Italcementi increases its operations in the field of concrete in North America

Italcementi increases its operations in the field of concrete in North America
03 April 2007

The Italcementi Group continues its strategy of expanding its operations in international markets by strengthening its activities in the field of concrete.

By means of two transactions carried out in North America by Essroc, - a wholly owned subsidiary of Ciments Français, which is the Italcementi subholding for international activities - the Italcementi Group increases overall concrete sales, based on 2006 figures, by approximately 4%, and continues its programme of strengthening the vertical development of operations downstream of cement production.

Italcementi has so far reached its objective of entering the concrete segment in the US market and strengthening its activities in the Canadian market. In the United States, the vertical development of business operations has been carried out by purchasing the Arrow group, a leading company in the industry based in West Virginia, with manufacturing facilities also in Ohio, West Pennsylvania and South Carolina, that is, in the east of the country, where Essroc is already present in the cement industry with three plants. In Canada, there has been the acquisition of Cambridge, a company active in the area west of Toronto, in the market where Essroc is already present with its Picton cement plant.

The two acquisitions that were finalized over the last few weeks have an overall value of approximately USD 70 million, and they come soon after a similar vertical development strategy of Italcementi Group operations in Egypt, where market leading company Ready Mix Beton was acquired.

“The conclusion of these two transactions in North America shortly after acquiring RMB in Egypt underlines the Group’s commitment to the strategy of strengthening its operationsdownstream of cement production, both in emerging and in mature countries – Carlo Pesenti, Italcementi Chief Executive Officer, points out –. In particular, the U.S. transaction allows the Group to strengthen its competitiveness among its main competitors which are already operating in both the cement and concrete industries. Thanks to this further step, we will be able to transfer the results of our innovation processes to the market with increased efficacy.” 

Arrow produced in 2006 approximately 560 thousand cubic metres of concrete. It has an industrial structure of 17 stationary and 4 mobile centres, plus 164 cement mixers. In 2006 its sales amounted to approximately USD 66 million in a market which has significant synergies with the current Essroc industrial organisation.

Cambridge, which features 5 batching units and 72 cement mixers, owns the rights of extraction of aggregates in two quarries, with significant future stocks. In 2006 it sold approximately 270 thousand cubic metres of concrete, with a turnover of approximately USD 25 million. The company’s area of activity is integrated with Picton’s market which is active, also by means of river transportation, in the Toronto area.

The Concrete/Aggregate sector in 2006 amounted to around one third of overall revenues of the Italcementi Group, with revenues for approximately EUR 1,751 million in 10 countries.

The Italcementi Group, by means of its subsidiary Essroc, is present in North America in the US, Canada and Puerto Rico.

Essroc, established under the name of Coplay Cement in 1866, has an industrial organisation with 8 cement plants. The Martinsburg plant is currently being revamped and will increase its production capacity by 40% reaching 1.6 million tons/year.

North America, showing revenues for EUR 660 million in 2006 and a current EBITDA of EUR 157 million, currently ranks fourth among all countries in terms of contribution to Group results with an amount of over 11% of the overall EBITDA. 

Published under Cement News