Industry operators’ much warranted basking in the Wall Street limelight continued in the second quarter, which began with the former Cement Roadstone
DON MARSH, EDITOR
Industry operators’ much warranted basking in the Wall Street limelight continued in the second quarter, which began with the former Cement Roadstone Holdings making a strategic stock exchange switch, and solidifying concrete, aggregates and cement as a big board sector.
After 16 years of Nasdaq Stock Market or over-the-counter trading, Dublin-based CRH Plc has joined global heavy building materials peers Cemex S.A., Hanson Plc, Lafarge Group and Rinker Group by listing its shares on the New York Stock Exchange. The move enables the parent company of the U.S. Oldcastle Materials and Products & Distribution groups to reach a broader array of investors, especially on this side of the pond. North American institutional investors now represent 28 percent of CRH’s shareholder base, and the company derives upwards of 50 percent of its $18 billion in annual sales from U.S. and Canadian operations.
Of multinational concrete, cement and aggregate operators, Hanson was the first to establish NYSE trading (1986), followed by Cemex (1999), Lafarge (2001), and Rinker (2003). CRH is listing American depository shares (ADS) on a 1:1 ratio to shares traded on the Irish and London exchanges. Cemex, Hanson, Lafarge and Rinker ADS typically trade at lower ratios (1:4, 1:5 or 1:10) against shares on their home country or primary stock exchanges.
Bound by uniform NYSE accounting and guidance rules, CRH is set for more direct comparison against its four overseas peers; the domestic top guns in aggregates production, Vulcan Materials and Martin Marietta Materials; and the industry’s two other key, NYSE-traded players Florida Rock Industries and MDU Resources. CRH’s shift also leaves Aggregate Industries as the only top 10 U.S. Geological Survey-ranked aggregate producer not traded on the NYSE.
|TOP AGGREGATE PRODUCERS||NYSE TRADING SYMBOL|
|(2004 U.S. Geological Survey)||(Company or parent company)|
|Martin Marietta Materials||MLM|
|Lafarge North America||LAF|
|Knife River Corp.||MDU|
CRH Chief Executive Liam O’Mahony rang the NYSE’s Opening Bell April 4 (photo, page 6), striking the latest exclamation point for a strategy he discussed with Concrete Products in February 1997. Then chief executive of Oldcastle Inc., he had seen CRH cross the $4 billion threshold and project an annual growth rate of 17-20 percent. From 1997 to 2005, the company stayed that course, reaching the $18 billion mark last year. During that stretch, the U.S. and Canadian Oldcastle businesses expanded more than fourfold, toward $9 billion in 2005 sales.
Although the figure includes more than $2 billion in products such as glass, roofing, siding and insulation, the U.S. concrete and aggregate market positions Oldcastle has gained or strengthened since 1997 speak for themselves. Between its Materials and Products groups, Oldcastle is a top-five producer in aggregates, concrete masonry, precast and pipe, and packaged concrete, and top 10 player in ready mixed, concrete roof tile, and clay brick. Not bad for a company that since its 1978 U.S. entry (Amcor Precast, Salt Lake City) has shrewdly invested in businesses some question as tickets to the NYSE.