Australia’s Adelaide Brighton Limited has announced that it has purchased two integrated aggregates and premixed concrete businesses.
Following the acquisition of the Penrice quarry, which was recently announced, Adelaide Brighton has signed a contract to acquire Direct Mix Concrete and Southern Quarries (DMC), the biggest independent aggregates and premixed concrete supplier to Adelaide’s construction sector. It operates 13 concrete plants under the Direct Mix brand, in addition to hard rocky quarry and sand operations under the Southern Quarries brand.
Also in South Australia, Adelaide Brighton has executed a long-term supply agreement with the remaining major independent premixed concrete producer in the region. The deal, which lasts until mid-2021, will aid utilisation at the Birkenhead cement plant.
The second new purchase is Townsville-based BM Webb Construction Materials’ concrete, quarry, sand, transport and cement operations. Webb produces around 60 000 m3 of concrete pa and has more than 50 years of hard rock reserves. Its cement operations involve importing bulker bagged GP cement and flyash. The acquisition will enable Adelaide Brighton to expand its cement distribution into the north Queensland market.
‘Vertical integration’ and expanded market reach
The Webb transaction was concluded in May 2014 and the DMC transaction is scheduled for completion in August 2014. The acquisitions will help Adelaide Brighton to strengthen its market position and progress ‘its long-term vertical integration strategy of buying downstream construction materials businesses’.
“The DMC business provides a large scale entry into the market as it is the number two player in South Australian concrete, hard rock and sand. DMC also offers a well located hard rock quarry resource with more than 50 years of reserves, protects the sales of cement supplied by Adelaide Brighton and provides overhead synergy benefits,” said Martin Brydon, Adelaide Brighton CEO.
“The Penrice Quarry acquisition secures long-term reserves of high quality industrial minerals and aggregates in excess of 30 years and complements the DMC market position. The Webb acquisition offers the opportunity to expand into the promising north Queensland market now we have the ability to distribute cement into this market,” he added.
Adapted from press release by Louise Fordham
Read the article online at: https://www.worldcement.com/asia-pacific-rim/06082014/adelaide-brighton-announces-new-acquisitions-247/