Building materials company
This article is about the original company formed in 1903. For related businesses and successors, see
Tarmac (disambiguation)
.
Tarmac Group Limited
was a British building materials company headquartered in
Wolverhampton
,
United Kingdom
. It produced
road surfacing
and heavy
building materials
including
aggregates
,
concrete
,
cement
and
lime
, as well as operating as a
road construction
and
maintenance
subcontractor
. The company was formerly listed on the
London Stock Exchange
and was once a constituent of the
FTSE 100 Index
.
The company was founded in 1903 by
Edgar Purnell Hooley
two years after he
patented
the road surfacing material
tarmac
. The company grew quickly, first being
listed
on the
Birmingham Stock Exchange
in 1913 and on the
London Stock Exchange
in 1922. Despite intense competition and other challenging factors, Tarmac expanded both geographically and in its range of services, particularly as a consequence of intense demands of the
Second World War
. By 1953, Tarmac was processing over two million tons of slag per year while its road surfacing activities had developed into a substantial civil engineering business in its own right. During the 1950s and 1960s, it acquired numerous competitors, becoming the largest roadstone and construction group in Britain in 1968 following a three way merger between Tarmac, Derbyshire Stone and William Briggs.
During the 1970s, Tarmac Group made a decisive shift towards private home construction; by the end of the decade, it was building 4,000 houses annually and would become the largest housebuilder in Britain. At the end of the 1980s, its housebuilding activities accounted for half of Tarmac Group's profits, somewhat overshadowing its performance in other areas, such as its expansion into
North America
and other international markets. However, the company was ill-prepared for the
recession of the early 1990s
, having continued to invest heavily in land; the company's management orientated away from housing towards the construction sector. The company disposed of its remaining housing activities via an
asset swap
with the homebuilder
Wimpey
in exchange for its construction and minerals interests.
During July 1999, Tarmac
demerged
its construction and professional services businesses under the name
Carillion
; shortly thereafter, the Tarmac building materials business was acquired by
Anglo American
. In 2010, Tarmac Group was separated into Tarmac Limited and
Tarmac Building Products
. Three years later, Anglo American merged Tarmac Limited with the British-based assets of
Lafarge
to form a 50:50
joint venture
,
Lafarge Tarmac
(now
Tarmac Holdings
). Tarmac Building Products was subsequently sold to Lafarge Tarmac in 2014.
History
[
edit
]
Growth of a roadstone business
[
edit
]
The company was originally formed by
Edgar Purnell Hooley
as the
Tar Macadam (Purnell Hooley's Patent) Syndicate Limited
in 1903.
[2]
A distinguishing feature of the new
Tarmacadam
product was that it contained cheap blast furnace
slag
, a by-product produced by
steelworks
, thus the company entered into long term contracts with steelworks to ensure its supply.
[3]
The business was secured in 1905 by
Sir Alfred Hickman
, who became its first
chairman
.
[2]
The company remained under the effective control of members of the Hickman and Martin family until 1979. There were Hickmans as chairmen until 1959; more significantly, Cecil Martin, the son in law of Victor Hickman, was appointed a director in 1923 and managing director two years later.
[4]
Cecil's son Robin followed him in turn, serving first as managing director and then chairman and chief executive from 1971 to 1979.
[5]
Tarmac was first
listed
on the
Birmingham Stock Exchange
in 1913 and then the
London Stock Exchange
in 1922.
[6]
During the 1920s and 1930s, Tarmac had to cope with national
strikes
,
recession
and periods of intense competition. Nevertheless, the company gradually expanded its geographic coverage (particularly in the south east), increased its production of paving slabs and moved into road surfacing as well as supply.
[7]
As with so many companies in the construction industry, the
Second World War
increased the demand for Tarmac’s services, notably for surfacing the large numbers of
airfields
being built or modernised. By the time of its half centenary in 1953, Tarmac was processing over two million tons of slag per year, its road surfacing had developed into a significant civil engineering business, and its Vinculum subsidiary "had become one of the major precast concrete undertakings in the country."
[8]
Under Robin Martin's leadership, Tarmac moved from being an important regional force to a national roadstone and contracting business. Acquisitions played a major role in Tarmac's growth. While leading the roadstone division, Martin had been responsible in 1959 for the acquisition of local competitor Tarslag and Crow Catchpole, which gave it a greater presence in the south east.
[9]
In 1964, now group managing director, Martin acquired key quarrying assets, including Cliffe Hill Granite, Rowley Regis Granite and Hillhead Hughes.
[10]
In 1968, Martin engineered the three way merger between Tarmac, Derbyshire Stone and the Scottish Asphalt company, William Briggs, creating the country's "largest roadstone and construction group".
[11]
The group was briefly known as Tarmac Derby but the Derby name was later dropped.
[12]
Expansion into house construction and contract sectors
[
edit
]
Further acquisitions came during the 1970s and 1980s. Permanite, Britain's biggest roofing felt manufacturer, and
Limmer
, a quoted asphalt company, were both purchased during 1971,
[13]
while the 1973 purchase of
Mitchell Construction
(which had foundered on the
Kariba Dam
) strengthened Tarmac's construction division.
[14]
However, the acquisition which was to radically change the direction of Tarmac was
McLean Homes
, which was bought at the start of 1974.
[15]
McLean was run by Eric Pountain,
[16]
a one time
estate agent
who had sold his own housebuilding business to McLean, later taking over as managing director via a
boardroom coup
. McLean had been bought to strengthen Tarmac's own poorly performing housebuilding division and the enlarged operation, now run by Pountain, was producing around 2,000 houses per year.
[17]
Pountain had ambitions to become a national housebuilder, and by the end of the 1970s, McLean was building 4,000 houses per year and was a substantial contributor to group profits. However, there were problems elsewhere in the group. In 1976, Tarmac had bought the old established contracting firm of
Holland, Hannen & Cubitts
; this was followed by contract provisions of £16m in its
Nigerian
subsidiary.
[18]
The head of the contracting division was dismissed and the finance director resigned. The boardroom pressure on Martin increased, and in 1979, he was forced out to be replaced by Eric Pountain as the new group managing director. Whereas Martin had created a national roadstone group, Pountain was to create the country's largest housebuilder.
[17]
[19]
By the end of the 1980s, British housebuilding was accounting for half of group profits, even though it was not the only activity to have been expanded.
[17]
An alternative profits centre had been built up in
North America
, starting in 1984 with the staged acquisition of Lone Star Industries; by the end of the decade Tarmac was operating across seven states in the United States. Construction in the United Kingdom had also grown and Tarmac was involved in such prestige projects as the
Thames Barrier
and the
Channel Tunnel
.
[20]
Reorientation to heavy building materials and restructuring
[
edit
]
However, the expansionary nature of the group did not leave it well placed to face the
recession of the early 1990s
. In particular, the housing division continued to invest heavily in land even though the market had peaked, leading to provisions of £132m in that division alone. Like his predecessor before him, Pountain was forced to step down as chief executive to be replaced by
Neville Simms
, previously in charge of construction. Inevitably, the emphasis moved away from housing in favour of construction.
[17]
[21]
While the quarrying and construction businesses proved to be considerably stronger,
[22]
rumours around this time claimed that Tarmac was actually looking to potentially sell its interests in these sectors as well.
[23]
In October 1992, Tarmac acquired the privatised government agency
PSA
Projects to complement Tarmac Construction.
[24]
This was initially called TBV Consult (reflecting a short lived partnership between Tarmac and
Black & Veatch
) and was renamed TPS in 1998.
[25]
[26]
Tarmac Professional Services also included a scientific and materials testing consultancy (Stanger), a facilities management company, specialist architects firms, and IT businesses.
[27]
[28]
Housebuilding was progressively reduced in size until 1995, when Tarmac announced that the division would be sold. Later that year, Tarmac and
Wimpey
announced an
asset swap
whereby Wimpey acquired all of Tarmac's housing, and in return, Tarmac received Wimpey's construction and minerals divisions.
[29]
[30]
The downsizing continued, and in July 1999, Tarmac
demerged
its construction and professional services businesses under the name
Carillion
in a somewhat controversial move at that time.
[31]
[32]
[33]
Anglo American era and final years
[
edit
]
During November 1999, Tarmac, which had been effectively consolidated around its roadstone and road surfacing businesses, accepted a bid from
Anglo American Mining
in exchange for nearly $2 billion.
[34]
[35]
Within months of the acquisition being completed, Anglo American launched a restructuring of the company, under which a new regional structure for its quarries, asphalt and ready-mixed concrete activites was adopted. At the time, it was stated that expansion in continental Europe would be a major focus area.
[36]
In August 2007, Anglo American announced it would seek to sell Tarmac;
[37]
however, in February 2008, the company went on to report that it was putting the sale on hold, allegedly due to the economic consequences of the
Great Recession
.
[38]
[39]
In June 2008, Tarmac Iberia was sold to
Holcim
.
[40]
In 2010, the group was separated into Tarmac Limited and
Tarmac Building Products
.
[41]
In February 2010, Anglo American sold Tarmac's European concrete aggregates business to
Eurovia
; it also sold its Polish concrete products business to the private equity firm Innova Capital.
[42]
[43]
A few months later, the French concrete products business was sold to the private equity firm Foundations Capital.
[44]
In February 2011, Anglo-American announced a proposed joint venture with
Lafarge
that involved combining both companies' aggregates businesses in the United Kingdom. The merger, which excluded Tarmac Building Products, was completed in March 2013, following receipt of necessary approvals from the UK
Competition Commission
, forming
Lafarge Tarmac
.
[45]
[46]
Tarmac Building Products, the last part of the business still wholly owned by Anglo-American, was acquired by Lafarge Tarmac in April 2014.
[47]
[48]
Operations
[
edit
]
Tarmac Group consisted of Tarmac Building Products, Tarmac Middle East and 50% of Lafarge Tarmac.
Tarmac Building Products
[
edit
]
Tarmac Building Products was the largest supplier in the United Kingdom of heavy building products. It supplied aircrete blocks, aggregate blocks, bagged aggregates, mortar, screeds, sports surfaces, TermoDeck, foundry sands, grouts, plasters, renders, bagged cement and bagged lime. It also offers bespoke production and contract manufacturing.
Tarmac Middle East
[
edit
]
Tarmac Middle East was one of the largest and leading suppliers of aggregates and asphalt to the Middle East construction industry. It had interests in Primary Aggregate & Road Base Materials, Armour stone, Wet mix and Asphalt Products and Asphalt & Road Base contracting services.
Lafarge Tarmac
[
edit
]
Lafarge Tarmac was a 50:50 joint venture between
Lafarge
and
Anglo American
. It was the leading construction materials company in the United Kingdom, comprising cement, aggregates, ready mixed concrete, asphalt and contracting businesses in the United Kingdom.
Major projects by Tarmac Construction
[
edit
]
Projects undertaken by or involving
Tarmac Construction
prior to demerger of that business in 1999 included:
References
[
edit
]
Citations
[
edit
]
- ^
Ritchie 1999, p. 43.
- ^
a
b
Hooley, Edgar Purnell (1860?1942)’, by John Sheail
Oxford Dictionary of National Biography, first published September 2004
- ^
Ritchie 1999, p. 12.
- ^
Ritchie 1999, p. 40.
- ^
Ritchie 1999, p. 93.
- ^
Ritchie 1999, p. 38.
- ^
Ritchie 1999, p. 63.
- ^
Ritchie 1999, p. 60.
- ^
Ritchie 1999, p. 68.
- ^
Ritchie 1999, p. 74.
- ^
Ritchie 1999, p. 77.
- ^
Ritchie 1999, p. 80.
- ^
Ritchie 1999, p. 82.
- ^
Ritchie 1999, p. 84.
- ^
Ritchie 1999, p. 88.
- ^
"Obituary: Sir Eric Pountain"
. The Telegraph. 27 October 2003.
- ^
a
b
c
d
Wellings, Fred: Dictionary of British Housebuilders (2006) Troubador.
ISBN
978-0-9552965-0-5
,
- ^
Ritchie 1999, p. 92.
- ^
Gilbert, Nick (6 December 1992).
"Profile: Long live Eric the Blue: Sir Eric Pountain's Thatcherite faith remains unshaken as he makes his exit from Tarmac"
.
The Independent
.
- ^
Ritchie 1999, p. 105.
- ^
Connon, Heather (25 April 1993).
"Tarmac losses in 1992 almost 1m pounds a day"
.
The Independent
.
- ^
Stevenson, Tom (10 January 1995).
"Weakness in housing disappoints Tarmac"
.
The Independent
.
- ^
"French spotlight Tarmac weakness"
.
constructionnews.co.uk
. 28 September 1995.
- ^
"Tarmac buys PSA Projects"
.
The Independent
. 1 October 1992.
Archived
from the original on 26 May 2022
. Retrieved
16 January
2018
.
- ^
"History"
. TPS Consult
. Retrieved
16 January
2018
.
- ^
"UK: APPOINTMENT AT TBV"
.
constructionnews.co.uk
. 27 October 1994.
- ^
"£40m price put on Cox sale Merger of Tarmac and Bovis outfits announced Brace of deals sends hire sector into flux"
. Construction News. 26 February 1998
. Retrieved
17 January
2018
.
- ^
Barrie, Giles (22 January 1999).
"Vapid Tarmac report disappoints City"
.
building.co.uk
.
- ^
Ritchie 1999, p. 127.
- ^
"Tarmac and Wimpey sign barter deal"
.
constructionnews.co.uk
. 23 November 1995.
- ^
"Tarmac to split in two"
.
BBC News
. 16 March 1999. Archived from the original on 7 April 2003
. Retrieved
13 July
2008
.
{{
cite news
}}
: CS1 maint: bot: original URL status unknown (
link
)
- ^
Buckingham, Lisa (2 July 1999).
"Tarmac investors threaten revolt"
.
The Guardian
.
Archived
from the original on 7 May 2014
. Retrieved
21 February
2018
.
- ^
Minton, Anna (13 June 1999).
"Tarmac spins off construction arm as Carillion"
.
The Independent
.
Archived
from the original on 15 January 2018
. Retrieved
19 January
2018
.
- ^
"Anglo American to Buy Tarmac In Deal Valued Near $2 Billion"
. The Wall Street Journal. 5 November 1999.
- ^
Lloyd-Smith, Jake (6 November 1999).
"Tarmac falls to pounds 1.2bn Anglo American bid"
.
The Independent
.
Archived
from the original on 26 May 2022
. Retrieved
17 January
2018
.
- ^
"Anglo American restructure 'new' Tarmac"
.
agg-net.com
. 1 April 2000.
- ^
"Tarmac up for Sale"
. Building. 3 August 2007.
- ^
Macalister, Terry (21 February 2008).
"Anglo American puts Tarmac sale on shelf"
.
The Guardian
.
- ^
"Sale of Tarmac put off by credit crunch"
.
business-live.co.uk
. 21 February 2008.
- ^
"Anglo sells Tarmac unit to Holcim for $230m"
. Engineering News. 13 June 2008.
- ^
"Our history"
. Tarmac Building Products
. Retrieved
30 January
2015
.
- ^
White, Garry (16 February 2010).
"Anglo sells Tarmac's Continental businesses"
.
The Telegraph
.
- ^
"Anglo Sells European Tarmac Unit For ┬U254 Million"
.
bus-ex.com
. Retrieved
9 June
2024
.
- ^
"Fondations Capital acquires Tarmac's French and Belgian building materials operations"
. AltAssets. 5 May 2010.
- ^
"Lafarge Tarmac starts trading after deal approved"
. Global Cement. 7 January 2013
. Retrieved
25 March
2013
.
- ^
Cross, Luke (16 November 2012).
"Tarmac and Lafarge sell UK construction assets to Mittal"
.
constructionnews.co.uk
.
- ^
"Completed acquisition by Lafarge Tarmac Holdings Limited of Tarmac Building Products Limited"
(PDF)
. Competition & Markets Authority
. Retrieved
30 January
2015
.
- ^
"Anglo American sells all its Tarmac business units"
.
businesslive.co.za
. 12 January 2016.
- ^
"Preston Bypass Opening Booklet"
(PDF)
.
cbrd.co.uk
. Archived from
the original
(PDF)
on 29 February 2008.
- ^
"The Motorway Archive M1 London - Yorkshire Motorway, M10 and M45"
.
iht.org
. Archived from
the original
on 26 January 2008
. Retrieved
15 March
2015
.
- ^
"From the Suez Canal to the A9"
. Highway Engineer. November 1981
. Retrieved
4 June
2012
.
- ^
"Engineers and main contractors for the building of the Thames Barrier"
. Environment Agency. Archived from
the original
on 17 September 2008.
- ^
a
b
Ritchie 1999, p. 100.
- ^
Ritchie 1999, p. 108.
- ^
Ritchie 1999, p. 99.
- ^
"The Motorway Archive. The North Wales Coast Road. A55"
.
iht.org
. Archived from
the original
on 31 December 2008
. Retrieved
15 March
2015
.
- ^
EuroTunnel
at
Structurae
- ^
"Medway Tunnel"
. Rochester Bridge Trust. Archived from
the original
on 16 November 2007.
- ^
"Swindon Designer Outlet"
(Press release). 6 December 2010. Archived from
the original
on 4 March 2016.
- ^
"Canary Wharf"
. Schmidlin. Archived from
the original
on 6 February 2007.
- ^
Ford, C. R. (1997).
Immersed Tunnel Techniques 2
. Thomas Telford.
ISBN
9780727726049
. Retrieved
15 March
2015
.
Sources
[
edit
]
- Ritchie, Berry (1999).
The Story of Tarmac
. James & James (Publishers) Ltd.
- Wellings, Fred (2006).
Dictionary of British Housebuilders
. Troubador.
ISBN
978-0-9552965-0-5
.
External links
[
edit
]
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