Vulcan Materials secure reserves and capital
Strategic developments in California and Georgia for largest construction aggregates producer in the US
VULCAN Materials Co., the largest producers of construction aggregates in the US, have this month commenced development at the company’s Azusa Rock Quarry, east of Los Angeles, in California.
This strategically located source of reserves in the San Gabriel Valley contains more than 100 million tons of quality granite aggregate, allowing Vulcan to supply critical Californian infrastructure projects and commercial developments for many decades to come.
The project also will support Vulcan’s redevelopment of former sites. In particular, the Azusa project will generate millions of cubic yards of overburden material that will be used to complete the reclamation of a 90-acre former sand and gravel site in nearby Irwindale. The reclamation is expected to be completed by 2018.
Donald M. James, chairman and chief executive officer of Vulcan Materials, said: ‘This project is consistent with our long-term strategy of securing aggregates reserves in the fastest-growing regions of the US, while also building upon our significant and valuable landholdings in ways that benefit our shareholders, our employees, and our valuable host communities.
‘It is the culmination of years of co-operative work with the City of Azusa, regulatory officials and local stakeholders, to ensure that it meets the expectations of the community, state and local government officials, and Vulcan Materials Co.’
Meanwhile, in a separate development, Vulcan have recently entered into a transaction with Plum Creek Timber Co. Inc. for the sale of an interest in the future production at four quarries in Atlanta, Georgia.
With this transaction Vulcan will receive US$154 million in exchange for a percentage royalty interest in 255 million tons of aggregate production over approximately 25 years.
Vulcan say the transaction will allow the company to unlock long-term value in these quarries, tax efficiently, while maintaining full ownership and operational control of the sites, fixed assets and land. A pre-tax gain of US$154 million, less modest transaction expenses, will be recognized over the life of the transaction.
Commenting on this deal, Donald M. James said: ‘In Plum Creek, we have a partner that shares our long-term view of the value and growth in the aggregates business, and is investing based on that view.
‘This transaction provides us with capital to deploy in strategic investments in our aggregates business and to strengthen our balance sheet.’
