UK: Hope plans bagged cement launch

Despite being on the verge of being taken over, Hope Construction Materials continues to invest in expanding and strengthening a brand with an uncertain future.

Hope Construction Materials is in the process of being acquired by Breedon Aggregates, subject to approval of competition authorities. The deal is expected to complete sometime during 2016. Until then, however, Hope Construction Materials is continuing to operate as if nothing is going to change.

Next up, Hope is planning the launch of a bagged cement product.

The cement will be produced at the Hope Works in Derbyshire, which has been making cement for more than 80 years, and then transported by rail for bagging and distribution from Hope’s new Dagenham plant (below) which is set to open in the second quarter of 2016. It will be available to customers across the southern half of England.

The distinctive packaging features a large ram – a nod to the firm’s Derbyshire roots.

Hope cement had previously been available in bags through a third party supplier, but this launch marks the first time Hope cement will be in the firm’s own packaging.

Hope has spent 18 months developing this product launch, so was not likely to postpone it to see what Breedon’s plans might be for the Hope brand.

Gary Brennand, Hope’s commercial director for cement, said: “For 18 months we have spoken at length to builders and merchants to understand their needs and how we can add value to them. Using this insight we have developed a full package which we believe will redefine the sector and are really excited about sharing it all. Revealing our Hope Professional Grade Cement branding is just the start.”

UK: Breedon to buy Hope Construction for £336m

Aggregates industry veteran Peter Tom is set to lead a major shake up in the industry to create an independent cement, concrete and aggregates producer.

Breedon chairman Tom has struck a deal to pay £336m for Hope Construction Materials, creating a business to rival the major multinational suppliers.

Tom said: “We’re creating a vertically-integrated business with one of the country’s largest cement plants, nearly 60 quarries, more than 200 ready-mixed concrete plants and around 750 million tonnes of mineral reserves and resources – together with access for the first time to the rail-fed sector of the market.

“Together we will be an even stronger business, complementing one another geographically, operationally and culturally.”

Under the deal Amit Bhatia, Hope’s Chairman, will join the Breedon broad and hold a large stake in the business.

Breedon expects to realise £10m in operational improvements after three years.

The firm will pay £202m in cash, supported with a £41m rights issue, and give Hope’s holding company Abicad an 18.4% stake in the enlarged business.

Tom said: “This acquisition is well-timed, with UK construction output forecast to expand by around 15% over the next four years and volumes of all our major products expected to grow strongly.

“We are confident that we will be able to continue delivering significant value for our shareholders in the coming years, with an even stronger platform for growth. We very much look forward to welcoming everyone at Hope to the Breedon family.”

Over the last three years Hope has grown to be a formidable competitor in the UK market. It boasts a national footprint of over 160 operational sites, including the Hope cement works in Derbyshire, five quarries and 152 concrete plants.

In the last 12 months, Hope turned over £286m selling 1.6m tonnes of cement, 4.7m tonnes of aggregates and 2.3m cubic metres of concrete. This generated a pretax and interest profit of £37m.

The deal is conditional upon the approval of the competition and markets authority and is expected to complete before next summer.