Adelaide Brighton (AdBri) will spend AUD60m (US$60.2m) expanding its Birkenhead cement plant following a strong profit result.
The company will increase cement capacity at Birkenhead by 0.75Mta, with a new mill expected to be completed by early 2013, subject to receiving the necessary approvals.
Another AUD34m (US$34.1m) had been set aside for two projects in Western Australia, to reduce environmental impacts and increase lime production at the Munster kiln, while a AUD40-50m investment in lime capacity is being considered for the Northern Territory.
Chairman Chris Harris said the Birkenhead expansion would boost cement production by about 40%. AdBri announced a net profit of AUD151.5m yesterday, up 23.1%, on revenues of AUD1.07bn, up 8.7%. Managing director Mark Chellew said the result came from growth in cement sales and stronger prices, as well as cost management.
"Revenue was up 8.7% to AUD1072.9m primarily as a result of stronger demand from infrastructure and mining projects in South Australia, the resources industry in Western Australia and the continued strength of construction activity in Victoria," he said. "As a result Adelaide Brighton’s increase in 2010 sales volume versus 2009 was greater than the estimated four% increase in the national cement market."
The company’s clinker kilns were running at full capacity, with imports supplementing its domestic production.
Lime volumes increased due to strong demand from Western Australia, however, trading conditions remained difficult in the concrete masonry market.
Premixed concrete volumes increased together with aggregate sales into the northern New South Wales region for the Pacific Highway upgrade, while concrete and aggregate pricing are said to have improved marginally in 2010.
The company said it expected demand for cement and lime to be about the same as in 2010, with weakness in the concrete masonry market envisaged to continue.
"We continue to assess the impact of the recent natural disasters across Australia on our business, but at this stage we do not expect a material impact," the company said.