Brickworks says it has laid the first paver in its ‘inevitable’ overseas expansion with the $151 million purchase of American brickmaker, Glen-Gery.
Australia’s largest brick manufacturer announced on Friday it was putting its year-long international strategy into action with the acquisition of fourth biggest player in the $2.2 billion US brick industry, with the deal including 29 Glen-Gery quarries, 10 manufacturing plants and 10 retail distribution centres across America’s north-east.
Brickworks said the Philadelphia-based Glen-Gery sells about 230 million US bricks per year and booked earnings of $A18 million in the 12 months to September.
Brickworks managing director Lindsay Partridge said moving into overseas markets was inevitable due to limited local expansion options and red tape on Australian businesses.
‘The US is an attractive country to invest and grow our business, with tax policies that are supportive of business, proactive energy policy that is placing downward pressure on prices, and efficient transport infrastructure,’ Mr Partridge said in a release.
‘The contrast with Australia could not be more stark, where we are faced with high taxes and wages, including taxes on wages, a shortage of energy for domestic use that is causing exorbitant prices, and costly approval processes for business investment.’
Mr Partridge said while Brickworks had first discussed expanding into the US a year ago, it remained fully committed to the Australian market.
The company owns a 42.72 per cent holding in Washington H. Soul Pattinson, and posted a net profit of $175.4 million in 2017/18, down 5.8 per cent on restructuring and commissioning costs.
Brickworks shares had dropped 1.05 per cent to $15.04 by 1111 AEDT.