A $420 million asset deal with Martin Marietta, anchored by the former TXI Oro Grande plant, will enable Glendora, Calif.-based CalPortland Co. to replace capacity from its idled Colton mill—about 35 miles south—and strengthen a home state, integrated cement and concrete platform. Coupled with Stockton and San Diego terminals, the plant will contribute to what CalPortland parent Taiheiyo Cement reports is “a steady improvement in sales volume and profit in [the] Group’s U.S. operations.”
TXI, with whom Martin Marietta merged in July 2014, completed a $400 million-plus Oro Grande upgrade in 2009, bringing capacity to 2 million tons per year. The operation will support optimized cement production and logistics across CalPortland’s Mojave and Rillito plants in California and Arizona. The Mojave plant is about 75 miles to the northwest of Oro Grande.
“While we believe the California cement plant is one of the most up-to-date plants in the region, it is not in close proximity to other core assets and, unlike other marketplace competitors, is not vertically integrated with ready mixed concrete production. After careful evaluation, we determined a divestiture is the best avenue to maximize shareholder value,” noted Martin Marietta CEO Ward Nye in a second quarter earnings review referencing the CalPortland agreement.
The deal is scheduled for a third quarter closing, he added, with proceeds supporting a previously announced share repurchase program. The CalPortland transaction will leave Martin Marietta with the TXI Crestmore clinker grinding plant in Riverside, Calif.