Construction materials group Adelaide Brighton (ABC) has strengthened its position on the local market with the acquisition of customer Direct Mix Concrete.
The move follows ABC’s recent purchase of beleaguered chemicals manufacturer Penrice’s limestone quarry at Angaston.
In an announcement to the stock market today, ABC also outlined two other integrations: Southern Quarries in Adelaide and Queensland-based BM Webb Construction Materials
The company said the acquisitions strengthened its market position and progressed its long-term vertical integration strategy of buying downstream construction materials businesses.
“In South Australia, in addition to the recently announced Penrice quarry acquisition, Adelaide Brighton has entered into a contract to purchase Direct Mix Concrete and Southern Quarries, the largest independent aggregates and pre-mixed concrete supplier to the Adelaide building, construction and infrastructure market,” the statement said.
“In Queensland, the company has purchased the concrete, quarry, sand, transport and cement operations of Townsville-based BM Webb.”
Adelaide Brighton CEO Martin Brydon said the acquisitions gave it an important staging post for cement distribution in north Queensland.
“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,” Brydon said.
“The Penrice Quarry acquisition (last month) secured long-term reserves of high-quality industrial minerals and aggregates in excess of 30 years and complements the DMC market position.
“The $174 million Webb acquisition offers the opportunity to expand into the promising north Queensland market now we have the ability to distribute cement into this market.”
The DMC transaction is expected to be completed this month while the smaller Webb transaction was completed in May 2014.
The acquisitions will be funded with existing cash and available facilities.
DMC operates 13 concrete plants under its Direct Mix brand and operates a significant hard-rock quarry and sand operations under its Southern Quarries brand.
Southern Quarries holds number-two position in the Adelaide aggregates and sand market.
The DMC Sellicks and Price quarries produce more than one million tonnes per annum of hard rock and sand, and supply 100 per cent of the concrete aggregates and manufactured sand requirement for the Direct Mix business.
Direct Mix produces in excess of 200,000 cubic metres of premixed concrete from three metropolitan and 10 regional plants.
In July 2014, Adelaide Brighton executed a long-term supply agreement with the remaining major independent premixed concrete producer in South Australia. The agreement underpins utilisation at the Birkenhead cement works.
