With a year of significant mergers and a slowdown in the construction industry, myriad changes have been made to producers. Find out who are the top producers and how this affects your operation.

by Jason Christopher Willett

Amidst continuing uncertainties in the U.S. markets, many of the leading construction aggregates companies actively pursued mergers and acquisitions during the second half of 2007. As the summer ended, many of the larger companies grew in size through acquisitions. In July, Cemex, Inc., the seventh-ranked aggregates company in the U.S. market based on 2006 production, completed its multi-billion dollar takeover of the Rinker Group, which had been ranked fifth.

Lehigh Cement’s parent company, HeidelbergCement AG, recently purchased Hanson PLC, based in the United Kingdom, which included Hanson’s fourth-ranked U.S. building materials group.

Oldcastle Materials, Inc., was in negotiations to buy operations in Florida and Arizona that the U.S. Department of Justice (U.S. DOJ) had required Cemex to sell. This could potentially break the tie in the rankings for second place between Oldcastle and Martin Marietta Materials. Two big mergers were completed in August when HeidelbergCement AG, ranked 23rd, purchased the parent company of the fourth-ranked Hanson Building Materials America, Inc. Also in August, the top U.S. aggregate company, Vulcan Materials Co., purchased 10th-ranked Florida Rock. It had been reported that 34th-ranked Carmeuse North America was in the process of purchasing 17th-ranked Oglebay Norton. Even with declines in the residential construction markets and very slight increases in aggregates production, stocks in aggregates mining companies were still in the spotlight during this period because of the large mergers, increasing unit prices, and large profits reports.

The U.S. Geological Survey (USGS) defines the aggregates industry as those companies that mine and process crushed stone and construction sand and gravel. The aggregates industry is present in all 50 states, with more than 5,300 mining companies and 9,500 operations. U.S. production of construction aggregates in 2006 was 3.04 billion metric tons (3.35 billion short tons) valued at $22.4 billion, free on board (f.o.b.) at plant. Aggregates production has increased 14 percent compared with production levels reported in 2000. Aggregates production increased every year during the past six years, except in 2002, owing to a 5-percent decrease in the production of crushed stone. The value of the aggregates produced has also increased greatly during the same period. The average unit price (price of a short ton of material f.o.b. plant) has increased every year since 2000.

In 2006, the 10 leading aggregates-producing states were, in descending order of tonnage, Texas, California, Florida, Pennsylvania, Ohio, Illinois, Arizona, Georgia, Missouri, and North Carolina. These states accounted for 45 percent of the total output of aggregates, or 1.36 billion metric tons (1.50 billion short tons), which was greater than the amount of construction sand and gravel produced in all 50 states.

The 25 leading companies, in order of total output of aggregates in 2006, follow. These companies accounted for 46 percent of the total output of aggregates in the United States and have operations in all 50 states. The 100 largest aggregates operations, based on 2006 production, produced 14 percent of the total output of aggregates, which was valued at $3.4 billion. The 74 crushed stone operations and 26 construction sand and gravel operations were located in 31 states.

Top 25 Companies

1. Vulcan Materials Co.
1200 Urban Center Drive
Birmingham, AL 35242-5014
Phone: 205-298-3000
Web site: www.vulcanmaterials.com

2. (tied) Martin Marietta Aggregates
2710 Wycliff Road
Raleigh, NC 27607-3033
Phone: 919-781-4550
Web site: www.martinmarietta.com

2. (tied) Oldcastle Materials, Inc.
1055 Thomas Jefferson St., N.W., Suite 400
Washington, D.C. 20007
Phone: 202-625-2122
Web site: www.oldcastlematerials.com

4. Hanson Building Materials America, Inc.
8505 Freeport Parkway
Irving, TX 75063
Phone: 972-621-0345
Web site: www.hanson.biz

5. Rinker Materials Corp.
1501 Belvedere Road
West Palm Beach, FL 33406
Phone: 800-226-5521
Web site: www.csra.com

6. Lafarge North America Inc.
12950 Worldgate Drive, Suite 500
Herndon, VA 20170
Phone: 703-480-3600
Web site: www.lafarge-na.com

7. Cemex, Inc.
840 Gessner, Suite 1400
Houston, TX 77024
Phone: 713-650-6200
Web site: www.cemexusa.com