Callanan Industries, Inc. History

Company Perspectives:

Callanan Industries Inc. Your one source for state approved crushed aggregates, hot mix asphalt, readymix concrete, and construction technology. Serving New York's infrastructure since 1883.

Key Dates:

1883:

Peter Callanan and partners establish a limestone quarry on Callanan's property.

1895:

Callanan Road Improvement Company is incorporated.

1896:

Peter Callanan dies.

1898:

New York Highway Act leads to growth at Callanan.

1909:

Explosion at the plant kills 23 men, including the founder's sons.

1929:

Callanan purchases its chief competitor, Albany Crushed Stone.

1937:

A quarry in Kingston, New York, is opened.

1967:

Penn Dixie Cement acquires the company.

1985:

CRH plc, through subsidiary Oldcastle Inc., acquires Callanan.

1993:

Clemente Latham Concrete is acquired. ship. Although Callanan operated under management-led ownership for less than two years, the company enjoyed significant growth by acquiring construction material companies. Callanan bought Troy-based Fitzgerald Brothers; Crushed Rock and Asphalt Stone Products, with operations in Schenectady and Pattersonville, New York; and Oxbow Stone and Asphalt, based near Canastota, New York.

Callanan changed hands again in 1985, when CRH plc (Cement Roadstone Holdings) of Dublin, Ireland, through its U.S. subsidiary Oldcastle Inc., bought the company. CRH was established in 1970, the product of a merger of two public Irish cement companies: Cement Limited, founded in 1936, and Roadstone Limited, founded in 1949. The resulting company produced all of Ireland's cement and was a major supplier of aggregates, concrete products, and asphalt. Not content with dominating Ireland's relatively small market, CRH set its sights on international expansion. In 1973 the company made its first acquisition on the European continent. The initial foray into the United States came in 1978 when CRH bought Utah-based Amcor, maker of concrete products. However, it was the acquisition of Callanan that formed the nucleus for Oldcastle Materials, formed in 1985, which would grow into a major revenue stream for its Irish parent company.

CRH invested the necessary resources to grow Oldcastle's "New York Group." In 1986 King Road Materials and two blacktop plants were acquired. In 1993 Oldcastle added Clemente Latham Concrete and Valente Gravel, which ran five ready mix plants as well as sand and gravel operations. A year later the group picked up two quarries and four blacktop plants through the acquisitions of Sullivan Materials. In 1995 Fane Asphalt and Fane Concrete was acquired, adding two more ready mix plants and another quarry. Acquisitions in 1998 included Ritangela Construction and Maybrook Materials, which brought with them a highway construction and paving company, plus a blacktop plant and quarry located in Orange County. Then, in 2000, the Rochester-based Dolomite Group of companies were bought, adding nine aggregate facilities, eight blacktop operations, and six readymix plants. The future need for Callanan's products remained strong, and the company's ability to provide the necessary materials would not be an issue for many years. Callanan's South Bethlehem Quarry, already mined on a continuous basis for more than 100 years, contained estimated reserves of another 100 years.

Company History:

A subsidiary of Oldcastle Inc., Callanan Industries, Inc. is an Albany-based supplier of paving materials and construction services in New York State. In turn, Oldcastle is a subsidiary of CRH plc, an international company with its headquarters in Dublin, Ireland, specializing in building materials and value-added products, serving both the construction and do-it-yourself markets. Callanan is involved in four product areas. The aggregates segment includes crushed sandstone, limestone, and dolomitic limestone, produced by the company's quarry operations. Callanan provides aggregates in standard New York State approved sizes and is also able to custom manufacture to customer specifications. Callanan's asphalt products are produced at computer-controlled plants and meet the highest standards set by the federal government, New York State, and special agencies. Callanan also provides construction services, specializing in paving jobs ranging in size from small parking lost to major state highway projects. In addition, Callanan participates in the readymix concrete business through subsidiary Clemente Latham Concrete, the top supplier in New York's Capital District, which includes the cities of Albany, Try, and Schenectady.

19th-Century Origins

The man behind the Callanan name was Peter Callanan, a successful hay farmer who lived in South Bethlehem, New York. On part of his property located in Albany County were exposed limestone rock ledges, ideal for use as a quarry. In 1883 Callanan saw an opportunity to take advantage of this natural resource to supply ballast to the Buffalo and Weehawken Railroad, then under construction in the state. (Railroad ballast was crushed stone laid down as a bed beneath the tracks to provide drainage, track stability, and support for especially heavy loads.)

In addition to being a savvy businessman, Callanan was also a visionary. At a time when the automobile was little more than a drawing board creation, he foresaw the need for a system of state roads to facilitate commerce, replacing the rudimentary town and country roads that were in use at the time. These roads, of course, would need crushed stone.

To supply both ballast for the railroads and prepare for a future of road building projects, Callanan gathered a group of local investors to establish what would become Plant No. 1. His partners were Christian Scharbauer, a South Bethlehem shopkeeper who several years later moved to Texas, where the family grew rich through cattle and oil; John Newton Briggs, owner of several ice houses; and a local physician named Davidson. Supervised by Callanan, who retained a controlling interest, the quarry operation in these early days was a crude affair, involving considerable manual labor. Steel points driven into the stone by sledge hammers created holes just large enough to accommodate an explosive charge. The debris that resulted from the blast was then screened and loaded by hand. Not even shovels were used.

Peter Callanan also found time to champion his belief in better roads, advancing a way to pay for a system of state roads. He spoke to numerous town and county governmental bodies and in 1889 published a 40-page pamphlet entitled "Roads and Road Making" that laid out his beliefs. In this "practical treatise," Callanan maintained that America's network of roads were "inferior to those of any other civilized country." He also estimated that the delays in hauling agricultural and manufactured products caused by poor roads cost the state of New York more than $15 million a year.

In the meantime, his quarry prospered by providing railroad ballast. A steam-driven crusher and mill were added. In 1895 the business was incorporated as the Callanan Road Improvement Company. One year later, however, Peter Callanan died of a heart attack, leaving his wife, Hannah Whitbeck Callanan, to raise their six children and keep the company running. His brother John J. and cousin Olin, both non-stockholders, took charge of the quarry operations.

Highway Act of 1898 Spurs Callanan's Growth

Peter Callanan's persistence and belief in a state highway system would pay off two years after his death. The Highway Act of 1898, passed by the New York State Legislature, established a Highway Commission. The first contract was awarded to the Callanan Road Improvement Company to build a two-mile road leading out of Albany. With roadbuilding adding to its business, Callanan was able to pay off debts incurred in expanding the operation, and by the end of 1902 the company was debt free and on the verge of profitability.

However, on December 28, 1902, misfortune again struck: the crushing plant was completely destroyed by fire. Although some minority shareholders urged her to sell the company, Hannah Callanan decided to rebuild the plant. Part of her reason to carry on the business was that her son John Hoyt Callanan showed promise as its future leader. Both he and his brother Charles learned the quarry business from childhood and as young adults were able to manage the operation on their own, prompting their uncle, John J. Callanan, to move to Whiteplains, New York, to open his own quarry. Again, the company thrived and soon paid off the loans taken out to rebuild the stone crushing mill, and once more tragedy befell the Callanan family. On May 12, 1909, an explosive charge, a "big shot," went off early, killing 23 out of a 24-man crew. The only survivor was a man working on top of the ledge being blasted. Included among the dead were both John Hoyt and Charles Callanan. The grieving Hannah Callanan, having lost her husband and two sons, was once more urged to sell the company. She refused. Instead, she called upon her brother-in-law, John J. Callanan, to step in and make the quarry operational again.

A younger son, Reid Callanan, started working for the company in 1916. (He would later emerge as the company's long-time president.) In that same year the quarry business saw a significant change in technology with the purchase of a steam-powered shovel, which took a crew of nine men to operate: a crane man, fireman, engineer, and a six-man gang to reposition track on which the shovel operated. In 1919 Callanan added a second steam shovel. In addition, sledges and steel points were replaced by steam, and later compressed air drills. The new equipment helped the company to cut its costs, especially helpful during a price war that ensued when a second stone company, Albany Crushed Stone, was launched. There was simply not enough business in the market to support both companies. The price war lasted until 1929, when Albany Crushed Stone sold out to Callanan. Although the victor, Callanan was wounded and it took some time before the company regained its fiscal health. Also during this period, other family members joined the company: Keith Callanan in 1924 and Harry Battin in 1927.

Callanan operated the Albany Crushed Stone quarry for just three years, until, at the height of the Great Depression, management decided to shutter the operation. The equipment, however, would soon find good use at a new quarry Callanan opened in 1937 in Kingston, New York. The stone produced from this operation was then barged down the Hudson River to serve the New York market. The quarry supplied the heavy fill needed to make Flushing Meadows suitable to host the 1939 World's Fair.

In the 1940s and 1950s, as government spending during World War II spurred the U.S. economy, Callanan grew even more prosperous. In 1947 it formed a joint venture with Republic Steel, creating Callanan Slag & Materials Co., Inc., to process the slag produced by Republic's blast furnaces located in Troy, New York. In addition, Callanan supplied Flux stone to the Troy blast furnaces. Nevertheless, it was highway building, as Peter Callanan envisioned several decades earlier, that would become the lifeblood of the company.

During the Cold War years of the 1950s, the U.S. highway system was built as part of a program of national defense. In New York, one of those arteries was the New York State Thruway, running 67 miles from Albany to New York City. Callanan supplied more than 1.5 million tons of materials used to pave the length of the Thruway, plus 31 miles of access roads, six interchanges, and various bridges. By the end of this period, Callanan was operating three crushed stone facilities and five blacktop plants. In addition to supplying materials, the company provided construction services. Also of note in the 1950s, Hannah Callanan died in November 1952, two weeks short of her 97th birthday. Her husband may have provided the vision that launched the company, but it was her dedication to his vision, in spite of painful adversity, that was indispensable to Callanan's longevity.

Callanan Family Sells Company in 1967

A major project of the 1960s was the Empire State Plaza, a massive urban renewal project in Albany that in its day was the largest construction project in the world. Callanan supplied over 2.5 million tons of stone used in the construction of several public buildings. Ownership of the company passed out of the hands of the Callanan family in 1967 when Penn Dixie Cement acquired it. It was during this 15-year period of ownership that the company changed its name to Callanan Industries, a name more in keeping the company's activities beyond road building.

Penn Dixie encountered financial problems in 1980 and was forced to reorganize under Chapter 11 of the U.S. Federal Bankruptcy Code. Although Callanan was not a party to this reorganization, two years later the company was sold to M&S Resources Inc. for $14.1 million in order to allow the parent company, renamed Continental Steel Corporation, to fund its core steel business. M&S was a partnership headed by A.J. "Doc" Marcelle, Callanan's CEO during the period of Penn Dixie owner-

Further Reading:

• Drake, Bob, "Operations at a Crossroads Takes New Path to Profits," Pit & Quarry, October 1993, p. 24.
• Hency, Richard, "Callanan Industries Serving Upstate New York for 199 Years," North American Quarry News, July 2003.
• Phelan, Thomas, and P. Thomas Carroll, Hudson Mohawk Gateway: An Illustrated History, Sun Valley, Calif.: American Historical Press, 2001.

Source: International Directory of Company Histories, Vol.60. St. James Press, 2004.

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