Rinker Group Ltd. History
Chatswood
NSW 2000
Australia
Telephone: 61 2 9412 6600
Fax: 61 2 9412 6666
Incorporated: 2003
Employees:
Sales: $3.94 billion (2003)
Stock Exchanges: Australian New York
Ticker Symbol: RIN
NAIC: 212312 Crushed and Broken Limestone Mining and Quarrying; 212313 Crushed and Broken Granite Mining and Quarrying; 212321 Construction Sand and Gravel Mining; 327121 Brick and Structural Clay Tile Manufacturing; 327123 Other Structural Clay Product Manufacturing; 327310 Cement Manufacturing; 327320 Ready-Mix Concrete Manufacturing; 327331 Concrete Block and Brick Manufacturing; 327390 Other Concrete Product Manufacturing; 327420 Gypsum and Gypsum Product Manufacturing; 551112 Offices of Other Holding Companies
Company Perspectives:
Rinker is a focused heavy building materials group--one of the top 10 in the world--comprising Rinker Materials Corporation in the US and the Readymix and Humes businesses in Australia and Asia.
Key Dates:
- 1855:
- Colonial Sugar Refining (CSR) is formed.
- 1926:
- Marshall E. "Doc" Rinker founds sand-and-rock hauling business in Florida.
- 1936:
- CSR begins developing means of producing wallboard using scrap from sugar cane refining operations.
- 1939:
- Readymix Concrete is established in Sydney; CSR begins production of wallboard based on sugar cane scrap.
- 1952:
- Readymix establishes U.K. operations.
- 1965:
- CSR acquires 50 percent of Readymix, which then spins off its U.K. operations as a separate, public company.
- 1981:
- CSR acquires remaining 50 percent of Readymix, which is combined with Farley and Lewers to form Readymix Farley.
- 1988:
- CSR restructures around dual core of sugar and construction materials; acquires Rinker Materials Corp. in Florida, which becomes CSR America.
- 1990:
- CSR America acquires ARC America, adding materials operations in Nevada and elsewhere.
- 1994:
- CSR acquires concrete business in Tianjin, China.
- 1998:
- CSR America begins new acquisition program, adding 28 companies over five years.
- 2000:
- Company acquires Florida Crushed Stone for $350 million.
- 2001:
- CSR America makes biggest purchase to date, paying $540 million to acquire Kiewit; company changes name to Rinker Group.
- 2003:
- CSR demerges, spinning off Rinker Group as separate, public company; Rinker acquires second Chinese concrete plant.
- 2004:
- Rinker announces plans to spend $120 million on new acquisitions and greenfield development.
Company History:
Rinker Group Ltd. is one of the world's top ten heavy building materials groups, with emphasis on cement, concrete, aggregate, and other construction and infrastructure materials, such as asphalt, cement pipes, and prestressed concrete products. Rinker Group was formed by the breakup of Australia's CSR Limited, which performed a demerger in 2003, separating into specialized sugar (CSR) and building materials (Rinker) companies. Although Rinker remains headquartered in Australia, that country accounts for less than 20 percent of its total sales, primarily through its Readymix and Humes concrete and concrete pipe businesses. The United States, where Rinker ranks among the industry's top five, is the group's largest market, generating some 80 percent of its revenues of more than $3.9 billion in 2003. Florida, the home base of the original Rinker operation and where the company is market leader, represents by itself more than 43 percent of the company's sales. Las Vegas and Arizona are also major markets for Rinker, and the company has also built a strong presence in the Midwest. Rinker has grown rapidly through acquisition in the highly fragmented heavy building materials market, in which high transportation costs force companies to establish local operations. The company has also established a foothold in China, acquiring two cement plants in anticipation of the expected building and infrastructure boom in that country. Nonetheless, China represented only 1 percent of the group's sales in 2003. Rinker Group is listed on the Australian and New York Stock Exchanges and is led by David Clarke.
Sugar Scrap Beginnings in the 1930s
CSR Limited originated as the Colonial Sugar Refining partnership in Sydney, Australia, in 1855. That company quickly grew into one of Australia's leading sugar companies. As the company grew, it became interested in making use of the large amount of sugar cane scrap left over from the sugar production process. In 1936, CSR began developing a method to transform the sugar cane fiber scrap into wallboard. By the end of the decade, the company was ready to launch production, and in 1939 CSR acquired a chemicals plant to begin manufacturing the Cane-ite wallboard brand.
Building materials became a major company focus during World War II, with the launch of a plaster mill in Sydney in 1942. The company began producing plasterboard in 1948, and extended its construction materials operations with the launch of a floor tiles unit that year as well. These were placed under a new subsidiary, CSR Chemicals. CSR developed a number of other interests during this time, including asbestos mining. By the late 1950s, CSR had begun manufacturing insulation materials as well.
CSR's introduction to the cement and concrete markets came in the mid-1960s when, in partnership with Blue Metal Industries, the company bought a 50 percent share of Readymix Concrete. That company had been founded in 1939 in Glebe, Australia, in order to produce Readymix-branded concrete. Readymix began delivering concrete using its own fleet of truck-mounted tumblers. Following World War II, Readymix began its national expansion, opening plants in Melbourne in 1945 and Brisbane in 1946. Other locations opened during the 1950s included Botany, Glanville, and Brompton.
In 1952, Readymix began its international expansion, opening a subsidiary in the United Kingdom--and promptly buying up its existing Readymix rival in that country. Readymix also entered Brazil in 1953, then, through its U.K. subsidiary, Germany in 1955. Readymix's European presence grew rapidly, especially in the United Kingdom. By the mid-1960s, Readymix had opened nearly 60 plants throughout the United Kingdom and had captured one-fourth of the market. Growth was slower in Germany, as the company more or less introduced ready-mix concrete to that market; yet by the 1960s, Readymix had established itself as a leader.
In the meantime, Readymix had not neglected its domestic market, where it added quarrying operations at mid-decade, starting with the purchase of the Styles quarry in Sydney in 1957. The company also acquired its own sand and gravel reserves in Penrith, in New South Wales, that year. In 1958, Readymix boosted its quarrying division with the acquisition of ABM, which operated quarries in Adelaide, Perth, Melbourne, Hobart, and Sydney.
After CSR acquired 50 percent of its capital, Readymix divested its foreign holdings, which included spinning off its U.K. and European branch as a separate, publicly listed company, Readymix (UK), which later became known as RMC.
CSR placed Readymix within its building materials division, boosting it in 1966 through the acquisition of a stake in Goliath Cement Co., based in Tasmania. That purchase enabled the company to enter the cement market for the first time, and gave it terminals in Sydney and in Melbourne. The company further expanded its cement operations through a joint venture with Pioneer International to buy Australian and Kandos Cement. The company also acquired slightly more than half of another prominent concrete and cement products group, Farley and Lewers Pty.
In 1976, CSR restructured its construction and building materials operations into three divisions: minerals, building materials, and construction materials. The restructuring came ahead of CSR's further diversification into the oil and gas industries. Nonetheless, CSR continued building up its construction materials division, acquiring full control of both Readymix and Farley and Lewers in 1981. These were then combined into a single subsidiary, Readymix Farley, which was then renamed CSR Readymix in 1987.
Moving into America in the 1990s
By the middle of the 1980s, CSR was forced to abandon its attempt to build a presence in the oil industry. Instead, in 1987, the company sold off its oil interests and refocused around a dual core of sugar and building and construction materials.
CSR then began a drive to step up its building and construction materials component. A key part of the group's strategy involved returning to the international market. This time the group turned to the vast and highly fragmented U.S. market, buying Florida's Rinker Materials Corp. in 1988 for $515 million.
Rinker had been founded in 1926 by Marshall E. "Doc" Rinker, who started in business hauling sand and rock with a single dump truck--which was subsequently repossessed in 1929. Yet Rinker was able to buy back the truck, and then went on to found a fleet of trucks serving a network of cement, concrete, and other construction materials plants throughout Florida. By the late 1980s, Rinker had grown into the largest heavy building materials company in Florida--then one of the fastest-growing markets in the United States, with sales approaching $500 million.
David Clarke was placed in charge of developing CSR's new American unit--which took the name of CSR America in the early 1990s. After restructuring Rinker's management--which had been closely controlled by its founder--Clarke began adding new businesses to the fold, building one of the first of the large-scale construction materials groups in the fragmented market. Growth in the sector nonetheless required establishing a physical presence in potential new markets--the high transportation costs of the materials made local production and delivery imperative.
CSR America made its first major acquisition in 1990, buying ARC America for nearly $700 million. That acquisition gave the company a significant quarrying business in the United States, and also enabled it to expand its construction materials operation beyond Florida. Among the companies included in the ARC purchase were Associated Sand & Gravel, adding four ready-mix, two concrete pipe, and four aggregates plants in Washington state; American Aggregates, based in Indianapolis, with 41 plants in Indiana, Ohio, and Michigan; and WMK Materials, with five plants serving the Las Vegas market, as well as ready-mix and block operations in Arizona.
The company supplemented those acquisitions with a long series of bolt-on acquisitions supporting its positions in the Las Vegas and Florida markets, but also in other markets, such as Baltimore and Albuquerque. The purchases helped boost the company's total U.S. construction materials revenues past $1 billion. At the same time, CSR made its first move into another potentially huge foreign market, China, buying a cement operation in Tianjin in 1994.
Yet the company's growth inspired competitors and, by the late 1990s, CSR America appeared to have lost its momentum, slipping from a fourth place position to fighting to maintain its spot in the top ten. After selling off most of its aggregates operations in 1997, the company began plans to launch a new acquisition drive in order to reclaim a spot among the top-ranking building and construction materials companies.
Focused Building Materials Group in the New Century
By 2003, the company had made some 28 acquisitions, spending more than $1.17 billion. Among CSR America's most notable acquisitions was its purchase of Florida Rock Industries, adding that company's quarry operations in 1999.
The following year marked CSR's return to the top five. In 2000, CSR bought Florida Crushed Stone for $348 million. The company next bought South Culvert, a manufacturer of concrete pipes, also in Florida. These acquisitions were joined by the $42 million purchase of American Limestone in 2001, with operations in Kentucky and Missouri, helping the company capture the number three position in the U.S. ready-mix market, number six in crushed stone, and the leading share of the concrete pipe market.
CSR America changed its name to Rinker Materials Corp. in 2001 in an effort to build a brand position in the U.S. market. The company continued to make bolt-on acquisitions, paying, for example, $42 million to Cemex in order to acquire five quarries complementing its American Limestone operations in Kentucky and Missouri--both states were earmarked for substantial federal infrastructure spending into the first half of the next century. The company also paid Hanson Plc $24 million to acquire its quarry and concrete operations in Las Vegas that year. In 2001, also, Rinker boosted its U.S. presence through the purchase of Mid-Coast Concrete Co.
At the beginning of 2002, CSR announced its plans to spend upwards of $1 billion on new acquisitions in order to solidify its U.S. operation. In July of that year, CSR announced its largest U.S. acquisition to date, with an agreement to purchase Kiewit Materials, the largest aggregates producer in Arizona, for $540 million. That purchase helped boost the share of heavy building materials to more than two-thirds of CSR's total sales--and more than three-quarters of its profits--sparking recommendations that CSR split itself into its two component companies in order to enhance its share value.
By the end of 2002, CSR agreed, and the company announced a spinoff of Rinker Materials Group for 2003. That move was completed at the end of March, with the creation of Rinker Group Ltd. The newly independent company was then listed on the Australian Stock Exchange. A listing on the New York Stock Exchange, in recognition of the preponderance of Rinker's U.S. operation in its sales, followed at the end of 2003.
In the meantime, Rinker appeared to have maintained its acquisitive nature. The company made its first post-demerger acquisition in May 2003, paying $8 million in order to buy Calloway Concrete, a supplier of concrete for swimming pools as well as a maker of precast burial vaults. The company then announced plans to spend more than $300 million over the next year or so on further acquisitions.
While most of the group's acquisition efforts targeted the United States, it nonetheless remained open for growth elsewhere. In mid-2003, for example, the company paid $5 million to acquire the second largest premix concrete plant in Qingdao, in China's Shandong province. That market appeared attractive given the presence of such major global manufacturing groups as Mitsubishi and Lucent.
After successfully listing its shares on the New York Stock Exchange in December 2003, Rinker began looking for new growth opportunities. In February 2004, the company announced plans to spend $120 million on acquisitions, as well as on greenfield expansion, to bolster its core U.S. holdings. By then, the United States accounted for some 80 percent of Rinker's total sales, which topped $3.4 billion in 2003. Yet the company remained committed, at least for the short term, to maintaining its status as an Australian company.
Principal Subsidiaries: Rinker Materials, Inc. (U.S.A.).
Principal Competitors: Lafarge Group; CRH Plc; Holcim Ltd.; RMC Group; Heidelberg Cement; Cemex SA; Hanson Plc; Italcementi SpA; Lafarge North America.
Further Reading:
- "Australia's Rinker Group Looks to Expand Via Acquisitions," Asia Africa Intelligence Wire, February 20, 2004.
- Drake, Bob, "A Closer Look: Rinker Materials Builds Solid US Foundations for CSR," Pit & Quarry, January 2002, p. 20.
- Easdown, Geoff, "Spin-Off by CSR to Result in World Giant," Courier-Mail, February 11, 2003, p. 23.
- Owers, Paul, "Heavy Building Materials Firm Seeks NYSE Listing," Palm Beach Post, October 7, 2003.
- "Rinker Acquires Calloway," Pit & Quarry, August 2003, p. 69.
- "Rinker Group Arrives on Wall Street," Concrete Products, November 1, 2003.
- "Rinker on Stock Exchange," Pit & Quarry, December 2003, p. 103.
- "Rinker's US Takeover Really One to Die For," Daily Telegraph, April 9, 2003, p. 55.
- Scholz, Nathan, "Soaring Aussie Hampers Rinker," Courier-Mail, February 20, 2004, p. 35.
Source: International Directory of Company Histories, Vol. 65. St. James Press, 2004.