This week has further highlighted cement industry developments towards consolidation and decarbonisation in Australia as Holcim and Heidelberg Materials' joint venture, Cement Australia, struck an acquisition deal for the Buckeridge Group of Companies (BGC) based in Perth. The BCG operations include the 1.3Mta grinding plant at Perth Naval Base and the 0.35Mta grinding plant at Canning Vale in Western Australia. The group operates in cement, concrete, quarry products, asphalt and transport, strengthening Cement Australia's portfolio.
This latest ownership change comes close on the heels of CRH's 57 per cent share acquisition in AdBri in the summer. The EUR1.3bn Adbri deal shook the market, but CRH had been looking for such an opportunity for some time. “We have held a long-term interest in the Australian construction materials market, which has attractive attributes including stable market dynamics and positive growth prospects, similar in nature to the southern United States and central and eastern Europe where we have a significant presence,” said CRH CEO, Albert Manifold, in December 2023.
While the BGC deal is not as large as the Adbri acquisition, Cement Australia has acted to protect its market share as CRH was also believed to be eyeing up a bid for BGC. Martin Kriegner, Holcim's region head Asia, the Middle East and Africa, and chairman of Cement Australia, said: “The acquisition of this division of family-owned BGC will reinforce Holcim’s footprint in the attractive market of Australia. With its state-of-the-art facilities, the acquisition will advance Holcim’s leadership in sustainable and innovative building solutions.”
Meanwhile, the Seven Group Holdings Ltd (SGHL), run by billionaire Kerry Stokes, also looked to buy BGC after it had acquired Boral but missed out on the opportunity. Boral itself was only snapped up in the summer when SGHL triggered a compulsory acquisition. Boral owns the Berrima works, where it has continued to make environmental improvements this year. Located in the southern highlands region of New South Wales (NSW), the Berrima Cement Works is responsible for supplying 40 per cent of cement in NSW and the Australian Capital Territory (ACT). The modernisation includes the installation of a chlorine bypass system that will enable alternative fuel usage at the site to reach 60 per cent over the next three years. To date Boral has already achieved 30 per cent coal substitution.
A modernised and decarbonised industry
The Australian cement sector has been transforming with projects such as Adbri’s expansion of its Cockburn Cement plant at Kwinana with two new ball mills and the imminent closure of the Munster facility. The Australian government granted the company US$32.5m for a front-end engineering and design (FEED) study for the Birkenhead cement plant in April 2024. The study will assess the possibility of adding a new vertical roller mill and post-production blending system at the plant. Adbri also launched its lower-carbon general purpose limestone Type GL in May 2024, called Evo Cem.
Alternative fuels usage is continually being increased with Geocycle and Cement Australia processing 60,000t of solid, liquid and gaseous industrial wastes in 2023.
Smaller players
While the large producers have been manoeuvring to get the upper hand in the market, there are several smaller companies that are still playing an important role in supplying the market. The Wagner Investments Pty Ltd and Barro Group Pty Ltd remain independent players that operate outside the big three top producers. These two producers account for 1.9Mta of cement production capacity in the country.
Moreover, the market is about to be expanded further with a new domestic producer when the Hallet Group opens its Port of Augusta processing plant which is a 0.5Mta integrated greenfield plant. The Hallett Group currently imports more than 0.2Mta of cement and is building an AUD45m (US$28.8m) cement distribution hub at Port Adelaide.
