Essroc, the North American subsidiary of Italcementi group company Ciments Français, has signed an agreement with Holcim to purchase the slag cement grinding facility in Camden, New Jersey, USA. As part of the transaction, Essroc will also obtain Holcim cement terminal in Everett (Massachusetts). The acquisition will be finalised pending completion of the Holcim and Lafarge merger later this year.
Holcim’s staff in Camden and Everett will join Essroc, Italcementi said in a statement. The Camden facility can produce upwards of 0.5Mta of slag cement.
Essroc currently produces slag cement at its Picton (Ontario), and San Juan (Puerto Rico) cement plants and at its slag grinding facility in Middlebranch (Ohio). With the addition of Camden, Essroc has a combined capacity to produce over 0.75Mta of slag.
This transaction will allow Essroc to catch the opportunity to widen the offer in the northeast and mid-Atlantic markets.
Essroc operates through six cement plants with a total capacity of 7Mta of cement. In 2014 revenues amounted to EUR455m.
Change in direction
CM-CIC Securities note that while this is not a major disposal for Holcim, for Ciments Francais and parent company Italcementi the resumption of external growth is of symbolic importance. The research house notes that these acquisitions in the US by Italcementi mark a real change in direction for the group, which had been looking to sell Essroc – an idea which has clearly been abandoned.
"The acquisition of Holcim’s positions should reduce the weakness of Essroc, which had apparently been facing commercial challenges in the catchment areas of the cement plants in Nazareth (Pennsylvania), Martinsburg (West Virginia) and Speed (Indiana)," CM-CIC Securities highlighted in a research note following yesterday's announcement.
