Boral Limited has announced that it will invest US$55 million to build a new clay brick plant in Terre Haute, Indiana.
Boral Bricks is the largest manufacturer and distributor of clay brick in the United States. This investment will increase Boral's overall clay brick manufacturing capacity in the USA by around 7% and demonstrates Boral's commitment to better serving the important Midwest markets.
The new facility will produce a variety of brick sizes and colours, with a capacity to produce 120 million standard brick equivalents (SBE) annually. With the continued strong growth in the Southeast, Boral has been unable to satisfactorily supply its customers in the Midwest region. The new Terre Haute plant will be well placed to service customers throughout Indiana, Illinois, Ohio, Michigan, Minnesota, Wisconsin, Missouri, Iowa, and Kentucky; in part replacing brick currently shipped to these states from Boral's Southeast facilities.
Boral anticipates production to commence at Terre Haute in the December 2007 quarter and the brick will be distributed through Boral's existing northern independent distributors and through Boral's direct distribution business towards the South. Returns from the investment are expected to exceed the cost of capital in the first year of production.
"We are pleased to announce the establishment of clay brick manufacturing in the Midwest," said Emery Severin, President of Boral USA. "This region is characterised by high brick intensity and steady growth prospects. Increasing our brick manufacturing capacity with a low cost, state-of-the-art plant in the Midwest will better serve our customers in those markets and will eliminate the cost of shipping bricks from our other plants. This plant will also free up capacity in the Southeast to service unfulfilled demand."
Commenting on the US clay brick expansion program, Boral's CEO and Managing Director, Rod Pearse, said, "Boral is the market leader in clay bricks in the USA and we are committed to maintaining our strong performance in this key business and growing the business for value. The USA market has been remarkably robust for many years now and we believe that the long term underlying demand levels in residential housing in the USA will remain relatively high.
"This investment builds on other growth initiatives in our USA brick and roof tile businesses and is consistent with Boral's strategy to grow increasingly offshore" concluded Mr Pearse.
15th December 2005