As part of its long term vertical integration strategy of buying downstream construction materials businesses, Adelaide Brighton has acquired Direct Mix Concrete (DMC) ? including its Southern Quarries brand ? as well as the concrete, quarry, sand, transport and cement operations of BM Webb Construction Materials.
According to a statement released by Adelaide Brighton, DMC is ?the largest independent aggregates and premixed concrete supplier to the Adelaide building, construction and infrastructure market?.
Under its Direct Mix brand, the business produces in excess of 200,000m3 of premixed concrete from 13 concrete plants across South Australia, with Adelaide Brighton as its cement supplier.
DMC?s Southern Quarries brand produces in excess of one million tonnes per annum of hard rock and sand though two quarries ? one at Sellicks Hill and one in Price ? and supplies all the internal aggregates and sand requirements for the Direct Mix business. The Sellicks quarry is estimated to have in excess of 65 million tonnes of approved resources while the Price sand operation is said to contain over 30 years of reserves.
?The DMC business provides a large scale entry into the market as it is the number two player in SA concrete, hard rock and sand,? Adelaide Brighton CEO Martin Brydon said. ?DMC also offers a well located hard rock quarry resource with more than 50 years of reserves, protects the sales of cement supplied by Adelaide Brighton and provides overhead synergy benefits.?
DMC?s quarries are set to become even more valuable over time as, according to Adelaide Brighton?s release, ?a number of major competing aggregate sources are expected to reach the end of their economic life over the next five to 10 years, underpinning the strategic attraction and long term value of the quarry assets?.
Expansion into northern Queensland
From BM Webb, Adelaide Brighton has acquired a concrete plant, a limestone quarry, cement operation, sand reserve and transport operations ? all of which are located in or around Townsville, Queensland.
?[BM Webb] currently produces approximately 60,000m3 of concrete per annum and has hard rock reserves in excess of 50 years as well as significant sand reserves,? the company release stated.
Commenting on the acquisition, Brydon said, ?The Webb acquisition offers the opportunity to expand into the promising north Queensland market now we have the ability to distribute cement into this market.?
As previously reported by Quarry, Adelaide Brighton also recently acquired Penrice Soda Holdings? limestone quarry in Angaston, SA.
Brydon said that the recent acquisitions ? which amounted to a total purchase price of $174 million ? had ?significantly strengthened? Adelaide Brighton?s position in the SA market and had given it ?an important staging post? for cement distribution in north Queensland.
The BM Webb and Penrice acquisitions were completed in May and June 2014, respectively; the DMC transaction is ongoing and expected to conclude this month.
Adelaide Brighton is an integrated group of companies that supplies construction materials and lime to Australia?s construction, engineering, infrastructure and resource sectors.
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Source: Adelaide Brighton