem is that they have not been able to keep up with classic concrete in terms of costs. That’s why we’re keenly researching to develop even better solutions. For the environment, successes on this front are more urgent than ever. The commercial potential offered by Ukraine’s reconstruction should give additional impetus to efforts.
It is estimated that the costs could be in the range of 700 billion euros. If as much as possible is to be achieved with this, then it is crucial to organize the construction industry efficiently. CO2 savings with cement and the skilful use of construction waste could make a major contribution to this.
If corresponding solutions are scaled, i.e. rolled out nationwide in the same form, then the investment costs drop significantly. As a result, they could also become interesting for many other regions and thus make the construction industry a bit more sustainable worldwide.
Investors should be on the lookout for opportunities
At the moment it is anything but clear which companies will turn out to be protagonists in this direction. Plant manufacturers, manufacturers of building materials, companies from the structural and civil engineering sectors as well as innovative start-ups are eligible. We might even see an IPO that aims to do just that. In any case, I’ll keep my eyes open. Where 700 billion euros flow, there should be something for clever investors.
Ukraine Rebuild: Mega Opportunity to Scale This Technology Globally article first appeared on The Motley Fool Germany.
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Ralf Anders does not own any of the shares mentioned. The Motley Fool does not own any of the stocks mentioned.
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