Investors, market conditions validate TXI expansion, integration strategy

Sources: Texas Industries Inc., Dallas; CP staff

Stock price gains and plant capacity ramp up suggest that a bellwether operator will reap returns from escalating ready mixed, cement and aggregate demand in one of the industry’s strongest markets.

In less than a year, Texas Industries has seen the price of its New York Stock Exchange-traded shares climb from $30 to $70-plus. During that window, the producer has capped a home-state portfolio realignment involving asset exchanges with Cemex USA and Dallas neighbor Trinity Industries. Through three transactions, from mid-2011 to late-2012, TXI solidified its stake in central and east Texas concrete markets; annual ready mixed output rose from about 1.75 million to 3 million-plus yards in advance of a new, second kiln at the Hunter cement plant near New Braunfels, Texas.

After a six-month commissioning process, TXI has affirmed Hunter Kiln 2’s operational status, equating to 1.4 million tons of advanced milling capacity. Crediting dedicated colleagues’ hard work, TXI Chief Operating Officer Jamie Rogers noted, “The challenges faced when starting up a new kiln line are many, and the teamwork and communication of our people made all the difference.”

With the new capacity on line, TXI is accelerating a Hunter Kiln 1 upgrade toward an early 2014 restart. “We initially projected a more extended period of downtime for the original line after Kiln 2 was brought into full operational status,” Rogers affirms. “However, market conditions in central and south Texas continue to point to sustained recovery and strength, and we simply need the additional capacity earlier than originally thought.” The new and upgraded kilns will position the Hunter operation to mill upwards of 2.3 million tons of powder per year, he adds, more than double the original capacity.