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Summit Materials closes on Day Concrete, Superior RM

Sources: Summit Materials Inc., Denver; CP staff

In a review of first quarter financials reflecting weather-hampered aggregates, cement and concrete shipments, Summit Materials notes the recent closing of two bolt-on transactions consummated in April: Day Concrete of Ardmore, Okla., and Superior Ready-Mix of Somerset, Ky. The producers are strategic to platform businesses, RK Hall Construction and Hinkle Contracting, serving the respective market areas of north Texas, Oklahoma and Arkansas, plus Kentucky. 

Summit CEO Tom Hill assesses encouraging metrics for the remainder of the year, especially regarding Texas and Utah materials operations and the Continental Cement business. “Heavy materials selling prices are trending higher in our core regional markets. Organic average selling prices on aggregates increased on a reported and mix-adjusted basis in the first quarter 2018, with both Houston and Salt Lake City achieving high-single digit organic growth in aggregates selling prices, when compared to the prior-year period,” he says. “Cement prices have now risen for six consecutive years in the United States, with no indications of abating. We anticipate our average realized selling price on cement sold in the Mississippi River corridor will grow in the low to mid single-digit percent range in 2018. As supplies of domestically produced cement continue to tighten, we anticipate price growth could escalate above current levels in 2019. 

“In Houston, our single largest ready-mix concrete market by volume, cement prices have increased by $6 per ton on a year-over-year basis. As a buyer of third-party cement in Houston for our ready-mix concrete operations, we believe higher cement prices will translate into higher ready-mix concrete prices in that market this year, given strong underlying demand in the region.”