Building USA's largest domestic cement producer
This week Eagle Materials INC received the full approval of the US-based Federal Trade Commission (FCT) to acquire the assets of Kosmos Cement, a joint venture between Cemex and Buzzi Unicem. This clearance follows the initial announcement of the US$665m planned acquisition in November 2019.
While Cemex is currently on a path of divesting its non-core businesses, Eagle Materials Inc is steadily expanding its cement portfolio in USA and the addition of Kosmos Cement will add the 1.7Msta cement plant at Louisville, as well as seven distribution terminals and access to raw material reserves for its heavy materials business. The acquisition boosts Eagle Material Inc's cement capacity in North America by approximately 25 per cent, and it is already the largest US-owned cement producer with seven cement plants and 5.2Msta of clinker capacity, which equates to five per cent of the national clinker capacity.
Michael Haack, Eagle Materials Inc, president and CEO, said the Kosmos Cement agreement represents a significant milestone in the company's growth strategy. "At Eagle we have been disciplined in the strategic growth of our integrated network of cement plants in the US heartland, and the Kosmos facilities are a natural fit. The Kosmos facilities are high-quality, low-cost assets that align with our long-term strategic growth plans and meet our criteria for new investment. These assets will also enable us to participate more significantly in US construction and infrastructure market growth."
A growing cement portfolio
The cement business accounts for 41 per cent of Eagle Materials Inc's revenue, with gypsum wallboard representing 34 per cent, recycled paperboard 11 per cent, concrete and aggregates nine per cent and oil, gas and proppants five per cent. The company's largest cement plants are the Texas Lehigh Buda plant 1.435Msta (a joint venture 50 per cent share with HeidelbergCement group), La Salle Illinois plant 1.1Msta and the Central Plains Cement’s Sugar Creek plant in Missouri 1.1Msta. The group also consists of Fairborn Cement in Ohio 0.98Msta, Central Plains Cement's Tulsa plant in Oklahoma 0.9Msta, Mountain Cement’s Laramie plant in Wyoming 0.8Msta and Nevada Cement's Fernley plant 0.55Msta. This gives a total cement capacity of 7.85Msta with the addition of Kosmos Cement acquisition.
Only the Sugar Creek and La Salle plants have five-stage preheater/precalciner kilns, while the Tulsa and Fernley plants still operate long dry kilns. The La Salle kiln line is the newest in the group and was modernised in 2006, while the Fernley and Tulsa plants both have 1964 kiln lines still operating. The main fuel used is coal and petcoke but the plants also have natural gas as an option. At Tusla the company burns fuel-quality wastes in addition to coal and petcoke and the Sugar Creek facility burns alternative fuels as well as fossil fuels. The lead plant for alternative fuels is the Buda plant, near Austin, Texas, which is testing lumber recycled from Austin's Green Building programme and one-part tyres from stockpiles in San Antonio.
The company also operates a further 19 distribution terminals throughout the USA and the Skyway Cement Co that produces slag in Chicago Illinois. Its distribution of facilities are strategic in that they are largely insulated from coastal imports, apart from in Texas where the company’s headquarters are located.
The Sun Belt region in the southern part of the USA is where Eagle Materials Inc is primarily focussed for its cement business with an integrated cement system from California in the west to Ohio and in the north and Texas to the south. The Kosmos Cement deal will build on the acquisition of the Cemex Fairborn plant made in 2017 from Cemex.
Ready-mix and aggregate assets
Eagle Materials Inc also has the downstream support of nine read-mix concrete plants with a total production of more than 850,000yd3 (0.650Mm3). Mathews Readymix and Western aggregates operate out of Northern California and Centrex Materials operates in Central Texas. It also has more than 1bnt of aggregate reserves in Northern California.
Innovation
Eagle Materials Inc is also an innovator working on carbon capture and sequestration. It has a partnership with a technology start-up company to explore breakthrough methods in eliminating greenhouse gases from the cement industry. The Mountain Cement plant is also working with the University of Wyoming on carbon sequestration technology.
