With asset trading and consolidation sweeping through its principal Australian and U.S. markets, Sydney-based Boral Ltd. has realized the limitations of being number one or two in a handful of businesses. The company launched a new U.S. division last month by acquiring Denver-area independents Ready Mixed Concrete Co. and Owens Brothers Concrete. The deals make Boral Construction Materials the market's number three producer, behind Lafarge North America and Aggregate Industries, and represent annual production of 600,000 yd. of ready mixed; 7 million architectural and retaining wall concrete block; and 1.6 million tons of sand and gravel.

“Establishing a U.S. concrete and quarries business furthers our strategy of being a focused building and construction materials company operating in Australia and increasingly offshore,” says Boral Managing Director Rod Pearse. The deals, he adds, are important in broadening the U.S. materials presence beyond San Antonio-based Boral Materials Technologies Inc., number two in fly ash processing and marketing. Boral Ltd.'s other domestic holdings are each tops in their space: Boral Bricks (clay products and faux stone precast veneer), based along with Boral USA in Atlanta; and MonierLifetile LLC (concrete and clay roof tile), an Irvine, Calif., joint venture with Paris-based Lafarge Group.

Boral Ltd. has been down the U.S. materials road before, acquiring in the 1980s scattered aggregate and asphalt businesses in Arizona and southern California. Those were shed by the late 1990s as the company concentrated its energies in the U.S. on clay, specialty concrete, fly ash and admixtures. BMTI emerged from Boral's Western Ash business in Phoenix and Monex Resources in San Antonio.

With David Plummer (note page 6) at the helm, Boral Construction Materials will have a geographic focus for ready mixed and aggregate acquisition targets, but not one confined to current Boral USA markets. BCM coincides with much internal and external activity affecting the Atlanta and Sydney offices. In July 2003, BMTI sold its regional admixture and fiber businesses to Euclid Chemical. Rival fly ash marketer, Salt Lake City-based Headwaters Resources (formerly ISG), has recently expanded its concrete masonry business in Texas, following the acquisition of Eldorado Stone, a leader in faux stone precast. Boral Bricks has stepped up production of similar veneer products to complement its masonry offerings. More important, the company has seen the remaining top five U.S. clay brick producers change hands since 2000, leaving it surrounded by well capitalized Hanson Brick (Jannock and Athens); Oldcastle Architectural (Glen Gery); Berkshire Hathaway (Acme Brick); and Wienerberger AG (General Shale Products). The latter company, based in Austria, is the world's largest clay brick producer, and has a portfolio that includes continental plants formerly under Hanson Brick Europe and Boral Bricks Europe.

In Australia, where Boral cites number one positions in ready mixed, aggregate and asphalt, and number two in cement, the company has seen its rival and fellow Australian Stock Exchange-traded company, Rinker Group Ltd., enjoy strong shareholder support for development of its U.S. arm, Rinker Materials Corp. Since their New York Stock Exchange listing in October 2003, Rinker Group's shares, traded as American depository receipts, have risen more than 30 percent.

Boral Ltd., whose other Australian competition includes the former Pioneer Ltd. business of London-based Hanson Plc, has reported strong financial results in the past year, with double-digit profit gains and stock climbing at least 25 percent. Concurrent with the Construction Materials development here, the parent company had pursued a takeover of Adelaide Brighton Ltd., a Melbourne, Australia, holding company whose powder assets would have boosted Boral to the continent's top post in cement. The initial takeover bid occurred a year after Rinker Group, Hanson and Swiss giant Holcim Ltd. pooled their positions in Queensland Cement Ltd. and Australian Cement Holdings to create market leader Cement Australia. Whether it is dealing on the homefront or this side of the Pacific, Boral surely knows that to be a player in construction materials means keeping up with the Rinkers and the Hansons, et al.

e-mail: dmarsh@primediabusiness.com