The inside scoop on industry news, views, and products
The inside scoop on industry news, views, and products
Vol. 3, No. 5
Birmingham, Ala.-based Vulcan Materials Co. and Jacksonville, Fla.-based Florida Rock Industries Inc. on Feb. 19 signed a definitive agreement for Vulcan Materials to acquire Florida Rock in a cash and stock transaction valued at about $4.6 billion. Vulcan Materials says the acquisition, which has been unanimously approved by both companies’ boards of directors, will “significantly enhance” the company’s strategic position and long-term growth opportunities “by greatly expanding its presence in attractive Florida markets and in other high-growth Southeast and Mid-Atlantic states,” according to a press release from Vulcan. The combined company will have aggregates reserves totaling approximately 13.9 billion tons, an increase of more than 20 percent over Vulcan Materials’ stand alone aggregates reserves, and 2006 pro forma aggregates shipments of 300 million tons, an increase of approximately 18 percent compared to Vulcan Materials’ standalone shipments, according to Vulcan. Under the terms of the agreement, Vulcan Materials shareholders will receive one share of common stock in a new holding company (whose subsidiaries will be Vulcan Materials and Florida Rock) for each Vulcan Materials share. Florida Rock shareholders can elect to receive either 0.63 shares of the new holding company or $67 in cash for each Florida Rock share, subject to pro-rating, to ensure that in the aggregate 70 percent of Florida Rock shares will be converted into cash and 30 percent of Florida Rock shares will be converted into stock. The transaction is intended to be non-taxable for Vulcan Materials shareholders and non-taxable for Florida Rock shareholders to the extent they receive stock. The total blended cash and stock consideration of $68.03 per share, based on the closing price of Vulcan Materials’ stock on Feb. 16, represents a premium of 45 percent for Florida Rock shareholders based on the Feb. 17 closing price of each company’s stock. “This is a tremendous opportunity for Vulcan Materials and Florida Rock,” Vulcan Materials Chairman and CEO Don James says in a written statement. “We’re taking two high-performance companies and creating an even better company. “Combining with Florida Rock further diversifies and broadens our reach and regional exposure, providing us with a significant presence in Florida – one of the fastest growing markets for aggregates in the U.S. — and bringing us approximately 2.5 billion tons of reserves in markets where reserves are increasingly scarce,” James continues. “The combined company will have enhanced earnings growth and a strong cash flow profile to reduce debt while maintaining Vulcan Materials’ historical dividend practices and significantly increasing the dividend to Florida Rock shareholders.” Florida Rock President and CEO John Baker says that Florida Rock is extremely pleased” to combine the companies. “We have great respect for Vulcan Materials’ team and believe they offer an ideal business fit and a highly compatible culture to Florida Rock’s,” Baker says in the same written statement as James. “These are very complementary companies, and this is an excellent opportunity for our shareholders as well as our employees, many of whom could enjoy enhanced opportunities as part of an even stronger and more geographically diversified organization that has operations in key high-growth markets nationwide.” Following completion of the transaction, John Baker will join Vulcan Materials’ Board of Directors. Tom Baker, vice president, cement and aggregates of Florida Rock, will become president of Vulcan Materials’ new Florida Rock Division headquartered in Jacksonville, where he will oversee the company’s consolidated operations in the state of Florida. Florida Rock’s operations in Georgia, Virginia, Maryland, and other states will be integrated into existing Vulcan Materials divisions. Vulcan Materials expects to achieve annual pre-tax cost synergies of approximately $50 million. The transaction, which is anticipated to close in mid-year 2007, is expected to be neutral to Vulcan Materials’ earnings in 2007 and accretive to earnings in 2008 and beyond. Vulcan Materials has received a firm commitment from Goldman, Sachs & Co. to provide bridge financing for the transaction. Following the close of the transaction, Vulcan Materials will have approximately $3.7 billion in debt and a debt-to-capital ratio of approximately 50 percent. Vulcan Materials expects its significant operating cash flows will enable it to reduce its debt-to-capital ratio to 35 to 40 percent within three years of close, in line with its historic capital structure targets. The company intends to maintain an investment grade rating. The transaction is subject to the approval of a majority of Florida Rock shareholders, regulatory approvals and customary closing conditions. The Baker family, which founded Florida Rock, has entered into a voting agreement to support the transaction. Following the close, Florida Rock shareholders will own approximately 12 percent of the combined company. Goldman, Sachs & Co. acted as financial advisor to Vulcan Materials and Wachtell, Lipton, Rosen & Katz served as Vulcan Materials’ legal counsel. Lazard Freres & Co. acted as financial advisor to Florida Rock, and Weil, Gotshal & Manges and McGuireWoods served as Florida Rock’s legal counsel.
Despite the snow and ice that shut down most of official Washington, D.C. on Feb. 14 the Senate cleared a $463.5 billion spending measure to fund much of the government for the remainder of the fiscal year, which ends Sept. 30. The measure H.J.Res. 20 passed the Senate easily by a vote of 81-15. The legislation, which the president signed Feb. 15, provides funding for programs covered by the nine unfinished fiscal 2007 appropriations bills Included in the bill is funding for roads and highways at the authorized funding level of $31.9 billion. NSSGA and its Transportation Construction Coalition and Americans for Transportation Mobility partners achieved the authorized funding level for highways and transit as a result of a concerted advocacy effort. Also included in the continuing resolution is funding for the U.S. Geological Survey, the Environmental Protection Agency and the Mine Safety and Health Administration. All of these agencies received an increase over the FY ‘06 funding levelsSenate passage was achieved after Majority Leader Harry Reid (D-Nev.) used a parliamentary maneuver known as “filling the amendment tree” to block other amendments, citing the need to enact the bill before the current continuing resolution expired. By waiting until just before the deadline, Reid made it essentially impossible for Senate Republicans to vote against the spending measure without opening themselves to criticism that they voted for a government shutdown. Attention now turns to the FY ‘08 budget and appropriations bills. NSSGA will work to assure adequate funding for agencies with jurisdiction over programs of importance to the aggregates industry. (Source: National Stone, Sand & Gravel Association eDigest and Washington Watch) Sen. Patty Murray (D-Wash.) plans to reintroduce her bill to ban the use of asbestos in America. Sen. Murray introduced the bill in the last two Congresses. In the 109th Congress, her bill was rolled into the asbestos trust fund legislation that, despite best efforts of then Judiciary committee Chairman Arlen Specter (R-Penn.), did not clear the Senate. Sen. Murray plans to reintroduce the bill and hold a hearing in the Health, Education, Labor and Pensions (HELP) Subcommittee on Employment and Workplace Safety, despite the fact the Committee on Environment and Public Works has jurisdiction over the bill. Besides prohibiting the manufacturing, processing or distribution of asbestos-containing products, the previous bill proposed amending the Toxic Substance Control Act to require the U.S. Environmental Protection Agency to contract with the National Academy of Sciences to do the following: (1) study and describe the current state of science concerning the human health effects of exposure to asbestos and other durable fibers; and (2) make recommendations for uniform systems for exposure standards and protocols for detecting and measuring asbestos. The National Stone, Sand & Gravel Association (NSSGA) met with Sen. Murray’s staff and staff of Sen. Johnny Isakson (R-Ga.), the ranking Republican on the HELP subcommittee and a member of the Environment and Public Works committee, to ensure that an accurate definition is included in the Murray bill. NSSGA will analyze the rest of the Murray bill after its introduction and meet with Environment and Public Works committee staffs to ensure aggregate industry concerns are considered. (Source: National Stone, Sand & Gravel Association eDigest and Washington Watch)
The Department of Conservation’s California Geological Survey has released a new report and map that discusses aggregate supply and demand. It is designed as a tool to help local governments with land-use planning, especially as in regards to future infrastructure needs. The report – an update of a 2002 release – compares the anticipated 50-year demand for construction grade aggregate resources to the amount of resources currently permitted for mining by local lead agencies in 31 study areas throughout the state. The map shows these four areas with less than a decade’s worth of permitted resources:
All told, 10 study areas have permitted resources covering less than a quarter of their projected needs. Only six regions have permitted reserves covering 50 percent or more of their future needs. The Yuba City-Marysville region is the only area projected to meet 100 percent of its 50-year demand. Other regions with a seemingly adequate permitted supply of aggregate in the near future include the following: Barstow-Victorville, Eastern Merced County, Monterey Bay, and Palm Springs. The regions with the highest projected future need for aggregate are South San Francisco Bay, San Gabriel Valley, Temescal Valley-Orange County, Western San Diego County, and San Bernardino. Each of these regions is expected to utilize more than a billion tons of aggregate by 2056. Construction-grade aggregate, as defined in the report, is sand and gravel or crushed stone that meets specifications for use in “portland cement concrete aggregate” or “asphaltic aggregate.” It is used in the construction of houses, commercial and public buildings, highways, roads, bridges and other structures. Having a local supply of permitted aggregate is important because the cost – which currently ranges from about $7-$22 per ton at the plant site for the highest grade – can significantly increase as haul distances become greater. Construction sand and gravel is the leading non-fuel mineral commodity produced in the state as well as the nation. Californians consumed 235 million tons of construction-grade aggregate in 2005 – about 6½ tons per person. On average, 229 tons of aggregate are used in the construction of one house. “Currently, California has about 4.3 billion tons of permitted resources,” Parrish said. “In the next 50 years, the state is projected to need approximately 13.5 billion tons of construction grade aggregate. This figure does not account for accelerated construction programs as a result of major bond initiatives, or from reconstruction following a major, damaging earthquake.” In addition to studying and mapping mineral resources, the Department of Conservation ensures the reclamation of land used for mining; promotes beverage container recycling; regulates oil, gas and geothermal wells; studies and maps earthquakes and other geologic phenomena; and administers agricultural and open-space land conservation programs. To download a PDF copy of the report, please click here. (Source: Department of Conservation California Geological Survey) A three-judge panel from U.S. Court of Appeals for the District of Columbia Circuit upheld the Mine Safety and Health Administration’s (MSHA) final rule in diesel particulate matter (DPM). The case was upheld because, according to the decision, “MSHA has adequately demonstrated that DPM presents a significant risk to the health and safety of miners.” The National Stone, Sand & Gravel Association, as well as several other industry organizations, challenged the DPM rule, citing that “MSHA did not have sufficient evidence that DPM presents a risk to miner’s health, that MSHA unreasonably chose to regulate other substances as surrogates for DPM, and that the DPM exposure limits cannot feasibly be achieved by mine operators,” according to the Feb. 9 decision. Additionally, the petitioners argued that MSHA’s risk assessment was flawed “because the agency failed to consider whether pre-existing limitations on diesel exhaust gasses might also provide adequate protection against exposure to diesel particulate matter,” according to the written decision. The court, however, said that this argument “ignores the fact that DPM presents health risks independent of the risks posed by diesel exhaust gasses.”
Granite Construction Inc., headquartered in Watsonville, Calif., announced an organizational realignment of its business operations designed to accommodate growth of the company’s vertically integrated branch business in the west and improve profitability on its large, complex Heavy Construction Division projects. Implementation of the strategic and organizational realignment is currently underway and is expected to take approximately 12 months to complete. Highlights of the announcement include the following:
(Source: National Stone, Sand & Gravel Association eDigest and Washington Watch)
Hearing planned on MINER Act At Aggregates Manager e-News press time, a Senate Health, Education, Labor and Pensions (HELP) committee hearing on the MINER Act is planned for Feb. 28. The purpose of the hearing is to monitor implementation of the act. HELP committee Chairman Ted Kennedy (D-Mass.) and House Education and Labor committee Chairman George Miller (D-Calif.) have named strengthening miner protections as priority agenda items of their respective committees. NSSGA will closely follow efforts to strengthen the MINER Act that would adversely impact the aggregates industry. (Source: National Stone, Sand & Gravel Association eDigest and Washington Watch) U.S. Geological Survey’s Mineral Information Team faces funding cuts again Included in the Administration’s 2008 budget proposal is a continuing pattern of de-funding the U.S. Geological Survey’s Mineral Information Team (MIT). Specifically, the Minerals Resource Program (MRP), of which the MIT is a part, again is targeted for budget savings by cutting $2.614 million and 30 full time equivalent (FTE) positions. The MIT would incur a $600,000 cut and a loss of five FTEs. Further, the budget proposal notes the MIT reports would be limited to 70-80 mineral commodities strategic to the economy. [Note: There was no indication what would determine if a mineral is strategic or not.] Within the MRP, the budget request outlines the following actions to meet the goals of the administration: discontinues research on environmental consequence of mined and un-mined mineral deposits; discontinues research required in preparation for updating the 1995 National Assessment of Potentially Undiscovered Mineral Deposits; and reduces funding available for the MRP’s digital databases. (Source: National Stone, Sand & Gravel Association eDigest and Washington Watch) Transportation Construction Coalition D.C. Fly-In planned for May 8-9 The Transportation Construction Coalition (TCC) spring Fly-In is planed for May 8-9 at the Marriott Wardman Park Hotel in Washington, D.C. This year’s theme is “Transportation Investment for a Strong Economy.” There will be a TCC Congressional reception on May 8. The National Stone, Sand & Gravel Association will also hold a Government Affairs Committee meeting during the course of the fly-in. Details for the committee meeting are still to come. Hotel reservations may be made for the Marriott Wardman Park Hotel at 800-228-9290 or 202-328-2000. Note that you are part of the “TCC Fly-In” room block in order to receive the special rate of $249 per night available for the evenings of May 7-9. The cut-off date for hotel reservations at this rate is April 14. Additional registration and schedule details are to come. Polaris starts production at the Orca quarry VANCOUVER, B.C., Canada—Polaris Minerals Corp. has started production at its Orca Sand & Gravel Quarry, near Port McNeill, B.C. Commissioning trials at the Orca Quarry have now demonstrated that the process plant supplied by Metso Minerals Canada Inc. has met the design performance criteria and consequently production has commenced to build product inventories. Customary fine-tuning of the operation will be ongoing. Construction of the ship-loader is now virtually completed, in anticipation of the arrival of the first Panamax vessel, which is expected to transport Orca products to U.S. markets, before the end of March 2007. Construction is also advancing well at the Richmond Terminal in California, where the complex foundation work has been completed, Polaris says. To view recent images of the Orca Quarry, please visit the photo gallery on Polaris’ Web site at www.polarmin.com/orcasand/photogallery.php. Tilcon to spend $40 million to reduce noise, dust, and traffic in N.Y. town WEST NYACK, N.Y.—Tilcon New York Inc. will invest $40 million to reduce noise, dust and truck traffic surrounding its West Nyack quarry, company and town officials announced on Feb. 9. The joint agreement between Tilcon and Clarkstown stemmed from a Sept. 13 public hearing at which residents complained to representatives of the state Department of Environmental Conservation. At that time, the DEC, which regulates the quarry, assured town residents and officials that it would allow them more time to comment on Tilcon’s application to renew its five-year mining permit before any action was taken. But on Sept. 25, the DEC, which regulates the quarry, renewed Tilcon’s permit without any input from the town. And though the agency said it would still accept public comment on Tilcon, Town Supervisor Alexander Gromack said changes at the busy quarry would be up to Tilcon. Since then, Tilcon, working with the town and the DEC, has come up with measures it says will reduce residents’ complaints dramatically. (Source: The Journal News online edition. Original publication Feb. 9, 2007. Article by Christina Jeng) Joint venture creates company for mining risk analysis, crisis avoidance and communications, and safety and training Christensen, a global capital-markets advisory firm, and Engineering Consulting Services Inc. (ECSI), a multi-disciplinary engineering, mining, and environmental-services consultancy have announced the creation of their joint venture, Global Mining RiSC LLC. This new corporation will be providing uniquely integrated, comprehensive risk analysis; safety and training oversight; and crisis avoidance and communications services for the worldwide mining industry According to a recent, independent investigative body, the Mine Safety Technology and Training Commission, sponsored by the National Mining Association, NMA: “At the heart of (the commission’s) approach is the call for a new paradigm for ensuring mine safety: one that focuses on systemic and comprehensive risk-management as the foundation from which all life-safety efforts emanate.” It is expected that regulatory agencies, financiers, and insurers will see the benefits of GMR services for mining companies. In the spirit of the Commission’s findings, GMR’s goal is to partner with senior management at coal, hard rock and aggregate operations to do the following:
To view the official press release on this venture and more details, please click here. (Source: Global Mining RiSC)Holcim and the World Conservation Union join forces to conserve biodiversity Leading building materials company Holcim and the World Conservation Union (IUCN) signed a cooperative agreement on Feb. 19 to work jointly on ecosystem conservation and biodiversity issues relevant to the building materials sector. Julia Marton-Lefèvre, Director General of the World Conservation Union and Markus Akermann, CEO Holcim Ltd., have signed a three-year cooperative agreement to develop new ecosystem conservation standards for the Holcim Group. In placing biodiversity conservation at the core of the agreement, the strategic alliance between Holcim and IUCN is breaking new ground in the industry. The main areas of collaboration are the following:
IUCN and Holcim in Sri Lanka have agreed on the first projects to review the quality of biodiversity conservation activities at Holcim sites in Sri Lanka and to facilitate existing quarry rehabilitation planning and implementation. Holcim Lanka on her part will bring in technical expertise to contribute to the rehabilitation efforts of coral ecosystems. Also, the use of sustainable produced biomass as an alternative fuel will be explored to open up an additional source of income for the communities around Holcim sites. (Source: Holcim) Brief filed in Supreme Court Endangered Species Act Case; outcome could delay transportation projects One of this year’s most significant transportation-related environmental cases will soon come before the U.S. Supreme Court and the American Road & Transportation Builders Association (ARTBA) in partnership with the Nationwide Public Projects Coalition, filed a “friend of the court” brief Feb. 20 in potentially precedent-setting litigation involving the Endangered Species Act (ESA). At issue is a decision by the U.S. Court of Appeals for the Ninth Circuit, which could severely impact the decision-making process for many vital transportation projects by elevating ESA considerations, above all other factors. “If the Ninth Circuit’s reasoning is allowed to stand, the ESA will be greatly broadened. The statute will, in effect, become a ‘trump card’ in relation to the other environmental requirements of the transportation planning process,” the ARTBA brief said. “ESA considerations will have to be not only examined in terms of transportation construction projects, but also any future development that may be linked to those projects. This type of prediction would be impossible to measure. As a result, transportation projects could face a substantial increase in ESA-related delays because planners would not be able to forecast indirect impacts to species caused by their projects,” the brief argued. ARTBA also highlighted the negative public health and safety impacts concerns associated with delaying transportation projects. If the U.S. Supreme Court allows the Ninth Circuit Court’s decision to stand, ARTBA said, “the ESA will become the driving force behind a review process driven more by speculation over future land use impacts on species habitat than scientific certainty governed by reason.” The case will be argued April 17 with a decision anticipated sometime later in the year. A copy of ARTBA’s legal brief may be accessed by clicking on the “legal advocacy” section of ARTBA’s Web site at www.artba.org. (Source; American Road & Transportation Builders Association) Mergers & Acquisitions Vulcan Materials to acquire Florida Rock in $4.6 billion transaction See the lead story in this e-newsletter for more details. Polaris enters into agreement to issue, sell 6 million shares VANCOUVER, British Columbia – Polaris Minerals Corp. announced that it has entered into an agreement with a syndicate of underwriters led by GMP Securities L.P. and including Canaccord Capital Corporation, CIBC World Markets Inc., Orion Securities Inc., TD Securities Inc. and Wellington West Capital Markets Inc., on a bought deal basis, to issue and sell 6 million common shares at a price of $9 per share for gross proceeds to the company of $54 million. For more information, go to www.polarmin.com/newsroom/newsrelease.php?pcid=630 (Source: Polaris Minerals Corp.)
Lafarge: Q4 revenue up 10 percent Lafarge SA, the world’s largest maker of cement, said on Feb. 14 that fourth-quarter revenue rose 10 percent as the company benefited from rising demand. Total revenue for the three months through Dec. 31 rose to euro4.2 billion (US$5.5 billion) compared with euro3.8 billion in the same period a year earlier, the company said in a statement. The figures do not include income from Lafarge’s roofing business, which it is selling. Full-year sales rose 17 percent to euro16.9 billion (US$22 billion). Like many other French companies, Lafarge reports sale figures ahead of its full earnings. The company will publish its profit figures on Feb. 23. The shares gained 0.2 percent to euro116.3 (US$15.11) in Paris. (Source: Associated Press) Knife River/MDU Resources Group has record year BISMARCK, N.D.—MDU Resources Group Inc. had a record year in 2006, increasing consolidated earnings by $40.7 million over 2005, the company says. The company announced on Feb. 13 that its net profits increased from $274.4 million in 2005 to $315.1 million in 2006. The company’s earnings per common share increased 20 percent, from $1.53 a share in 2005, to $1.74 a share in 2006. Much of the growth was attributed to a 56 percent increase in construction materials and mining resources, from $55.1 million in 2005, to $85.7 million in 2006, according to Terry D. Hildestad, president and CEO. Construction services alone almost doubled last year’s earnings of $14.6 million, with record earnings of $27.8 million. The company expects revenues in 2007 to be similar to 2006’s record levels. Pipeline and energy services also had record earnings, increasing from 2005’s $22.1 million to $30 million. But the company lost 80 percent of its independent power production earnings in 2006, mainly due to the sale of equity interest in a Brazilian electric generating facility. The sale of that facility cost MDU Resources Group $15.6 million in earnings, according to a news release. Lower revenues and higher interest from two other electric generating facilities also reduced earnings. The company says it has retained the Goldman, Sachs & Co. investment bank as a financial adviser and was exploring the sale of independent power production assets of its Centennial Energy Resources LLC subsidiary, based in Bismarck. For 2007, earnings per common share are projected in the range of $1.50 to $1.70, compared to 2006’s guidance of $1.45 to $1.65. Last year, MDU Resources Group Inc. bought into or acquired six companies, the most recent being a $50 million joint investment with Companhia Energetica de Minas Gerais and Brascan Brasil Ltda. in acquiring Schahin Energia’s interest in three electric energy transmission lines that Schahin had owned jointly with Cia. Technical de Engenharia Eletrica-Alusa in Brazil. Alusa continues its ownership in these transmission assets. In September, Knife River Corp., which is under the MDU Resources Group umbrella, acquired Kent’s Oil Service, a 15,000-ton liquid asphalt facility, founded in 1984 and headquartered in Stockton, Calif. Knife River also bought Wm. Winkler Co. and Valley Asphalt and Paving - both Spokane, Wash., companies that were acquired in April. MDU Resources Group is still in the process of finalizing the acquisition of Washington-based natural gas company Cascade Natural Gas Corp., which would effectively double the number of natural gas utility customers, according to a news release. MDU Resources Group Inc. is an investor-owned company based in Bismarck. It’s the parent company of Montana-Dakota Utilities, which provides electricity to portions of eastern Montana, North Dakota, South Dakota, and Wyoming. (Source: Bismarck Tribune. Reach reporter Crystal Reid at 250-8261 or at crystal.reid@bismarcktribune.com.) Caterpillar to buy back $7.5 billion in stock Caterpillar Inc., a maker of heavy construction and mining equipment, said on Feb. 15 that it plans a new $7.5 billion share buyback during the next five years, citing its confidence in long-term growth prospects and cash-flow generation. The Peoria, Ill.-based company said its board of directors authorized the repurchase program, which will start when the current $6.4 billion buyback program is completed in the next few months, a year and a half ahead of schedule.” “We view the new share buyback program as a positive for the stock as it provides the company with higher flexibility to meet its earnings outlook,” Merrill Lynch analyst Andrew Obin said in a research note. But Obin said he was not raising earnings-per-share estimates of $5.60 in 2007 and $6.05 in 2008, because the estimates already modeled in a buyback. Caterpillar said its priorities for the use of cash remain capital expenditures, acquisitions, funding pension programs and raising dividends, with the rest devoted to buybacks. Separately, the company is in talks to raise its stake in a construction machinery venture with Japan’s Mitsubishi Heavy Industries Ltd., to beef up Caterpillar’s presence in Asia. Mitsubishi said Caterpillar is looking to raise its stake in the 50-50 joint venture to about two-thirds. (Source: Reuters/Aggregate Research Industries)Hanson PLC releases preliminary results 2006 Highlights of the results:
Key operating highlights Record year for Hanson: 15.1 percent increase in operating profit, up £74m, to £563m £558m invested in acquisitions which contributed £48m to operating profit. Strong selling price discipline recovering cost increases and reflecting the underlying economic value of our long term mineral reserves. Aggregates North America operating profit increased by 31 percent. Hanson says it expects further progress in 2007. Hanson CEO Alan Murray says that 2006 has been a record year for Hanson. “This was above our expectations at the time of our December trading statement, primarily due to a strong finish in our North American Aggregates division and additional property profits,” Murray says. “We have maintained earnings growth momentum, recent acquisitions are performing well and our selling price discipline has been maintained. We expect to make further progress in 2007.” Overview 2006 has been a record year for Hanson, with operating profit increasing by 15.1 percent to £562.7m, following an increase of 15.4 percent in 2005. Acquisitions made in 2006 added £47.9m to operating profit. Property profits increased by £17.8m to £32.7m (£14.9m). Heritage operating profit from our six divisions increased by £12.2m. Strong selling price discipline led the heritage improvement, recovering significant input cost increases as well as reflecting the underlying economic value of our long term mineral reserves. Group operating margin increased by 0.7ppts to 12.8 percent (12.1 percent). Our North American Aggregates division delivered an excellent result, with operating profit 30.7 percent ahead of 2005. This was led by strong selling price discipline and a good performance from acquisitions made in the year, most notably Material Service Corporation. We achieved an average aggregates price increase of 12.1 percent, reflecting both additional input cost increases and the increasing scarcity of mineral reserves in some of the US markets. 2006 was a good year for our North American Building Products division, increasing operating profit†# by 12.8 percent over 2005. Acquisition earnings, most notably from PaverModule in Florida, and operating profit increases in Pipe and Precast and Roof Tile, more than offset a reduction in operating profit from our Brick operations due to weakening of the residential market. The majority of our products are sold into the infrastructure, industrial and commercial construction sectors which remain robust. Our businesses in the U.K. are performing well in a challenging market. In U.K. Aggregates, the asphalt market was particularly difficult in 2006. Our asphalt volumes decreased by nearly 10 percent and significant cost increases could not be fully recovered through selling price rises. Despite this, the division increased operating profit by 13.2 percent, benefiting from the acquisition of Civil and Marine in March 2006, and from strong selling price discipline and cost control. In the U.K. Building Products division, difficult trading conditions were experienced in 2006, largely due to weak brick demand in the repair, maintenance and improvement (RMI) sector. Encouragingly, however, the division improved its earnings in the second half of the year compared to the second half of 2005. Operating profit increased by £5.2m, or 13.8 percent, including additional property profits of £6.8m. Another good performance was delivered by the Australia and Asia Pacific division, supported by strong selling price increases and buoyant demand in Western Australia and Queensland. In addition, results from Malaysia and Hong Kong improved. Good progress was made in Continental Europe, with a 9.5 percent increase in operating profit in 2006. Profit before taxation increased by £51.5m, or 12.0 percent to £480.8m in 2006. Taxation on continuing operations in 2006 was £79.7m, equivalent to an effective tax rate on profit before taxation of 16.6 percent. For the full financial report, go to www.hanson.biz/index.asp?PageID=299&Year=2007&NewsID=527#.
Applications A New Venture With Old Material
by Larry Trojak In today’s competitive economic climate, the most successful businesses are those that recognize opportunity, seize it, and work it to their benefit. Growing one’s business to include complimentary functions, using connections made in one area to boost performance in another, and employing the best processing technology available, are examples of this approach, and Orlando Recycled Materials (ORM) has used them all. For its efforts, the Florida company — in operation for just about a year — has already established itself as a serious player in the local concrete recycling market and is poised for even further growth. An offer he couldn’t refuse Orlando Recycled Materials is the brainchild of Carlo Rutigliano, president and owner of three other firms, one in his native New York, two others in the Orlando area.
In Orlando, he runs an excavation contracting company called Metro Services of Florida, Inc., as well as a trucking company, CEC Trucking. “In the course of doing projects, I often found myself having to buy crushed stone and rock from area crushing firms — at the same time that I was hauling concrete away from reconstruction and demolition projects,” he says. “I always felt there had to be a better solution and got it in an offer from one of Rinker Materials’ local plants.” That offer, he says, was immediately intriguing: establish a crushing company to process material from some of Rinker’s area locations in exchange for use of land at one of the material supplier’s block plants. “It was a plan that worked to everyone’s benefit,” Rutigliano says. “Rinker would have a cost-effective means to dispose of its excess material and we would get the product we so badly needed. It was definitely a win-win for everyone. All that was needed was for us to put it into action, so we started the process of establishing the new company.” Plants for plants When deciding on the key components of the operation — the crushing and screening plants — Rutigliano looked at a number of products from different manufacturers but went with a company with which he already had a successful track record. As part of the clearing operation, Rutigliano says the company used to dewater sites and achieved “great performance” separating out vegetation with a screen from Tualatin, Ore.-based Construction Equipment Company (CEC), Rutigliano says. “We already had excellent support for that line through Bob Ferguson at the Orlando branch of Pioneer Machinery, so we were confident that parts availability would never be an issue,” he says. “CEC also had a very competitive price; based on all those factors, we went with them for both the crushing and screening machinery.” The crushing/screening plant Rutigliano set in place at the Rinker site consists of a CEC Model 102 by 115 Track Impact Crusher feeding a CEC Screen-It 6 by 16 dual-deck screen. Nothing goes to waste
ORM’s site takes in material from a 15-mile radius and includes discarded product from Rinker plants as well as debris from area contractors. Although they don’t accept traditional construction and demolition waste which can contain wood, sheetrock, and other materials, Rutigliano says much of the material still needs some pre-processing prior to crushing. “The majority of material we get has to be downsized in some manner, so we have a Pemberton concrete pulverizer mounted on one of our excavators for that function,” Rutigliano says. “We often get structure boxes from utility projects that have been damaged or are being replaced. These concrete structures are heavy with rebar, so we pulverize them, pull the steel out and stockpile it. When we get a sufficient pile of steel, we send it off to be recycled. We really try not to waste anything here.” As something of an added bonus, ORM’s crushing site sits adjacent to a ready-mix plant which, by nature, generates a decent amount of waste concrete from its trucks’ washout process. As part of an agreement, the company stockpiles its hardened washout material and Rutigliano’s trucks remove it, ultimately benefiting both parties involved. Putting it to good use
While Rutigliano uses a good portion of the product he creates on his own projects, he has also become a supplier to other area contractors who use the material as road base or in drainage situations. “Right now our material uses concrete fines rather than lime rock, so it can only be used by contractors involved in private projects,” Rutigliano points out. “However, as lime rock in the area becomes harder to find and more costly, the Department of Transportation (DOT) is looking at alternatives — and ours is one of those alternatives. We are very close to getting DOT-certification for our product, which will open us up to more demand.” The CEC crushing system in place at ORM allows the company to generate three separate products: a 1/2-inch minus base rock, generally used as a stabilizer; a modified #57 stone measuring 1/2-inch to 1-1/4-inch which can be used as a substitute for No. 57 virgin aggregate; and overs measuring 2 to 4 inch, which can be used as pipe bedding as well as in other similar applications. In addition, ORM has responded to a recent customer request by modifying its top deck screen size and recirculating the No. 57 product to allow creation of a pea rock for use in manufactured concrete products. Bigger and better
ORM currently runs its plant about 8 to 10 hours a day and is generating volumes in the 18,000-tons-a-month range. While Rutigliano is pleased with those numbers, he already has his sights set on taking the operation to the next level. “Things have really changed since we first looked at setting up this company,” he says. “Today, I can acquire a good deal more material than I thought I could back then.” The crusher in place now is CEC’s smallest model, Rutigliano says. Although the machine “is doing an excellent job for us,” he says, “we’re looking towards growth. In fact, we are close to wrapping up the purchase and permitting of a 20-acre site which will allow us to take in more material, improve the separation of that material, and increase production.” To make that rise in production happen, Rutigliano says he has already purchased a second CEC crusher, a Model 133 by 152 Dual Recycling Plant which should allow production rates as high as 300 tons per hour or 48,000 tons per month. With that purchase, ORM has gone from the smallest plant CEC makes to the largest, yet Rutigliano opted to keep his current crusher rather than trade it in upon delivery of the larger one. “We have had opportunities to do contract
mobile crushing projects in the past, but had to severely limit
those because doing so would cause us to fall behind on production
in the yard,” Rutigliano explains. “We will now be able to fully
dedicate that smaller crusher to a mobile operation and expand our
capabilities even further. This area shows no signs of slowing down
its growth and we’re confident that we will be equipped to meet
those needs.” Larry Trojak is owner and president of Trojak Communications, a Ham Lake, Minn.-based marketing communications company. In his 18 years in business, Trojak has written extensively for the aggregates processing, asphalt production, construction, recycling, and scrap processing markets. Trojak wrote this article on behalf of Construction Equipment Co. (CEC). Photos by Larry Trojak for Construction Equipment Co.
25 percent more screening area McCloskey International has introduced the S130 vibratory flatdeck screening system designed to give aggregate producers more cost-effective choices when they plan for increased production capacity.
The screening system is equipped with a large 10.5 cubic yard hopper – a typical capacity for other 20-foot screening plants. The ‘taper out’ design of the hopper strongly resists bridging and includes a large remote controlled tipping grid as standard. Options include a lengthened 13.5 cubic yard high capacity hopper and a heavy-duty live head. The screening plant is based on the new “high-energy” screen box design developed by McCloskey to maximize available vibratory power with a longer stroke and heavy-duty eccentrics. The screener also provides an expanded range of control over several key areas of the screening process including: settings for the screen box angle ranging from 25 to 38 degrees; adjustable vibration stroke from 6 mm up to 10 mm; and shaft speeds adjustable from 950 to 1,130 rpm. Conveyors on the machine are engineered to maximize stockpiling capacity, with discharge heights up to 15-ft., 11-in. on the side conveyors. The feeder and tail conveyors are a full 48-in. wide, and the side conveyors feature deep chevrons and high angle troughing idlers to prevent material rollback and spillage. The tail conveyor features a drop-down design to simplify maintenance and screen changes. Screen sections are also interchangeable with screens for the company's S190 model.
Telsmith engineered its new PA6060 for high-volume crushing with minimal maintenance requirements. The primary Andreas-style impact crusher can handle up to 40-inch feed. It has a solid-type sculptured rotor for higher inertia and greater blow bar backing support; a hydraulic tilting feed plate that safely eliminates bridging; interchangeable, reversible mono-block aprons for wear parts cost control; oversized bearings; and advanced hydraulic controls that reduce maintenance requirements. Construction worksite Spanish-English books available The American Road & Transportation Builders Association (ARTBA) is offering two publications to strengthen jobsite communications with Spanish-speaking employees. The pocket-size Spanish-English dictionary features nearly 1,500 words and terms frequently used on construction jobsites. The “Spanish-English Construction Communication” book, a companion publication, contains thousands of words broken into lists of safety terms, related slang, and common sentences related to each phase of construction. Discounts are available for bulk orders. For more information or to order copies, contact ARTBA’s Christy Woodall at 1-888-821-9653 or at cwoodall@artba.org. The publications can also be purchased online at www.artbastore.org.
FMC Technologies has announced that its Material Handling Solutions business has signed an exclusive supplier agreement with Resin Systems Inc. (RS), for the production of Vroll composite tubing to be used in the manufacture of a new line of composite Link-Belt Conveyor Idler Rolls. RS will sell its VRoll tubing exclusively to FMC for its new line Composite Idler Rolls.
Bob Laramore, a highway construction and safety executive with more than 35 years experience, has been named American Road & Transportation Builders Association (ARTBA) director of risk reduction services and managing director of the association’s Materials & Services (M&S) Division. President Bush has named Lt. Gen. Robert L. Van Antwerp as the new chief of the U.S. Army Corps of Engineers, according to the National Stone, Sand & Gravel Association’s eDigest and Washington Watch e-newsletter. If confirmed by the Senate, Gen. Van Antwerp will succeed Lt. Gen. Carl A. Strock. Van Antwerp currently serves as the head of the U.S. Army Accessions Command.
In this role, he will continue to plan, direct, and control all activities, which include, but are not limited to, production, distribution, quality assurance and geologic/mine services for TXI’s aggregate production facilities in Texas and Oklahoma. Gerik joined TXI in 1997 as sales manager of its North Texas Aggregate business and was promoted to general manager in 1998. In 2001, he assumed responsibilities as the general operations manager for TXI’s Texas/Oklahoma aggregates business. He currently serves as the past chairman of the Board of the Oklahoma Aggregates Association, an industry trade association based in Oklahoma City. The Board of Ireland-based CRH has appointed Kieran McGowan as the chairman designate to succeed the present chairman. Pat Molloy, who has been chairman since May 2000 and a board member since 1997, will retire after the company's Annual General Meeting, which is scheduled for May 7. McGowan, who joined the CRH’s board in 1998, was CEO of IDA Ireland until December 1998. He is a non-executive Director of a number of companies including Elan Corporation plc, Irish Life & Permanent plc and United Drug plc. He is also a director of Enterprise Ireland and chairman of the Governing Authority of University College Dublin. Sponsored by:
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With 130 square feet of screen cloth totaled
across both decks, the 5 by 14-ft. screen box of the screening
system offers up to 25 percent more screening area than other
systems, according to the manufacturer. Combined with a lower
screening deck of a full 5-ft. by 12-ft., the S130 screen box
provides a significant increase in production rates compared to
other screeners in a similar nominal range, the company says.
High-volume primary crusher
Texas Industries, Inc. has promoted Edwin J.
Gerik, Jr. to vice president of operations for Texas/Oklahoma
Aggregates.