CRH plc, the international building materials group, announces that its US subsidiary, Oldcastle Materials, Inc., has taken a 50% equity stake in American Cement Company, LLC (ACC), for a cash contribution of US$50m. Oldcastle Materials’ partners in ACC are the shareholders of Trap Rock Industries, a major regional construction materials and contracting company in New Jersey. ACC has been formed to develop and operate a cement plant in central Florida. Senior debt to finance the installation of the facility will be provided to ACC by Oldcastle Materials.
The new cement plant and associated facilities, for which planning and permitting approvals have been received, will be located in Sumterville, close to Orlando and Tampa in Florida, on an ACC-owned deposit which contains over 150Mt of high quality limestone reserves. The plant will have an annual capacity of 1.1Mt, and is expected to commence production in late 2008.
Florida is one of the strongest construction markets in the US and has very positive long-term demographic growth trends. While the CRH Products & Distribution Division in the Americas already has significant operations in Florida, this is Oldcastle Materials’ first investment in the region and is an entry into the cement sector in the US.
CRH’s Europe Materials Division produces almost 13Mt of cement annually at facilities in Finland, Ireland, Poland, Portugal, Switzerland, Tunisia and Ukraine.
Commenting on this investment, Tom Hill, CEO of Oldcastle, Inc., said: "The outlook for the Florida construction sector is excellent and, with up to 40% of total annual cement consumption in the state currently being imported, we believe there is real need for the local production capacity which ACC’s new facility will add."