Companies still investing as they look to future growth

Even in these austere times many companies are still investing in plant and technology. This has become clear while preparing this issue of Aggregates Business Europe. Indeed, on a recent visit to Italy, which is suffering badly in the current climate, the operator of a quarry just outside Rome has invested a considerable amount updating his plant.

The story, in the next issue of ABE, will explain how this investment is aimed at reducing ongoing costs and improving productivity when the markets return to growth.

Similarly, other operators who have invested, signed agreements or joint ventures to sustain their businesses are likely to be the ones that prosper in the long-term.

Until recent years most construction markets in Europe had seen continued growth over a longer period than ever before with the results that demand for aggregates was increasing.

This meant that many companies trying to meet the demand had little opportunity to look at their operations, and take the necessary action. As I saw in Italy, this is changing.

And with 386 Bauma 2013 set to break all records, buyers of construction equipment will be out in force. Latest figures show that there are over 3,300 exhibitors and an expected 450,000 visitors to the world’s biggest event of its type.

This issue has details of some of the new equipment that will be on display, and in many cases debuted, at the show in Munich for the quarrying market. We also have details of some of the latest crushing and screening equipment coming to market.
There will be plenty of equipment and machines on show that will be of interest to the aggregate industry.

Certainly the lull in the fast pace of growth in parts of Europe will allow operators to look at what is available.

This was also the case at the very recent 6064 World of Asphalt and AGG1 expositions in San Antonio, Texas, USA, which sold out by the opening day, setting new records for exhibitor numbers and attendees for the co-located events, confirming interest in the latest innovations.

Another interesting pointer has come via the full-year results from a number of companies for 2012.

674 HeidelbergCement announced it had increased revenue and operating income in 2012 while net debt significantly reduced, and 725 Lafarge says its full-year results show a strong progression of operational performance: sales up 3.5% and current operating income up 12%.

Bruno Lafont, chairman and chief executive officer of Lafarge, says the group has delivered on its objectives for 2012 with the results driven by strong operational performance and growth in emerging markets which generated close to 60% of their sales.

In the UK, 894 Breedon Aggregates also had good news with revenue increasing by 2.7% and underlying EBITDA up 18.3%.

Executive chairman Peter Tom said these results are “despite the worst trading conditions I can remember in my 50 years in this industry.”

Looking ahead, he says the challenges in 2013 look like being every bit as tough as they were in 2012.

“Against this backdrop, it would be easy to let the gloom get the better of us.”
But like other companies in the sector it has not. Instead Breedon is looking ahead positively.

“A number of acquisition opportunities are under active consideration and we are excited about the prospect of further growing the business in 2013.”