Investment No Drain On Hanson Pipe

Hanson Plc was on a roll this time last year, investing more than $800 million on deals that added paver and landscape unit and slag cement production


Hanson Plc was on a roll this time last year, investing more than $800 million on deals that added paver and landscape unit and slag cement production (Florida’s Paver Module and Civil and Marine Inc.) to its North American portfolio and secured one of the crown jewels in U.S. aggregates (Chicago-based Material Service Corp.). It has not matched first-quarter 2006 dollar outlays this year, but through one of its principal franchises, Hanson Pipe & Precast Inc., continues what is surely one of the boldest, fast-track expansion drives ever in manufactured concrete. Big-ticket plant investments and small to medium-sized acquisitions are unfolding for Hanson Pipe & Precast as drainage and underground product rival Rinker Materials Corp. sees development activity hamstrung amid Cemex’s proposed Rinker Group takeover.

Hanson Pipe put an exclamation point on its expansion and capital investment strategy last month, closing on Ontario, Calif.-based Johnson Bateman Co., then opening what management notes is the United States’ highest-capacity concrete pipe plant. Johnson Bateman is a premier company with a great reputation [that] gives [us] entry into the southern California market, says Hanson Western Region President Sue Tanenbaum. Southern California’s growth for the past five years has been approximately 35 percent higher than the U.S. as a whole, and this acquisition is a fantastic opportunity to service that growth.

The deal produces synergies with existing Sacramento and Bakersfield, Calif., plants, she adds, and offers a geographically complementary operation to benefit customers throughout the state. With a payroll of 60, the Ontario facility becomes the 11th property in Hanson Pipe’s Portland, Ore.-based Western region, covering California, Oregon, Arizona, Utah and Washington.

Hanson Pipe announced the Johnson Bateman deal as staff at its Jersey Village complex in Houston were preparing for a March 22 dedication of a new mega-plant with 500-ton/shift output capability (note page 8). Topping that property will be a $45 million complex under construction in Winter Haven, Fla., anchoring Hanson Pipe/Southeast Region. That greenfield project is scheduled for late-2007 completion Û just as a $17 million automated production line, housed in a 62,000-sq.-ft. addition, takes hold at the company’s Chesapeake, Va., plant.

In February, Hanson Pipe significantly stepped up its lead in the specialized area of concrete pressure pipe with the acquisition of one U.K. and four U.S. plants from Dayton, Ohio-based Price Brothers Co. The domestic operations Û in Bakewell, Tenn.; Hattiesburg, Miss.; Palatka, Fla.; and South Beloit, Ill. Û join existing Hanson concrete pressure pipe plants in Grand Prairie, Lubbock and Victoria, Texas. Hanson operated those former Gifford-Hill-American properties as a 50/50 partner with Los Angeles-based Ameron Intl. In 1998, it consolidated its stake, while Ameron kept its separate concrete pressure pipe operations (one Phoenix, two California).

This acquisition is instrumental in building our concrete pressure pipe presence and puts Hanson closer to our strategic vision for North America, says Clifford Hahne, president of Hanson’s Grand Prairie-based South Central Region, in which the Price properties and their 500-plus employees now reside.

Back in the Southeast Region, Hanson Pipe recently acquired the former Sherman Prestressed Division assets in Pelham, Ala. Centered on 40 acres near Birmingham, that business creates a prestressed plant companion for the Southeast Region similar to what Minnesota and California sites offer Hanson’s Midwest and Western Regions. Incidentally, the California franchise, Hanson Structural, has its own ambitious project under way at an 80-acre site north of Los Angeles County, where production from two older metro plants will be brought under one new roof.

Three acquisitions, two greenfield plants and two colossal plant upgrades have kept Hanson Pipe in the industry spotlight. Need we mention from which company 2007 American Concrete Pipe Association Chairman Tom Wheelan (page 36) hails?

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