Further restructuring to come at RMC

Further restructuring to come at RMC
Published: 04 May 2004

The RMC Group is expected to announce a further series of restructuring measures towards the end of June, when the current review of the new chief executive, Mr. David Munro, as well as negotiations over clinker supplies for the German market should have been completed.  A successful conclusion of long term clinker and cement supplies in Germany should allow RMC to make a contribution to the reduction of considerable excess capacity in that country as well as reducing transport costs there.  The Rugby cement plant in England has continued to cause problems although the major problems relating to the clinker production process have been overcome, but problems with conveyor belts, clay supplies and ventilation systems led to prolonged down time during the early part of the year in addition to which the plant continues to face local opposition to emission levels.  With the exception of Germany, where prices are recovering even if market demand is still sliding, and the United States, the group is envisaging broadly similar trading conditions this year as in 2003.  In the United States, trading is presently strong and cement supply is tightening across the areas where RMC is active as higher freight rates have pushed up the cost of imports and cement prices are expected to rise by around US$2 to US$3 per short ton.  In the spring of this year, the group’s Spanish subsidiary Readymix Asland, sold 18 poorly performing ready-mixed batching–plants in the provinces of Extremadura and Andalusia to Cimpor for €11.4m, leaving Readymix Asland with 108 batching plants.