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December 20, 2007
Vol. 3, No. 24
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A proposed final judgment and competitive impact statement have been filed with the United States District Court for the District of Columbia in United States v. Vulcan Materials Co., et al., Civil Action No. 1:07-cv-2044. On Nov. 13, 2007, the United States filed a complaint to obtain equitable and other relief against defendants Vulcan Materials Co. and Florida Rock Industries, Inc. to prevent Vulcan’s proposed acquisition of Florida Rock. The acquisition, however, was finalized in mid-November. Vulcan is currently in the process of divesting some of the Florida Rock operations. The complaint alleges that Vulcan’s acquisition of Florida Rock would substantially lessen competition in the production, distribution, and sale of coarse aggregate in and around Atlanta, Ga.; Columbus, Ga.; Chattanooga, Tenn.; and South Hampton Roads, Va. The proposed final judgment, filed on Nov. 13, 2007, requires defendants to divest Florida Rock aggregate quarries in Northwest, West, and Southwest Atlanta, Ga.; Columbus, Ga.; Chattanooga, Tenn.; and Richmond, Va. Additionally, Vulcan must divest a Florida Rock distribution yard located in Chesapeake, Va., that receives coarse aggregate by barge from Florida Rock’s Richmond quarry; a Vulcan aggregate quarry in South Atlanta, Ga.; and a Vulcan quarry under development in Southeast Atlanta, Ga. Copies of the complaint, proposed final judgment, and competitive impact statement are available for inspection at the Department of Justice, Antitrust Division, Antitrust Documents Group, 325 7th Street, NW., Room 215, Washington, D.C. 20530 (Phone: 202-514-2481), on the Department of Justice’s Web site at www.usdoj.gov/atr, and at the Office of the Clerk of the United States District Court for the District of Columbia, Washington, D.C. Copies of these materials may be obtained from the Antitrust Division upon request and payment of a copying fee set by Department of Justice (DOJ) regulations. Public comment is invited within 60 days of the date of this notice. Such comments, and responses, will be published in the Federal Register and filed with the Court. Comments should be directed to Maribeth Petrizzi, Chief, Litigation II Section, Antitrust Division, U.S. Department of Justice, 1401 H Street, NW, Suite 3000, Washington, D.C. 20530 (Phone: 202-307-0924). The case number is 1:07-cv-02044 Notes about the suit: Plaintiff United States of America, acting under the direction of the Acting Attorney General of the United States, brings this civil antitrust action to obtain equitable and other relief against defendants Vulcan Materials Co., and Florida Rock Industries, Inc. to prevent Vulcan’s proposed acquisition of Florida Rock. The U.S. DOJ complains and alleges as follows: I. Nature of the Action 1. On Feb. 19, 2007, Vulcan and Florida Rock signed a definitive agreement for Vulcan to acquire Florida Rock in a cash-and-stock transaction valued at approximately $4.6 billion. The total blended cash-and-stock consideration for this transaction is approximately $68 per share. 2. Vulcan and Florida Rock both produce and distribute in the United States building materials, including, among other things, construction aggregates (which includes coarse aggregate), and ready-mix concrete. Vulcan is the largest supplier of construction aggregates in the United States. Florida Rock is also a leading supplier of construction aggregates in the United States. Combined, Vulcan and Florida Rock will have construction aggregates reserves totaling about 13.9 billion tons. 3. The United States brings this action to prevent the proposed acquisition of Florida Rock by Vulcan because it would substantially lessen competition in the production, distribution, and sale of coarse aggregate in and around Atlanta; Columbus, Ga.; Chattanooga, Tenn.; and South Hampton Roads, Va., in violation of Section 7 of the Clayton Act, 15 U.S.C. 18. II. Parties to the Proposed Transaction 4. Defendant Vulcan is a New Jersey corporation with its principal place of business in Birmingham, Alabama. Vulcan produces, distributes, and sells, among other products, construction aggregates, ready-mix concrete, hot-mix asphalt, and asphalt coating to customers in 21 states, the District of Columbia, and Mexico. 5. Vulcan is the largest producer of construction aggregates in the United States. It has more than 300 facilities for the production and distribution of construction aggregates and other products. In 2006, Vulcan shipped approximately 255 million tons of construction aggregates, the majority of which was coarse aggregate. In 2006, Vulcan reported total sales of about $3 billion. 6. Defendant Florida Rock is a Florida corporation with its principal place of business in Jacksonville, Fla. Florida Rock produces, distributes, and sells in the Southeastern and mid-Atlantic states, among other products, construction aggregates, ready-mix concrete, pre-stressed concrete, and cement. 7. Florida Rock is one of the largest United States suppliers of construction aggregates. In 2006, Florida Rock shipped approximately 45 million tons of construction aggregates, the majority of which was coarse aggregate. In 2006, Florida Rock reported total sales of approximately $1.4 billion. III. Jurisdiction and Venue 8. Plaintiff United States brings this action under Section 15 of the Clayton Act, as amended, 15 U.S.C. 25, to prevent and restrain defendants from violating Section 7 of the Clayton Act, 15 U.S.C. 18. 9. Defendants produce, distribute, and sell coarse aggregate and other products in the flow of interstate commerce. Defendants’ activities in producing, distributing, and seIling these products substantially affect interstate commerce. This court has subject matter jurisdiction over this action pursuant to Section 12 of the Clayton Act, 15 U.S.C. 22, and 28 U.S.C. 1331, 1337(a), and 1345. 10. Defendants have consented to venue and personal jurisdiction in this judicial district. IV. Trade and Commerce A.The Relevant Product Market 11. Construction aggregates consist primarily of crushed stone, gravel, and sand produced from natural deposits of various materials and removed from quarries, mines, or pits. 12. Coarse aggregate is a type of construction aggregate. Coarse aggregate is crushed stone produced at quarries or mines and used for, among other things, road base and the production of ready mix concrete and asphalt. Coarse aggregate typically is mixed with other materials to produce ready-mix concrete and asphalt. Different sizes of coarse aggregate are needed to meet different project specifications. 13. There are no reliable substitutes for coarse aggregate because it differs from other products in its physical composition, functional characteristics, customary uses, consistent availability, and pricing. To the extent that any substitutes exist, customers already use these to the full extent possible in light of the limits on their availability and the amounts that can be used in a given product, and could not use more of them in place of coarse aggregate in response to an increase in the price of coarse aggregate. 14. A small but significant post-acquisition increase in the price of coarse aggregate would not cause the purchasers of coarse aggregate to substitute another product or otherwise reduce their usage of coarse aggregate in sufficient quantities so as to make such a price increase unprofitable. 15. Accordingly, the production, distribution, and sale of coarse aggregate is a line of commerce and a relevant product market within the meaning of Section 7 of the Clayton Act. B. The Relevant Geographic Markets 16. Coarse aggregate is a bulky, heavy, and relatively low-value product. The cost of transporting coarse aggregate is high compared to the value of the product. 17. Transportation costs limit the distance coarse aggregate can be economically transported from a quarry or mine to a job site or a ready mix concrete or asphalt plant. The geographic area within which a coarse aggregate supplier can compete most vigorously thus is limited by the cost of hauling the coarse aggregate. As a result, its distance from customer plants or project sites relative to other suppliers limits the competitiveness of a coarse aggregate supplier in a given area. 18. Florida Rock owns and operates a coarse aggregate quarry located in Cedarton, Georgia, known as the Six Mile quarry. This quarry serves a geographic area that includes, among other areas, all or part of Floyd, Polk, Haralson, and Bartow Counties in Georgia (referred to collectively as Northwest Atlanta). Customers with plants or jobs within Northwest Atlanta may, depending on the location of their plant or job sites, also economically procure coarse aggregate from Vulcan’s Adairsville, Bartow, and Rockmart quarries and from another competitor’s quarry located in Cartersville, Georgia. Other quarries cannot on a regular basis compete successfully for customers with plants or jobs in Northwest Atlanta because they are too far away and the hauling costs are too great. 19. A small but significant post-acquisition increase in the price of coarse aggregate to customers with plants or jobs in Northwest Atlanta would not cause those customers to procure coarse aggregate from quarries farther away than those identified in paragraph 18 in sufficient quantities so as to make such a price increase unprofitable. (Source: Justice Department Documents and Publications, Federal Register page No. 68180, citation 72 FR 68180, and Aggregates Manager reports.) The U.S. Mine Safety and Health Administration (MSHA) began assessing civil penalties using the revised penalty formula on April 23 and recently issued a table outlining the differences between the revised structure and its predecessor standard for the stone and sand and gravel mining sector. All information was sourced from the Office of Assessments within MSHA. Under the S-MINER Act now under consideration in Congress, non-S&S (Significant & Substantial) citations would be assessed a minimum of $500 each. This would be equal to a whopping 530 percent increase more than 2006 non-S&S assessments. The changes already in place are a 280-percent increase more than 2006 levels. Using the same exponential increases that have been shown in non-S&S citations, the average S&S citation penalty under S-MINER would be about $2,500, and this is very likely a conservative estimate.
(Source: National Stone, Sand & Gravel Association)
“At the request of the community, we are now considering an alternative site on the property for exploration, which is farther away from the Cupertino neighborhood,” said Marvin Howell, a Hanson Aggregates West land-entitlement and real estate director, in a statement. He did not elaborate. During two meetings held in June and July, local residents complained that the new pit would move the noise, dust and other pollution of the mine closer to homes. The meetings were held to take public input on the environmental impacts of the new pit, which is included in a proposed amendment to nearly triple the size of Hanson’s reclamation plan to 917 acres. State mining law requires a reclamation plan for areas disturbed by mining. It specifies how the company, bought in May by Germany’s Heidelberg Cement AG for $15.8 billion, must return the land to a usable condition when mining is finished. The pit may be relocated farther to the north, said Mark Connolly, a Santa Clara County planner working on Hanson’s application, noting that he has not seen any definitive proposal. Connolly said that the environmental impact report required to approve the amendment is held up indefinitely until Hanson applies for a county planning commission hearing to determine whether the company has a vested right to mine without a permit in the proposed new pit, as it claims. “Because they’re going into an area where it wasn’t originally recorded that there was an intention to mine, they have to prove that there was an intent to mine there (prior to the passage of the State Mining and Reclamation Act of 1975),” said Connolly. A permit would otherwise be necessary. “The onus is on the applicant,” Connolly said. Residents also continue to rail against air emissions from the plant, which burns coal 24 hours per day and seven days per week to produce 1.6 million tons of cement per year. “Eventually the goals are to...have the pollution reduced that’s coming out of the Hanson plant,” said Joyce Eden, a member of West Valley Citizen Air Watch, which met on Nov. 20 with Bay Area Air Quality Management District engineers. Howell was not available for comment about emissions, but said in July that local cement is better than cement produced in China, for example, which causes higher pollution in its production and transportation. Hanson provides two-thirds of the county’s cement, he said, adding that Hanson is heavily regulated and will comply with emissions laws. In particular, the group wants to know how Hanson’s emissions are measured, a question the district has not answered yet, she said. “We got a little information, but we’re still not clear and we’re going to be following up on that,” said Eden. “You would think they’d be able to answer that with clarity.” Emissions statistics at Hanson are based on periodic testing by BAAQMD staff, combined with information Hanson submits annually about its production and fuel usage. The only emissions that are tested continuously by actual instruments in the smokestacks are nitrogen oxides and sulfur oxides, said Brian Bateman, district director of engineering. Hanson was the 62nd highest emitter of mercury in the United States in 2005, according to a USA Today report based on U.S. Environmental Protection Agency (EPA) data. It put out 523 pounds of airborne mercury in 2005, an increase from 212 pounds in 2000, according to the EPA. Mercury gathers in fish and is hazardous to fetuses, infants and children. The EPA introduced a rule in 2005 that aims to reduce mercury emissions from coal-burning power plants through a cap-and-trade scheme, but there is no such rule for cement plants. Topping Eden’s list of concerns was small particles, which are 2.5 micrometers in diameter and smaller. They can be inhaled deep into the lungs. “From a health standpoint, people dying prematurely, it’s hard to beat the small particles,” said professor Kirk Smith, an environmental health expert at the University of California, Berkeley’s School of Public Health. During the week of Dec. 10, 2006, the concentration of small particles in the county’s air averaged 8 micrograms per cubic meter of air, according to the California Air Resources Board. The next week, the average was nearly 22 micrograms per cubic meter. The county’s small particle concentration exceeded the EPA’s standard — 35 micrograms per cubic meter — on 94 days in 2006, placing it among the state’s 10 worst. Hanson’s share appears to be small. The plant put out 40 tons of small particles in 2005, the most recent year data is available, while about 6,117 tons were emitted in the county during 2006, according to the ARB. Also, while Hanson was the second highest stationary source of benzene — a carcinogen — in the Bay Area in 2005 and a major emitter of carbon monoxide, nitrogen oxides and sulfur oxides, its emissions of these chemicals pale in comparison to those from on-road vehicles. (Source: Bay Area News Group, Dec. 11, 2007. By Cody Kraatz) The Stoneworks gravel pit in the South Valley was supposed to have been closed by Dec. 3, but a judge gave it a reprieve. The pit operation lacked a valid special-use permit and was to close under an agreement with Bernalillo County. District Judge Geraldine Rivera said Tuesday the gravel mining and crushing operation can stay open to sell off its inventory until March 31, despite the county’s pleas that the agreement to shut it down by Dec. 2 should be honored. The owner of the business, Curtis Slade, and Ron Douglass, the owner of the property near Pajarito Mesa where the pit sits, signed an agreement with Bernalillo County in June that said The Stoneworks would cease mining and crushing by Oct. 2 and be completely cleaned up and shut down by Dec. 2. The county at the time said the special-use permits on the property were void. County officials inspected the property Monday [Dec. 3], according to Zoning, Building and Planning Division head Sandy Fish. Fish said they found that while major operations have stopped, the cleanup of leftover sand and gravel is not complete. Slade requested an emergency hearing so he could have more time to sell the material he had already mined and processed. Slade’s attorney, Pete Domenici Jr., said 2,000 yards of asphalt and 33,000 yards of concrete remain on the property to be sold. Domenici only asked that the business be able to operate until Feb. 2, but Rivera gave an extended deadline after hearing his and Assistant County Attorney Eric Schuler’s arguments. Domenici said with the declining housing market the demand for the raw material has dropped and Slade needs more time to sell it. “The demand is still there, but it’s just not overwhelming,” Domenici said. He said it wouldn’t make any sense to make Slade quit selling off his product when it would have to be moved to a new location when Slade relocates his business, and sit unsold while the appropriate permits, such as air quality, are obtained. Fish said the county has been generous in allowing Slade to operate without a business license and without a valid special use permit and that no more time should be given. “We feel that they’ve known about the agreement for months now, so they had every opportunity to comply,” Fish said. After giving Slade the extension, Rivera told him that any evidence of mining or crushing or otherwise processing the gravel would be cause for her to immediately shut him down. Slade said he understood the judge’s orders. (Source: Albuquerque Journal (New Mexico), Dec. 5, 2007. By Juan-Carlos Rodriguez.)
The U.S. Department of Labor’s Mine Safety and Health Administration (MSHA) announced that six of the eight mine operations that received written warnings last June for exhibiting a potential pattern of violations have met or exceeded the necessary criteria for reducing violation rates. MSHA continues to monitor the progress of one mine that underwent a change in ownership and mine management, while the other mine that received a warning has been inactive since July. At the same time, MSHA notified 20 additional mine operators that they have met the criteria for a potential pattern of violations. “The operators that received the first letter in June knew they needed to make serious changes to improve their safety records, and change they did,” said Richard E. Stickler, assistant secretary of labor for mine safety and health. “They have successfully and dramatically reduced their significant and substantial (S&S) violation rates — on average, by 50 percent. “But their work is not yet done,” he added. “We strongly encourage these mine operators to continue to improve their compliance records until their mines are violation free, and we will continue to conduct our inspections in a rigorous fashion. Hopefully, they will serve as an example to the other 20 operators to improve their compliance rates.” MSHA closely monitored the seven mines’ compliance records for 90 days. In order to be removed from consideration for this round of pattern of violations notices, operations needed to reduce their S&S violation frequency rate for the 90-day review period by 30 percent or to levels below the national average. They were encouraged to develop a written corrective action plan to reduce S&S violations and to avoid violations caused by imminent dangers, failure to abate previously cited violations, and unwarrantable failures to comply with safety and health standards. An S&S violation is one that could reasonably be expected to lead to a serious injury or illness.
Everything you need to know about operations, equipment, and management can be found in Aggregates Manager. To sign up for a free subscription (for aggregates industry professionals), go to www.Aggman.com/circulation/subform.htmConstruction Education Scholarships Available from ConstructMyFuture.com Program Applications are now available for construction education scholarships funded by the ConstructMyFuture.com Web site, an industry initiative, which promotes construction as a rewarding career choice. The ConstructMyFuture.com annual scholarship program is open to students and construction industry professionals, with the funds to be used for higher-education tuition or the purchase of tools to improve worker productivity. Deadline to apply is Feb. 4, 2008, and application details and entry forms are available online at www.constructmyfuture.com. The workforce development initiative, ConstructMyFuture.com, is the joint effort of the Associated Equipment Distributors Foundation (AEDF), the Association of Equipment Manufacturers (AEM), and the Associated General Contractors of America (AGC). The construction industry faces serious shortages of skilled trades people and technicians, and the website is a major component of the associations’ efforts to attract students and workers and upgrade the overall image of the construction industry. ConstructMyFuture.com provides students, teachers, counselors and parents with a convenient online resource to explore benefits and opportunities for careers in the construction industry. The website focuses on the three major segments of the construction industry: manufacturing, distributing and constructing, and provides career descriptions as well as education and training options. Site visitors can find information on additional industry scholarships, access to industry job boards and a list of trade unions and professional associations that can be used to research apprenticeship and other career-building programs. A special feature is a searchable database of more than 1,600 construction education programs in North America, with links to the school websites. ConstructMyFuture.com also offers a database of companies willing to provide field trips, speaking engagements, and student internships to enrich teacher lesson plans and student learning with real-world experience. And a “Cool Stuff” section displays the world’s most famous construction projects, describes the machines and history of construction and offers a variety of other industry facts and figures. Colorado Quarry Proposal Worries Officials A rock quarry that would produce 1 million tons annually has been proposed near the intersection of Colorado 119 and U.S. 6 in Clear Creek Canyon. The Gilpin County Planning Commission and Clear Creek District Water Providers LLC, which would operate the MMRR Quarry, have discussed plans several times since August, but no decision has been made. Developers, who already have state mining board approval, have submitted a request for a special-use permit to operate the quarry, proposed for a site about a mile from Colorado 119 and U.S. 6 near the Bullwhacker’s gas station. Project manager Alex Schatz said the quarry would produce rock for high-strength concrete. The site is behind a ridge on 100 acres of a 530-acre parcel of land. The remaining land would be a buffer. “This is not a highly populated part of the county,” Schatz said. He said the 4-inch-thick county application includes information about how various issues such as environmental and traffic impacts would be handled. About 200 truck trips a day are envisioned, with most trucks operating during lower-traffic periods. Deceleration and acceleration lanes would be added in the area. Black Hawk officials have concerns about traffic impacts and oppose the quarry, “because from our perspective, how are they going to mitigate all of the trucks that will be added?” said town spokesman Corey Hoffman. The application does not address issues such as the number of trucks, sight distances and intersection spacing, Hoffman said, adding, “The city wants to make sure it’s safe” for visitors, employees and residents. A public hearing on MMRR’s request for a special-use permit is planned for Jan. 12 at the Gilpin County Justice Center. (Source: The Denver Post, Dec. 9, 2007. By Ann Schrader, 303-278-3217 or aschrader@denverpost.com.) Vulcan Materials Assigned ‘A-’ Corporate Credit Rating MUMBAI—Standard & Poor’s Ratings Services said it has assigned its “A-“ corporate credit rating to the recently formed construction materials producer Vulcan Materials Co. Vulcan is the new parent holding company for Legacy Vulcan Corp and is also the parent of the unrated Florida Rock Industries Inc. The ratings agency also assigned its ‘A-’ rating to the $1.23 billion of senior unsecured debt issued by Vulcan on Dec 6. “Vulcan’s credit quality benefits from its strong competitive position in aggregates, favorable long-term outlook for publicly funded construction projects, moderate capital spending requirements, strong pricing fundamentals, and past conservative financial policies,” S&P said. (Source: Thomson Financial via AFX News Limited) Construction Market Forecast: No Downturn in Non-residential Construction in 2008 FMI, management consultants and investment bankers to the construction industry, has issued its Construction Outlook: Fourth Quarter 2007, which has been revised slightly downward since the third quarter, but certain segments, such as non-residential and non-building, will remain strong, the report states. The Construction Outlook, a quarterly construction market forecast developed by FMI’s Research Services Group, notes that FMI is not yet predicting a national recession or a downturn in non-residential construction in 2008, although the outlook is tipped slightly downward. Non-residential construction was booming in 2007 and will increase again in 2008, although at a slower rate, the report notes. Non-residential construction will expand at a 5-percent rate in 2008 and a 4-percent rate in 2009 as the declines in residential begin to lower demand for certain Non-residential segments, the report predicts. “There are several drags on the economy such as housing and credit tightening. However, resilient consumers, businesses and exports have so far been able to prop it up,” said Heather Jones, construction economist for FMI’s Research Services. The report also comments on the housing correction. It is not expected to begin recovering until 2009, the report states. However, FMI believes that put in place construction will realize a smaller decline than housing starts due to rising labor and material costs, upgrades and the use of higher-end materials. Despite large declines in total residential and single-family construction, both will remain at a high level. Historical information in the Construction Outlook is based on building permits and construction put in place data as provided by the U.S. Commerce Department. Forecasts are based on econometric and demographic relationships developed by FMI, on information from specific projects gathered from trade resources and on FMI’s analysis and interpretation of current and expected social and economic conditions. Heather Jones, a construction economist for FMI’s Research Services, is responsible for design, management, and performance of primary and secondary market research projects and related research activities, including economic analysis and modeling, construction market forecasting and database management. Her particular expertise is in the areas of market sizing and modeling, competitive analysis, sales and market performance evaluations, buying practices and trend analysis. (Source: FMI) Industry Generating Transportation Proposals The American Road and Transportation Builders Association (ARTBA) are the latest to put their vision for the next transportation bill forward. In A New Vision & Mission for America’s Federal Surface Transportation Program, ARTBA calls for splitting the highway program in two: the core highway program and the 3C program (Critical Commerce Corridors). After identifying six major challenges facing America’s transportation system and elected officials, ARTBA recommends enhancing the core highway and transit program with increased investment. Notably, a 10-cents-per-gallon gasoline user-fee increase and other revenue-raising options are directed to fund the core program. The 3C program consists mostly of the existing interstate highway system, new multi-modal corridors, new truck-only lanes, new multi-modal freight transfer stations, international gateways, bottleneck relief, and the last mile of road to military bases, ports, airports, rail, and water connections. Potential funding options for the 3C program will be raised through a user fee yet to be determined. The National Stone, Sand & Gravel Association’s (NSSGA) board of directors has endorsed the underlying 3C program. Earlier, NSSGA released its Reauthorization Roadmap: An Aggregates Industry Guide to the Next Federal Surface Transportation Bill. The next surface transportation bill will require each of us to be an advocate for our industry. This new booklet provides a roadmap for involvement in the process. Specifically, it includes a history of the Federal-Aid Highway Program and what’s at stake for the aggregates industry. It also demonstrates how to make your voice heard, including how to communicate with Congress, how to set up a grassroots program in your company and how to access the resources available to you. This booklet will bring home the importance of the Federal-Aid Highway Program to our country, to your industry and to your lives. It is designed to “demystify” the process and to stimulate you into taking action. NSSGA needs each of our members to be part of the grassroots movement and to help articulate a new vision for the surface transportation network in the 21st century. The aggregates industry faces many challenges in this campaign, one of the most serious of which is a public that has lost confidence in the system. If each of us participates, however, success in increasing the investment in the nation’s roads and highways and in implementing a new vision is attainable. Please contact Michelle Breiner at (703) 525-8788 for a copy. In addition to the numerous policy booklets, the American Association of State Highway Transportation Officials (AASHTO) released a YouTube video to help promote its message. (Source: American Road and Transportation Builders Association)
MDU Resources Maintains ‘Outperform’ Rating Analysts at Robert W. Baird maintain their “outperform” rating on MDU Resources Group Inc. The target price is set to $35. In a research note published this morning, the analysts mention that the company has guided to FY08 EPS of $1.65 to $1.90, short of the estimates and the consensus. MDU Resources Group has a track record of providing a conservative estimate and then exceeding that guidance, the analysts add. The company expects the growth in its E&P production business to offset the weakness in the aggregates business and flat earnings in the construction business going forward. (Source: Newratings.com, Dec. 4, 2007. By Robert W. Baird) Vulcan Plans Biggest Bond Offering Ever Birmingham, Ala.-based Vulcan Materials Co., the nation’s largest maker of highway construction materials, planned to sell $1.2 billion of bonds in its biggest offering ever, Bloomberg News reported. The four-part sale was scheduled to take place Thursday [Dec. 6], Bloomberg reported, citing a person with knowledge of the plans. The sale was to include $300 million of three-year notes, $300 million of five-year debt, $350 million of 10-year securities and $250 million of 30-year bonds. Moody’s Investors Service assigned the debt its seventh-highest investment-grade rating of A3, and Standard & Poor’s ranked them an equivalent A minus, Bloomberg reported. Vulcan last month completed its $4.6 billion purchase of Florida Rock Industries Inc., which will enable the company to increase its reserve of crushed stone and sand used to make concrete. (Source: The Birmingham News, Dec. 4, 2007)
Cemex Completes Sale of U.S. Assets Required by U.S. Department of Justice MONTERREY, Mexico—Cemex, S.A.B. de C.V. announced on Nov. 30 that it has completed the sale of its operations in Arizona and Florida, as required by the U.S. Department of Justice in association with the Rinker Group Limited acquisition, to CRH plc, the Ireland-based international building materials group. Cemex acquired Rinker in July 2007. As a condition of U.S. regulatory approval, the U.S. Department of Justice required Cemex to sell 39 ready-mix concrete and aggregate facilities in Arizona and Florida. The value of the transaction is approximately $250 million. Cemex will use the proceeds from the sale of these assets to reduce debt. The Florida operations being divested comprise 26 ready-mix concrete plants and 6 block plants. The ready-mix concrete business operates in five market areas — Tampa, Southwest Florida, Orlando, Jacksonville, and the Florida Panhandle — while the block business operates primarily in the Tampa/St. Petersburg and Fort Myers/Naples areas. In Arizona, the operations comprise two quarries and five ready-mix concrete locations, principally in the Tucson area. Cemex and CRH terminated discussions relating to the potential sale of additional operations due to disagreement about the value of the assets. Cemex announced on Nov. 13, 2007, that it is in negotiations with Ready Mix USA, a private ready-mix concrete company with operations in the Southeastern United States, to expand the scope of their ready-mix joint venture formed in July 2005. Cemex intends to contribute assets valued at approximately $150 million to the joint venture and intends to sell additional assets to the joint venture for approximately $227 million in cash. As part of the transaction, Ready Mix USA intends to make a $150 million cash contribution to the joint venture. Ready Mix USA will manage all the newly acquired assets. Following the transaction, the joint venture will continue to be owned 50.01 percent by Ready Mix USA and 49.99 percent by Cemex. CRH Buys Cemex Assets for $250 Million LONDON—Irish building materials giant CRH has bought assets from Mexican group Cemex located in Florida and Arizona for $250 million. The firm is buying the Cemex ready-mixed concrete and concrete block operations in Florida and the aggregates and ready-mixed concrete operations in Arizona that the U.S. Department of Justice has required Cemex to divest as a result of the acquisition of Rinker. CRH said negotiations regarding additional assets have been terminated. Initial talks with Cemex included further assets located in the US and Europe for up to $4.5 billion in total. The group said in September that it was in talks to acquire Cemex’s concrete pipe business, some of its materials and products operations, the aggregates operations in Kentucky, Cemex’s cement plants in Wampum and Fairborn and its gypsum wallboard distribution business in Florida. In Europe, it looked to buy the San Feliu cement plant in Catalonia in Spain and Cemex’s ready mixed concrete and aggregates assets in Austria and Hungary. (Source: Sharecast, Dec. 3, 2007)
Equipment Management Is Your Maintenance Team Prepared? Protect your big-ticket equipment with a properly trained and educated team of maintenance personnel. Many aggregate producers will experience decreased profit margins because their maintenance team does not fully understand the maintenance requirements and operational parameters of the equipment with which they work. Are you one of these producers? Cost-effective maintenance and operations techniques begin with workers who are knowledgeable about the equipment to which they are assigned. In the real world, however, the level of equipment knowledge demonstrated by many aggregate-producing plant employees is far too often found to be inadequate. Equipment that is maintained and operated by personnel who are not properly trained will eventually suffer from escalating operating costs due to poor disassembly/assembly practices, preventive maintenance neglect, premature component wear, frequent equipment overloads, erratic use of connected horsepower, and similar faults. Some aggregate producers make enough profit each year to offset the cost of continued and unnecessary replacement of equipment parts and lost revenue associated with equipment downtime. At best, such organizations are earning less profit then they might otherwise enjoy. At worst, they are headed for financial trouble because declining profit margins and increased competition will catch up with them. I’ve always said that insanity consists of continually making the same repairs but expecting different results. Yet, far too many aggregate producers get caught up in this trap. Problems related to inadequate personnel training exist at nearly every aggregate production plant, regardless of size. One of the most frustrating statements an equipment manufacturer’s field representative can hear from a customer is, “We’ve been running this crusher for “X” number of years, and we know it better then you do.” Most factory technical representatives are diplomatic enough to ignore such comments. However, statements such as this reflect an attitude that leads to equipment neglect. Maintenance personnel who think they know everything about a certain type of equipment often create or cause unnecessary problems. Bad practices One widespread example of dangerous misinformation is a belief, held by many veteran aggregate employees, that higher lubricating oil pressure is good for some cone crushers. There have been many cases of responsible plant maintenance personnel who have taken the factory-supplied main relief valve off their cone crusher and replaced it with a main relief valve with a higher-pressure rating. The purpose of such a modification is to permit the crusher to operate at a higher lubricating oil pressure level. For reasons that are not completely clear, these employees have decided to “modify” the manufacturer’s lubrication system. Unfortunately, such modifications can and usually will cause serious damage, or possibly even a catastrophic failure of the crusher. A cone crusher is designed to operate with countershaft box oil pressure within a particular range. For example, the Symons Cone Crusher is designed to operate at 5 to 10 psi for the 3-, 4- and 4 1/4-foot model sizes or at 5 to 15 psi for the 5 1/2- and 7-foot model sizes. Operating a cone crusher with excessive oil pressure will cause the eccentric assembly to hydraulic (lift) during operation. This leads to decreased bearing clearance between the taper of the main shaft and the taper of the inner eccentric bushing and a mismatch (disengagement) of the gear teeth in relationship to the pinion teeth. The reduction in bearing clearance will create excessive oil temperature and can result in a burnt inner eccentric bushing, a burnt main shaft, or a broken main shaft. The mismatch of the gear and pinion teeth can lead to broken teeth. The main relief valve limits the amount of oil pressure that can enter the crusher. The main relief valve setting is 10 psi for the 3-, 4- and 4 1/4-foot model sizes or 15 psi for the 5 1/2- and 7-foot model sizes.
A manufacturer’s design engineers establish the correct oil pressure range and main relief valve settings. This is done after careful calculations, prototype testing, and long-term field experience. The operation of the lubrication system, as designed by the manufacturer, is essential to assure proper lubrication and cooling of the cone crusher. When operating personnel make modifications that alter the intended operation, such as installing a main relief valve of a higher pressure rating, they actually defeat the purpose of the lubrication system. The inevitable result is continuous overheating and premature failure of internal components (see Figure 1). This kind of modification is an extreme example, yet it is fairly common. Other well-meaning alterations are performed on rock crushers on a fairly widespread basis. For instance, it is common practice to replace the original motor sheave with one featuring a smaller diameter in order to increase the cone crusher’s operating speed. This speed change will have a major impact on internal crusher components. It will affect the temperature of the internal crusher components, the balance of the crusher, the life cycle of the crusher components, and the foundation, which supports said crusher. Keep in mind that a 20-percent increase in crusher speed will result in a 44-percent increase in unbalanced forces. This is a substantial difference! Speaking of the crushers’ supporting structures, most foundations have natural frequencies above the original operating speed of the existing crusher. If the speed of the crusher is increased, it could operate close to the natural frequency of the foundation and could cause structural problems with the foundation. Additionally, as the crusher speed increases, the need for oil cooling increases due to the higher speed shearing of the oil film. A cone crusher that may have rarely, if ever, experienced an inner eccentric bushing failure may now burn this bushing nearly continuously following an increase in speed (see Figure 2). Good training Aggregate equipment abuse based on misinformation is frequently passed from one employee to another in the guise of on-the-job training. In a few extreme cases, poor maintenance habits and/or incorrect operational procedures become entrenched in an organization to the point that these bad habits and improper procedures are defended, and correct methods are scoffed at or resisted. Depending upon the severity of a training gap in any given organization, the solution can be relatively simple, or extremely difficult, but in no case is it easy. To be effective, education in processing equipment maintenance and operation must be kept current and must be on-going. Aggregate producers who incorporate technical training into their annual activities have the ability to reap huge benefits, most notably increased productivity, improved product shape, increased equipment on-line availability, and decreased maintenance repair costs. All four points are very attractive to aggregate producers. Remember this: If you think that training employees and watching them leave is expensive, try not training them at all and watching them stay! When an aggregate producer purchases a new piece of equipment from a reputable local distributor or directly from the manufacturer, the purchase normally includes assistance during the installation and startup. The manufacturer will provide detailed installation drawings, instruction manuals, and a replacement parts book. But in an aggregate plant, personnel changes are becoming increasingly common. A new maintenance employee or operator may be trained by a predecessor whose knowledge, or attitude, may be suspect. A familiar crusher may be replaced with an unfamiliar or used crusher that is installed by in-house personnel, with no manufacturer assistance at installation or guidance during the startup. Maintenance and operating procedures that are proper for one brand or type of equipment may be completely wrong for another. The simplest solution to such problems is continuous professional training for operating and maintenance teams who work on processing equipment.
Most equipment manufacturers are capable of providing training, and an increasing number of producers are taking advantage of it. Many producers send their middle management, supervisors, and foremen to equipment training seminars. This is a strong indication that upper management is aware of the need for training and is committed to doing something about it. The assumption on the part of some companies is that a supervisor and foreman can attend a training session and come back and convey all of the knowledge to the rest of their crew. Unfortunately, such an ideal transfer of technical theory and detailed procedures seldom takes place. Training seminars cover a lot of information in a short period of time. Few individuals can absorb all the knowledge much less pass it on to others in an effective manner. The principles have to be studied, and the procedures must be practiced repeatedly in the field before the personnel can gain genuine expertise. That’s why most seminars are supplemented with volumes of printed material. Even though it is extremely beneficial to send managers, supervisors, and foremen to training sessions, this should be considered only the first step. Other employees such as lead men, oilers, maintenance planners, quality-control personnel, and plant operators also need to be trained. Among the prime candidates for training are veteran employees who have never had the chance to attend a training seminar, those who have been transferred from unrelated assignments, and new employees with no previous experience. As knowledgeable employees retire or are promoted to different assignments, competent replacements must be provided. As mentioned earlier, most equipment manufacturers are capable of providing quality training sessions for the aggregate producer. Many manufacturers offer several training options including manufacturer training seminars conducted in the manufacturer’s home city, regional training seminars conducted in a city near a high population of related equipment, and private training seminars conducted right at the aggregate producer’s job site. However, there are oftentimes costs associated with these sessions. Tuition fees as well as transportation and lodging for either the trainer or trainee(s) are standard expenses. While these costs are substantial, most equipment manufacturers who provide training try to keep the costs as low as possible and often operate them on a break-even basis. The costs, however, are likely to be a wise investment for aggregate producers. It has been well documented that effective training increases employee confidence, improves employee performance, and lowers employee turnover. It has always been my personal feeling that if you can convince the right employee to attend a well-organized, well-orchestrated technical training seminar, the attendee’s employer will possess the ability to reap huge benefits. Potential benefits include the following:
High-capacity dewatering
Sperian Hearing Protection is offering safety officers and educators a free Howard Leight Wear-Time Evaluator to gauge the amount of noise workers are exposed to in a normal workday. The data should help the employer identify how much noise protection is needed, if any.
For more new products for the industry, check out
the
RollOuts
section
|
Derrick Corp. says its new C56
Hi-Capacity Dewatering Screen can dewater incoming feeds such as
concrete, asphalt, or mason sands to more than 90 percent solids by
weight. The screen delivers an 8.0 G-force to the screen bed and
features Derrick’s patented high open area urethane. The company
says one 5- by 14-foot unit can handle 300 tons per hour and
requires only 10 horsepower to operate.
Identifies
noise protection neededDoosan Infracore has completed the acquisition of the Bobcat, Utility Equipment and Attachments businesses from Ingersoll Rand Co., Ltd. The acquisition was completed on Nov. 30, 2007.
Doosan said that the three entities will operate as individual businesses of Doosan Infracore International, a US-based subsidiary of Doosan Infracore, and will be known as Bobcat, Doosan Infracore Portable Power (formerly Ingersoll Rand Utility Equipment), and DII Attachments (formerly Ingersoll Rand Attachments).
As announced on July 29, 2007, Doosan Infracore has paid $4.9 billion for Bobcat, Utility Equipment and Attachments businesses in the largest overseas acquisition in Korea’s history.
With the completion of this transaction, Doosan Infracore becomes one of the top 10 global manufacturers of construction and utility equipment and related attachments in terms of pro forma sales, which will be approximately $7.5 billion. The company will now have a combined network of more than 3,500 dealers worldwide and 20 manufacturing plants in the U.S., Europe, and China.
The latest people news on who’s who and who has moved where within the industry. |
The Alabama Road Builders Association installed its new officers. They include Greg Abramson, Abramson, LLC, president; Sonny Bunn, S.T. Bunn Construction Co., Inc., vice president; Sherman Suitts, Vulcan Materials Co., treasurer; and Michael McCartney, McCartney Construction Co., Inc., secretary.
Julie Clark has been promoted to vice
president of Barlow Marketing Group (BMG), the Fort Wayne, Ind-based
strategic planning, sales development, research and marketing firm
specializing in the North American and global construction,
mining/quarrying, and demolition/recycling industries. Clark
originally joined BMG in May 2007 as Senior Marketing Director. When
she joined BMG, she brought 18 years’ experience with her, including
a strong background in construction and agricultural electronic
marketing, communications and training, sales and distribution
development, marketing strategy and plans and program management.
Clark’s 18 years of experience includes print and electronic design, multiple Web site developments, electronic marketing and e-commerce, video development, distributor training and marketing, Webinars and Web casts.
Prior to joining BMG, Clark spent three years as Marketing Divisional Manager at 80/20, the Columbia City, IN-based manufacturer of aluminum framing products, where she managed three divisions, including marketing/new product development, CAD operators/engineering, and the value-add construction department.
She also spent 15 years with Tuthill Transfer Systems in Fort Wayne, Ind., where she managed the marketing department.
Jennifer Hitch and Matthew Offenberg have joined Grace Construction Products’ field technical services team. Their new positions reflect Grace’s continued commitment to and promotion of green building practices.
Hitch, who is responsible for the western region, brings more than two decades of industry technical experience and an in-depth knowledge of supplementary cementitious materials to her new position. Prior to joining Grace, she was Western Region Manager of Quality Assurance at Headwaters Resources. Previously, she also served as that company’s manager of engineering services and its national manager of coal Combustion products utilization.
An active member of ASTM since 1991, Hitch was recently named chairperson of ASTM’s Subcommittee C09.24 on Supplementary Cementitious Materials. She also serves as membership secretary of C09. She earned a bachelor of science degree in geological engineering from Washington State University.
Offenberg brings to Grace 10 years of industry experience, including six years with Rinker Materials, where he served as pavement promotions manager and district technical manager. In his new role at Grace, he will be responsible for the company’s Southeastern region and will assist in Grace’s continued promotion of pervious concrete.
Currently the chairman of ACI Committee 522, Pervious Concrete, Offenberg is active in several other industry associations including NRMCA, FCPA, ASTM, and PCA. He holds both a bachelor’s and master’s degree in civil engineering from Purdue University.
Sponsored by:
Compiled by Tina Grady Barbaccia, Aggregates Manager Senior Editor.
To contact Tina about the newsletter content, send e-mail to e-news@aggman.com or call (630) 364-2306.Interested in being a sponsor of our newsletter? Contact your sales representative for more information. Click here for list of contacts.
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