Votorantim Cimentos aggressively seeking aggregates in Great Lakes region
Votorantim Cimentos, the cement manufacturing division of the Brazilian conglomerate Votorantim Group, is aggressively seeking to acquire suppliers of aggregates in the Great Lakes Region of the US and Canada, a company source said.
The source said Votorantim Cimentos intends to become even more aggressive in its acquisitions strategy in 2007, citing earlier acquisitions as the first step in creating a platform for future purchases by the cement division as well as other members of the Votorantim group. The acquisition of an aggregates company will complete the cement division’s supply chain requirements, he explained.
Cleveland, Ohio-based Oglebay Norton is one company that appears to fit Votorantim Cimentos’ acquisition criteria. “Votorantim Cimentos has been inquisitive but there has been no direct involvement with them,” Oglebay Norton CEO Mike Lundin said, when asked about a potential match-up. Lundin declined comment on whether the essential minerals and aggregates distributor was open to being acquired by Votorantim Cimentos.
Dallas, Texas-based Eagle Materials could also be a logical target, suggested an industry analyst. The listed building materials distributor has some operations in the Great Lakes, although its aggregates business is located in California and Texas, according to the company Web site. Consolidation in the cement manufacturing industry is accelerating, the analyst said. ”I’ve been watching this game go on for six or seven years, and it’s just been one company picked off after another.” He added, ”While North Americans are focused on IT dreams, real businesses are being taken over by Europeans and Brazilians.”
The search for an aggregates company comes on the heels of a major four-year drive from 2001 to 2005 to acquire five cement manufacturing companies in the US and Canada, the Votorantim Cimentos source said. In 2005, for instance, the unit acquired two US plants in the Great Lakes region for USD 389m, according to the company Web site.
The Votorantim Group is one of seven Brazilian companies that enjoys investment grade status among the major international rating agencies, even though Brazil has yet to reach this level.
Published under Cement News
