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CRH (company)
Irish building materials company From Wikipedia, the free encyclopedia
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CRH is a building materials provider headquartered in Dublin. The company provides materials and integrated services for construction projects in transportation, infrastructure, buildings, and outdoor living sectors.
CRH operates extensively in North America and Europe and is one of the largest suppliers of concrete, asphalt, and other aggregates in North America, according to data from the United States Geological Survey (USGS) and Trellis.[3][4][5] In North America, the CRH Americas Division employs approximately 47,400 people, accounting for 59% of CRH's global workforce, and operates 2,008 locations, representing 52% of the company’s total locations.[2] This division contributes roughly three-quarters of the company’s overall profits.[6]
The company was formed in 1970 through the merger of Cement Limited (established 1936) and Roadstone Limited (1949). A Fortune 500 company, CRH transferred its primary listing to the New York Stock Exchange in 2023, having previously been listed on the London Stock Exchange and Euronext Dublin, where it was a constituent of the ISEQ 20.
CRH is recognized for its Environmental, Social, and Governance (ESG) performance, receiving an AAA rating from MSCI and an ‘A’ rating from Carbon Disclosure Project (CDP) in 2023 for its reduction in carbon emissions.[7][8]
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History
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1970–1980s: formation and listings
CRH (Cement Roadstone Holdings) was established in 1970 through the merger of Cement Ltd (est. 1936) and Roadstone Ltd (est. 1949).[9] According to Jonathan Guthrie of the Financial Times, the company name is pronounced "Cee Orr Haitch".[10] The company listed on the Irish Stock Exchange in 1973.[11]
CRH entered the United States market in 1978 by acquiring Amcor, a Utah-based concrete products group, which became Oldcastle Inc. The company expanded its U.S. presence in 1985 with the acquisition of Callanan Industries, a New York State aggregates producer.[12]
1990s: early Europe and US acquisitions
During the 1990s, CRH expanded into France through acquisitions including Raboni SA and Prefaest SA.[13]
The company entered Eastern European markets in 1995 with the purchase of Holding Cement Polski in Poland, marking its first cement manufacturing operation outside Ireland.[14] Further expansion included operations in Ukraine, including the purchase of Mykolaiv Cement and in Finland through the acquisition of Finnsementti Oy and Lohja Rudus Oy.[15][16][17] In the U.S., acquisitions included Betco Block & Products Inc. of Bethesda, Maryland in 1990;[18] Balf Co. in Connecticut, Lebanon Rock in Pennsylvania, Keating in Massachusetts and Sullivan Lafarge in New York state in 1994.[19] CRH also acquired Allied Building Products, which specialized in roofing and cladding products and Tilcon, a major road construction specialist in the Northeast United States in 1996.[20]
2000–2010: later acquisitions
The company entered Switzerland in 2000 with the EUR 425 million purchase of Jura Group, adding cement, concrete and aggregates operations, as well as a regional distribution network.[21] The following year, CRH acquired a 25% stake in Mashav, holding company for Nesher Israel Cement Works, the only cement producer in that country.[22] In July 2003, the company bought Cementbouw - a do-it-yourself store chain and building materials producer in the Netherlands for EUR 693 million.[23] In 2004, CRH paid €429m to purchase a 49% stake in Portuguese cement producer Secil. It sold that stake again in 2012 for €574m following a ruling on a shareholder dispute by an arbitration tribunal at the Paris-based International Chamber of Commerce.[24]
Expansion in the United States continued; CRH acquired Ohio's Shelly Group in 2000,[25] Mount Hope Rock Products, based in New Jersey in 2002[26] and Ashland Paving And Construction (APAC) of Atlanta in 2006, the company's largest deal.[27] In 2007 CRH purchased four companies worth a total of $350 million (€251 million) to add to its US materials division: these companies were Conrad Yelvington Distributors Inc. (CYDI), Eugene Sand & Gravel, Cessford Construction and McMinn's Asphalt and Prospect Aggregates.[28] Also in 2008, CRH agreed to purchase a landscape paver, Pavestone, for $540 million.[29]
The company entered Asian markets with investments in China's Heilongjiang region by acquiring a 26% stake in the Jilin Yatai Group (2006) as well as 50% of India's My Home Industries Ltd (2008).[30][31][32]
2011–2019: Americas, Europe and emerging markets
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CRH confirmed in 2013 that it was interested in looking at other opportunities in India.[33] In February 2015, the company acquired assets worth US$6.5 billion from LafargeHolcim, becoming the world's third-largest building materials group by market value.[34] This acquisition almost tripled CRH's net debt, bringing it to €6.6 billion.[35] In August 2015, CRH paid $1.3 billion for CR Laurence, a glazing company based in California.[36] The acquisition complemented CRH's existing North American BuildingEnvelope division, which employed 4,500 people at the time.[36] By November 2015, CRH was getting about a fifth of its operating earnings from US infrastructure.[37]
In June 2016, the Financial Times reported that CRH earned twice as much profit from the Americas versus Europe.[38] As of November 2016, half the asphalt, aggregates and assorted material it sold went to the United States.[35] At that time, CRH was the biggest producer of asphalt in the US and the third largest producer of ready-mixed concrete according to the Financial Times.[39] Sales for 2016 were €27.1 billion, an increase of 15 percent from the year before. Profit after tax was €1.3 billion.[40] In April 2017, the Irish Times noted that chief executive Albert Manifold's package almost doubled in 2016 to €10 million, despite disagreement among shareholders the year before on pay.[41] As of 27 April 2017, CRH was Ireland's biggest company.[40][42] Chief executive was Albert Manifold. That quarter, sales were up in its three divisions in Europe, while the Americas materials unit had higher sales as well.[42] At the time, it did 65 percent of its business in the Americas, while the market in the Philippines proving to be "challenging," and weighing down performance in Asia.[43] On 27 April 2017, CRH held their annual general meeting in Dublin, at which point 17 percent of shareholders voted against the company's executive pay structure. The year prior, 40 percent had voted against. At the meeting, chairman Nick Hartery noted that share price in the company had increased 80 percent since 2014.[40] Also in April 2017, it was reported that CRH was expecting to make a large-scale acquisition in 2018. At the time, over the earlier part of the year CRH had spent €500 million on eight acquisitions.[44] In early May 2017, BlackRock increased its stake in CRH[45] Also in 2017, CRH sold Allied Building Products to Beacon Roofing Supply for $2.6 billion.[46] By the end of 2017, the biggest acquisition was Fels-Werke GmbH, a German leading lime and aggregates business with 1 billion tonnes of high-quality limestone reserves, 11 production locations, nine in Germany and one in both the Czech Republic and Russia.[47]
In 2018, CRH purchased Ash Grove Cement,[46] and in July 2019, CRH sold its underperforming European distribution arm to Blackstone, a US investment firm, for €1.64 billion.[46][48]
2020s
In 2021, CRH invested $1.5 billion in twenty acquisitions, including Angel Brother Enterprises, a Texas-based asphalt paving and infrastructure company, and National Pipe & Plastics Inc., a New York-based manufacturer of water infrastructure and electrical conduit products.[49][50]
The company's portfolio restructuring continued in 2022. In February, CRH sold its Building Envelope business to KPS Capital Partners for $3.8 billion.[51] In June, the company acquired Barette Outdoor Living, an Ohio-based manufacturer with ten U.S. facilities, from TorQuest Partners and Caisse de dépôt et placement du Québec for $1.9 billion.[52][53]
Following a shareholder vote in June 2023, CRH transferred its primary stock listing from the London Stock Exchange to the New York Stock Exchange.[54] In August 2023, the company expanded its Texas operations through the acquisition of cement and concrete assets from Martin Marietta Materials, Inc. The purchase included the Hunter Cement Plant, having a 2.1 million ton annual capacity, serving Austin and San Antonio markets, multiple terminals along Texas's eastern gulf coast, and twenty ready-mixed concrete plants.[55]
In December 2023, CRH established a venture capital division, CRH Ventures, with a US$250 million fund. This unit focuses on investments in construction and climate technology companies.[56][57]
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Operations and Products
CRH produces construction materials, primarily aggregates and cement, and manufactures a range of construction products including ready-mixed concrete, asphalt, and infrastructural components. The company's operations encompass materials production, manufacturing, and construction services across infrastructure, building, and transportation sectors.
Notable projects involving CRH materials and services include the Silverstone race track resurfacing in England by CHR's subsidiary, Tarmac.[58]
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Governance and operating structure
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Headquarters and board
CRH is registered in Ireland and headquartered in Dublin, Ireland. It has a board of 12 members:[59]
One Director is an executive of the Group.
- Jim Mintern, Chief Executive (Ireland)
Each of the eleven remaining sits as a Non-Executive Director.
- Richie Boucher, Chairman (Ireland)
- Lamar McKay (US)
- Caroline Dowling (Ireland)
- Richard Fearon (US)
- Johan Karlström (Sweden)
- Shaun Kelly (US)
- Badar Khan (US)
- Gillian Platt (Canada)
- Mary K. Rhinehart (US)
- Siobhán Talbot (Ireland)
- Christina Verchere (Romania)
Mark Towe (chairman, CRH Americas) retired from the board on 31 December 2016.[60]
Structure and divisions
CRH is split into two Divisions, CRH Americas and CRH Europe. [61] The Americas Division consists of two segments: Americas Materials Solutions and Americas Building Solutions. This division employs approximately 46,400 people, representing 59.1% of CRH's total workforce, and operates 1,949 locations which account for 57% of the company's global locations.[2] These facilities are spread across 48 U.S. states and seven Canadian provinces.[2]CRH Americas contributes roughly three-quarters of the company's overall profits.[6] CRH's CEO, Albert Manifold, has stated that the company is the largest building materials business in the United States, with operations exceeding those of its four closest competitors.[5]
The company’s Europe Division also consists of two segments: Europe Materials Solutions and Europe Building Solutions. In both Eastern and Western Europe CRH has stated it is experiencing increasing demand for its integrated end-to-end solutions offering. The Division employs approximately 32,100 people at 1,441 locations across 28 countries.[62]
CRH's operating companies include:
- C.R. Laurence Co., Inc.
- De Ruwbouw Groep (DRBG)
- Calduran
- Dycore
- Heembeton
- Oldcastle BuildingEnvelope
- Oldcastle Infrastructure
- Tarmac
- Irish Cement
- Roadstone
- Rudus
- HALFEN
- Ancon
- Cementbouw
- Bauking (sold to Blackstone)
- BMN Bouwmaterialen
- Raboni
- Eqiom
- Tilcon
- The Shelly Company
- Polbruk
- Sigco
- Ash Grove Cement Company
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Financial performance
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The following is a summary of financial data:[63]
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Environmental and social impact
In 2023, CRH introduced a Sustainability Framework addressing water management, circular economy, and decarbonization.[64][65] The company reported processing 43.9 million metric tons of industrial byproducts and waste as raw materials and fuels, using 164 times more external waste than it produced.[64][66]
CRH is a founding member of the Global Cement and Concrete Association (GCCA). The company’s then Chief Executive, Albert Manifold, was the GCCA's first president in 2018.[67] In May 2024, CRH set a target to cut carbon emissions by 30% by 2030, aiming for net-zero emissions by 2050.[66][68]
In November 2023, CRH signed a Memorandum of Understanding with Volvo Group to develop net-zero construction vehicles and equipment.[68] In 2024, it launched a five-year, $15 million program with UNICEF to improve access to vaccines against life-threatening diseases for over 1.2 million children .[69]
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Controversy
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Cartel accusations
Poland
In Poland in 2007, CRH was fined €530,000 by the Polish Competition and Consumer Protection Commission for interfering with evidence that Polish authorities were gathering for a price-fixing investigation.[70] In 2009, Grupa Ożarów (in which CRH first invested in 1995) was fined €26 million for operating a price fixing cartel in Poland.[71] The Polish Competition Regulator stated that seven companies, which accounted for almost 100 per cent of the market, had fixed minimum prices for grey cement and agreed on a market share for each operator. CRH has stated its belief that Ozarów operated an independent commercial policy in Poland and the fine was appealed.[72]
Ireland
In Ireland in 1994, Irish Cement Limited, a wholly owned subsidiary of CRH, was determined by the European Commission to be part of price fixing and market sharing cartel across Europe which it said had illegally and artificially inflated the price of cement throughout the continent. A fine of over €3.5 million was levied.[73] In Ireland in 1996, High Court proceedings were initiated against CRH, its subsidiaries and two competitors in which the plaintiffs accused CRH and the others of operating a cartel and employing an illegal and anti-competitive eviction strategy in order to put them out of business.[74] In 2012, CRH applied successfully to have the claim dismissed on the basis of the "inordinate and inexcusable delay" in bringing forward any evidence in the case.[75] That judgement was appealed to the Supreme Court in 2012. At the time of the appeal it emerged that the presiding judge in the proceedings had ownership of some shares in CRH and was forced to stand down.[76] As of 2012, the Irish cement and concrete industry at large was under investigation by the Irish Competition Authority.[77]
United States
In 2006, an antitrust lawsuit was filed in California against CRH subsidiary Oldcastle Precast and three AT&T affiliates. The defendants were alleged to have unreasonably restrained trade and conspired to monopolize telephone vaults for land-line connections. Plaintiffs challenged a contract requiring developers to purchase Oldcastle Precast product for properties served by AT&T infrastructure. They contended the arrangement led to Oldcastle Precast capturing northern California sales of precast electrical vaults, which were often placed concurrently with telephone structures. In 2010, an American Court of Appeal ruled that the plaintiff's counsel had failed to provide enough evidence to show that the defendants harmed competition in California and Nevada telephone vault markets.[78]
In October 2009, a cement and concrete price fixing class action lawsuit was filed in Florida against Oldcastle Materials and others. The claim alleged that the defendants eliminated competition in the market for cement and concrete by charging artificially high prices from at least the period 2000 to 2009. The claim further alleged that the conspiracy was facilitated through in-personal meetings, telephone conversations and other communications. In 2008 the defendants announced uniform price increases for concrete and cement, bringing their prices to the same level at the same time, the lawsuit claimed. Then in September a number of defendant companies cut the price of concrete in an effort to lure customers away from independently owned concrete firms. The lawsuit stated that the practices alleged in the cement and concrete industry were clearly illegal.[79] In 2012, the case was settled for undisclosed terms.[80]
April 2014, "ridiculously dangerous" was the description applied to an Oldcastle Materials construction zone in Cleveland, Ohio in a wrongful death lawsuit regarding the death of Randy Roginski on 27 July 2010. The family of the deceased was awarded $19 million in compensation and the CRH-related Shelly Company was levied $20 million in punitive damages.[81]
Other allegations
Poland
In 2005, a Polish businessman, Marek Dochnal, alleged to a Polish Parliamentary Inquiry that he had arranged a bribe of almost $1 million for CRH to a former minister for privatisation, Wieslaw Kaczmarek, in connection with the privatisation of a cement plant at Ozarow, in central Poland, in 1995.[82] CRH, which now owns and operates the cement plant at Ozarow, said the allegations were "without foundation".[83]
It was also revealed in 2005, that CRH contributed €125,000 to a charity founded by the wife of Poland's president, Jolanta Kwasniewska. Both CRH and the Polish first lady denied any sinister motive behind the transaction.[84]
Ireland
In 2003, CRH was accused of making payments to Ireland's former Taoiseach Charles Haughey as details emerged of how Haughey received payments from various companies and businessmen in return for political favours. In 1969, Roadstone Ltd (CRH) sold 80 acres of land to Haughey, the then Minister of Finance, for £120,000. In 1973, Haughey sold 17.5 acres of that land back to CRH for £140,000. Within four years, Haughey had made a net profit of £20,000 and 62.5 acres at CRH's expense.[85] Charles Haughey was offered chairmanship of CRH in 1972.[86]
Ansbacher Bank
The existence of illegal offshore accounts first emerged in 1997 during the McCracken Tribunal set up to investigate reports of secret payments to former Taoiseach (Irish Prime Minister) Charles Haughey and former cabinet minister Michael Lowry.[87]
The bank was founded in the 1970s and was being run by Des Traynor who was chairman of CRH from 1989 to 1994 and who ran his bank during that period out of CRH's registered office in Dublin's Fitzwilliam Square where the company provided an office for its chairman. Traynor was also personal financier to Charles Haughey.[88]
During the investigation it materialised that Justice Moriarty held approximately £500,000 in CRH shares and while that in his opinion precluded him from investigating certain matters concerning CRH he was not, he said, precluded from inquiring into banking activities conducted from Des Traynor's offices at Fitzwilliam Square.[89] Criticism was laid upon those in charge of appointing Moriarty given his shareholding.[90]
In 1999, as evidence on the scale of the Ansbacher accounts grew Tánaiste (Irish Deputy Prime Minister) and PD Minister Mary Harney asked the High Court to appoint inspectors who could identify the account holders.[91]
The High Court Inspectors' report was published in 2002.[92] It found that eight out of fifteen CRH directors held Ansbacher accounts, including four former chairmen.[93] It also concluded (Chapter 15, p. 189) that "CRH as a corporation cannot be said to have knowingly assisted in the carrying out of Ansbacher’s activities in Ireland".[92]
After the publication of the report CRH acknowledged publicly that its then Chairman had "misused its facilities and personnel" which "represented a grave breach of trust by Mr Traynor".[94]
Sale of Glen Ding Lands
In 1998, Dáil Éireann (Ireland's Parliament) voted against an investigation into why an asset with the potential to produce a yield of £48 million in terms of sand and gravel reserves was sold to Roadstone, a subsidiary company of CRH, without public tender for £1.25 million in 1991.[95]
Many opposition members of parliament voiced concerns that at the time of sale, Charles Haughey was Taoiseach and his financier Des Traynor was Chairman of CRH. Dáil Éireann voted not to investigate whether CRH had donated funds to any political party or politician before or after the purchase of Glen Ding.[96]
The State's Comptroller and Auditor General conducted an investigation into the sale and found that the competing bid fell "far short of" the Roadstone offer and that "The Department acted at all times in the best commercial interests of the State" (Section 9.6). It also noted "even though it is unlikely that the Roadstone offer would have been bettered. The attraction of concluding the sale at what was considered a good price outweighed the imperative to act evenhandedly which is a basic principle when the State is doing business". It was noted by the Department's Accounting Officer that the Roadstone offer "was more than 50% above the only alternative offer received", that another bidder "was afforded every opportunity" to make a better offer and that given subsequent delays and planning issues. "In retrospect the deal had proved to be exceptional".[97]
The Glen Ding transaction was further investigated by the Moriarty Tribunal which in 2006 reported its conclusion "that there was no connection, directly or indirectly, between Mr Charles Haughey and any aspect of this disposal, nor any connection between the operation of the Ansbacher accounts and any aspect of the disposal."[98]
Public criticism
In 2005, opposition TD (Teachta Dála - Irish member of parliament) Phil Hogan, who later became Minister for Environment (2011 - ), stated in Dáil Éireann that "there is a widespread problem with competition in this economy... In the case of CRH, profits have been extracted from the Irish economy by means of a complex industry structure that is both anti-competitive and anti-consumer. The European Court of First Instance and finally the European Court of Justice have upheld findings of serious anti-competitive behaviour against CRH and other. While Sweden, Finland, UK, France and Germany have since levied huge fines against the cement industry, Ireland’s answer has been a stony silence."[99]
In 2011 TD Shane Ross, a repeated critic of CRH as a journalist stated that CRH "disturbs" him and questioned why there had been no investigation of CRH in Ireland considering the adverse findings made against the company elsewhere.[100]
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References
External links
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