Displaying items by tag: Ash Grove
Hold that cement empire!
11 October 2017Well it doesn’t normally happen like this. In late September 2017 Ash Grove Cement announced that it was set to be bought by Ireland’s CRH. The words it used were a ‘definitive merger agreement.’ Then suddenly this week on 5 October 2017 Ash Grove said that it had received a higher offer from an unnamed third party and that it was extending its so-called ‘window shop period.’ So much for definitive! The following day Reuters revealed that the new bid was from Summit Materials.
The on-going board machinations at LafargeHolcim and the PPC-AfriSam merger saga in South Africa show that the cement industry has its moments of boardroom high drama. Indeed, both of these long-rumbling stories have had murmurs this week with the early departure of LafargeHolcim’s finance director Ron Wirahadiraksa after less than two years and Dangote Cement’s decision to exit the ring from the PPC bidding. However, it’s rare that cement companies are publicly announced as sold and then get gazumped instead.
The Ash Grove debacle also carries a personal dimension. Ash Grove chairman Charlie Sunderland initially described CRH as his company’s biggest customer and one with a close relationship to the firm. Yet a US$300m higher bid suggests how much those ‘kind’ words were actually worth. To add insult to injury the chief executive officer (CEO) of Summit Materials, Tom Hill, used to work for CRH. This no doubt gave him an idea of how the management of CRH thinks. CRH’s public response so far has been that it has noted the extended shareholder approval period at Ash Grove.
At first glimpse Summit Materials and CRH have a similar cement production base in the US. Both companies operate two integrated plants in the country. Summit Materials runs plants at Hannibal, Missouri and Davenport, Iowa. CRH runs plants at Sumterville, Florida and Trident, Montana. Summit then has 10 cement terminals along the Mississippi River from Minnesota to Louisiana compared to CRH US’ five cement terminals in Detroit, Michigan, Cleveland, Ohio, Dundee, Michigan, Buffalo, New York and Duluth, Minnesota.
Yet, CRH also has two plants in Canada. Then the sheer scale of CRH’s other operations in North America simply dwarfs Summit’s. CRH Americas reported sales of US$16.7bn in 2016, more than 10 times higher than the US$1.6bn that Summit Materials declared. Both companies cover aggregates, asphalt, readymix concrete and cement but CRH is by far the larger of the two. So much so in fact that Summit Materials might potentially be taking on a serious amount of debt to finance the Ash Grove sale. As such any blip to the US cement market over the next few years could have serious repercussions to an overleveraged Summit Materials.
On face value the possible engagement with Summit Materials might appear to show that there is a lack of trust between CRH and Ash Grove. However, this cannot be inferred. As its shares are traded over the counter, Ash Grove’s shareholders have allowed a two-week shop window to enable other companies to counter-offer. This is to ensure that they get the best possible value. Talking to Summit is part of this process and may, or may not, mean that the last remaining US-owned cement producer stays based in the US after all.
Summit Materials makes US$3.8bn counter bid for Ash Grove Cement
06 October 2017US: Summit Materials has offered US$3.8bn to buy Ash Grove Cement, according to Reuters. The board of Ash Grove Cement has described the proposal as ‘superior’ to the US$3.5bn bid made by Ireland’s CRH in September 2017. It has extended its so-called ‘shop window’ consideration period with CRH to 20 October 2017.
US law firm examines proposed Ash Grove Cement sale to CRH
03 October 2017US: WeissLaw is investigating the proposed sale of Ash Grove Cement to Ireland’s CRH on the grounds of whether the board acted to maximise shareholder value prior to the deal. Citing an article by financial markets research company Seeking Alpha the law firm says it is exploring whether rising demand for cement due to expected government infrastructure spending, the company’s high market share in certain regions and its recent growth in operating earnings were fully taken into account when valuing the company. CRH and Ash Grove Cement announced the US$3.5bn deal in late September 2017.
CRH enlarges its North American cement presence
27 September 2017The last week marked a step change to the US industry with the news that Ireland’s CRH has agreed to buy Ash Grove Cement. The latter is the largest remaining cement producer still owned by an American company. Its history dates back 135 years to its founding in 1882, with links to the Sunderland family for over a century. Following the acquisition, each of the top five cement producing firms in the US will be operated by multinational corporations based in foreign countries.
Although this scenario is not new to many other countries around the world, it is rare for a nation with a cement industry of this scale. The US is the third biggest cement producer worldwide. Out of the top ten cement producing nations Global Cement Magazine identified in its Top 100 Report 2017 feature in December 2016 only Egypt doesn’t have a local company to match the multinationals. China has China National Building Material (CNBM), for example and India has UltraTech cement and so on and so forth.
The actual sale covers Ash Grove Cement’s eight cement plants and 23 cement terminals, as well as its ready mix concrete and aggregate businesses, for US$3.5bn. Altogether its cement plants have a production capacity of 9.5Mt/yr and this really puts into contrast the Cementir Italia deal last week. HeidelbergCement has agreed to buy that company for around Euro57/t. CRH is buying Ash Grove Cement for US$368/t. That’s more that five times as much!
To be fair they are very different markets, with Italy’s cement sector consolidating near the bottom of a business cycle and the US growing with some promise. For comparison with other recent US acquisitions, CRH is offering to pay about the same as Summit Materials did to Lafarge for a cement plant and seven terminals in mid-2015. Other than that a few of the more recent transactions have been between US$200 – 300/t. The gradual price inflation for cement production capacity indicates that there is confidence in the US cement market.
In terms of CRH’s enhanced presence in North America following the completion of the deal, it currently operates two cement plants in the US: the American Cement Sumterville plant in Florida, a joint venture with Elementia, and the Trident plant in Montana. The CRH US division also runs five terminals in the Midwest and Northeast. This compliments Ash Grove Cement’s presence in the West, Midwest and South. Throw in CRH’s Canadian cement plants in Ontario and Quebec and CRH has the makings of a seriously strong cement business in North America. The only obvious impediment could be the close proximity of the CRH Trident plant and the Ash Grove Cement Montana City plant. Both are in Montana within 115km of each other and they are the only integrated plants in the state. A Federal Trade Commission arranged divestment in this location seems likely.
Ash Grove Cement’s chairman Charlie Sunderland, described CRH as his company’s biggest customer when the acquisition was announced. Buying Ash Grove Cement fills in one more piece in CRH’s construction materials puzzle in North America. Its American divisions have generated more than half of its revenue since at least 2014 dominating asphalt, aggregate and ready mix concrete markets. Yet it has lacked a cement market presence to match this. This changes when the deal with Ash Grove Cement completes.
CRH buys Ash Grove Cement for US$3.5bn
21 September 2017US: Ireland’s CRH has agreed to buy Ash Grove Cement for US$3.5bn. The American cement producer operates eight cement plants across eight US states, combined with ready mix concrete, aggregates and associated logistics assets across the US midwest. Once shareholder and regulatory approval is obtained the deal is expected to complete by the end of 2017.
"Ash Grove is an excellent addition to CRH's portfolio of businesses across North America as we seek to deploy our capital into high quality businesses that enhance our global asset base and provide opportunities to create shareholder value. We welcome the Ash Grove team to CRH and look forward to further developing our longstanding relationship as part of one company," said Albert Manifold, chief executive of CRH.
Before the purchase agreement Ash Grove Cement was the largest domestically-owned cement producer in the US. The company has operated for 135 years and over a century of this time it has been run by the Sunderland family.
Winners from Buzzi Unicem, Ash Grove Cement and Salt Rivers Materials announced in PCA’s 2017 John P Gleason Jr Leadership Awards
01 September 2017US: The Portland Cement Association (PCA) has announced the winners of the 2017 John P Gleason Jr Leadership Awards, honouring individuals who have exhibited leadership in association activities in support of member company objectives and operations. The awards will be presented at the PCA’s Fall Congress in Chicago.
Daniel Nugent, Senior Vice President, Technical Services and Government Affairs, Buzzi Unicem USA won the award for Business Continuity for his leadership role in industry regulatory and legislative initiatives, including greenhouse gas emissions and other significant issues that impact cement manufacturing operations. He serves on a variety of PCA committees, including the Energy and Environment Committee and Government Affairs Council. Finalists for this award included Hamid Farzam, Vice President of Technical Services and Quality Assurance for Cemex USA and Steve Regis, Senior Vice President of Corporate Services for CalPortland Company.
Matthew Wood, Sustainable Products and Promotion Manager, Ash Grove Cement Company, won the award for Market Development for the promotion of cement-based products at the national and local level, such as roller-compacted concrete and full-depth reclamation paving solutions. He is also a member of the PCA’s Sustainable Development Committee and LEED Accredited Professional. Finalists for this award included David Gray, Market Manager for GCC of America and Larry Rowland, Manager of Marketing and Technical Services for Lehigh Hanson.
Ruben Guerrero Jr, Director of Corporate Affairs, Salt River Materials Group won the award for Young Leaders for his active engagement in the PCA’s network of public policy and communications committees, including the Government Affairs Council, Industry Communications Committee and State Government Affairs Task Force. Finalists for this award included Desirea Haggard, Environmental Manager, CalPortland Company and William Kissel, Senior Environmental Manager, Titan America.
J Randall Vance promoted to CEO of Ash Grove
23 August 2017US: Ash Grove Cement has announced that its Chief Operating Officer J Randall Vance has been promoted to Chief Executive Officer. Charles Sunderland, who has held both the chairman and CEO titles, will remain as chairman of the Overland Park-based company.
Vance joined Ash Grove in 2011 as Chief Financial Officer, according to a release. In 2014, he was named as president and COO, filling a position that had been vacant since the death of Charles Wiedenhoft in 2010.
PCA names leaders in safety and sustainability
10 May 2017US: The Portland Cement Association (PCA) has announced the winners of its Chairman’s Safety Performance, Safety Innovation and Energy and Environment Awards. The awards recognise outstanding safety performance in the manufacturing of Portland cement, creative safety-enhancing projects in the cement industry and outstanding environmental and community relations respectively.
“The facilities recognised today are to be congratulated for their safety achievements,” said Allen Hamblen, PCA chairman and president and chief executive officer of CalPortland, in relation to the Safety Performance Awards.
Winners of the 2017 PCA Chairman’s Safety Performance Awards:
Category: Less than 226,000 hours
Buzzi Unicem USA – Chattanooga, Tennessee
LafargeHolcim US – Morgan, Utah
Lehigh Hanson, Inc. – Tehachapi, California
Category: 226,001 - 289,000 hours
Ash Grove Cement – Foreman, Arkansas
GCC Permian – Odessa, Texas
Lehigh Hanson, Inc. – Leeds, Alabama
Category: 289,001 - 563,000 hours
Cemex USA – Brooksville, Florida
Cemex USA – New Braunfels, Texas
Martin Marietta Materials – New Braunfels, Texas
Winners of the 2017 Safety Innovation Awards:
Milling/Grinding
Ash Grove Cement, Montana City, Montana
Pyroprocessing
Cemex USA, Balcones, Texas
Distribution
CalPortland Cement Terminal, Portland, Oregon
LafargeHolcim US, Corporate Program, Chicago
Winners of the 2017 Energy and Environment Awards:
Energy Efficiency
Cemex USA Construction Materials, Pacific, LLC, Victorville, California
Environmental Performance
Cemex USA Construction Materials, Pacific, LLC, Victorville, California
Land Stewardship
Continental Cement Company/Green America Recycling, Hannibal, Missouri
Outreach Winner
Mitsubishi Cement Corporation, Lucerne Valley, California
Mine Safety and Health Administration blames management of Ash Grove Cement for fatal accident at Midlothian plant
19 December 2016US: The Mine Safety and Health Administration (MSHA) has blamed the management of Ash Grove Cement’s policies, procedures and controls for the death of a worker at its Midlothian cement plant in May 2016. Roderick Barnes, a maintenance worker aged 46 years, died from a fall from the top of a slurry tank. In its report on the incident the MSHA said that the cement producer failed to provide protection around openings through which workers could fall and that that it failed to use fall prevention and protection devices. The MSHA has issued five citations for violations of the Mine Act is relation to the event.
FCT Combustion wins contracts in the US and Brazil
20 October 2016Brazil/US: FCT Combustion has released details on contracts it has been awarded from CSN Cement Brazil and Ash Grove Cement. CSN Cement Brazil in Arcos, Brazil has ordered a Turbo-Jet kiln burner with a maximum thermal power of 102Gcal/hour for high sulphur petcoke, heavy fuel oil, alternative solid fuel and alternative liquid fuels firing for its 6500t/day cement kiln. Ash Grove Cement in Seattle, Washington in the US has awarded a contract for 63Gcal/hour Gyro-Therm MKII kiln burner for natural gas firing.
FCT Combustion has also opened new offices in Fort Lauderdale, Florida and São Paulo, Brazil.