Tarmac: no more UK cement plant plans

Tarmac: no more UK cement plant plans
Published: 19 May 2004

Chief executive Robert Robertson says the £115m Buxton facility upgrade is final UK project.

Tarmac has no plans for any further cement factories in the UK beyond the new £115m plant at Buxton which is scheduled to open by October, chief executive Robert Robertson told CJ. Cement production from the upgraded Buxton Lime plant will lift Tarmac’s UK output from the present figure of 300,000t a year to 800,000t, giving it a 6% market share.

 "At Buxton, there was lime slurry that had to be consumed, hence the old facility was built. But it had high emissions, so we had to upgrade," Robertson said. "The agreed price is £115m with FLSmidth and it will be delivered below that price."

 Tarmac became part of Anglo American, the mining conglomerate, following a £1.2bn agreed deal early in 2000. Since then, followers of the UK aggregates market have been somewhat surprised to see all three of the major cement producers - Castle, Blue Circle and Rugby - change hands without any show of interest from Tarmac.

Robertson explained: "Castle was sold as part of a large deal which involved non-construction investments, many of which were outside the UK. Blue Circle was a large transaction that went to Lafarge after a contested bid. I’m not sure we’d have been able to justify the price. And Rugby? You’d need to ask RMC if it is happy with Rugby." Tarmac has no plans for further vertical integration. Robertson said the group will continue buying cement for its ready-mixed concrete plants from all three of the major UK manufacturers. "We want profit in our ready-mixed concrete business and profit in cement," he said. "Which means Buxton will have to be profitable."

Tarmac has been quick to take a position in the emerging market for on-site silos containing a dry mix of mortar. "We now have four plants to supply them," Robertson said. "On site, you simply plumb the silo in and provide electricity and then get a wet mix on demand. The advantage is that water is only added to the pre-mixed mortar when needed."