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Adbri expands footprint with Melbourne sand quarries

 

Adbri has formed an equal joint venture with Barro Group to acquire the sand operations of Metro Quarry Group in the southeast of Melbourne.

Adbri will spend $30 million on the new joint venture, accounting for its half of the purchase to be complete during November 2021.

Barro is a substantial shareholder in Adbri, and the two companies already hold a joint venture in Adbri’s exclusive distributor of cement, Independent Cement and Lime.

The two quarries owned by Metro include the Lang Lang and Nyora operations which supply natural sand to regional and metropolitan Melbourne.

Adbri chief executive officer Nick Miller said this was an ideal agreement for the company as it looked to expand as reliably as possible.

“This acquisition is consistent with our strategy to extend our vertically integrated footprint and provides a compelling opportunity for Adbri to lock in a long-term secure supply of natural sand for our downstream businesses servicing the competitive Melbourne market,” Miller said.

The competition in Victoria has ramped up in recent years as Victorian Earth Resources indicated the state had extracted a 10-year tonnage record in 2019-20.

The annual Earth Resources Sector Indicators Report found Victoria’s quarry production had increased by 25 per cent in the past six years, hitting 63 million tonnes of sand, rock and gravel for the 2020 financial year.

To take advantage of the acquisition and the strong market conditions, Miller said he saw Barro as an integral part of the future of the operations.

“The value of this purchase will be optimised through a joint ownership structure, where the operational expertise of Adbri and the Barro group will unlock cost efficiencies and maximise product offtake,” Miller said.

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