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Florida Crushed Stone plant on the block
By SAUNDRA AMRHEIN
© St. Petersburg Times, published May 18, 2000
Florida Crushed Stone Co. has put its Brooksville cement plant up for sale, according to cement industry experts, and one says a local competitor might opt to buy it instead of building the county's third cement plant.
Florida Rock Industries is one of several companies interested in buying the 13-year-old cement operation of Florida Crushed Stone off Cobb Road, according to industry analysts. It was not clear if the mining operation is also up for sale.
If competitor Florida Rock makes the purchase, analysts predict it would abandon the increasingly difficult and long process of building a new cement plant. Florida Rock wants to place a new plant near its mining operations off Brittle Road north of Brooksville.
Neither company would comment about a pending sale of Florida Crushed Stone.
But Roy Grancher, a cement consultant based in Marietta, Ga., said he represents a client that is bidding for Florida Crushed Stone's cement operations in Brooksville.
Less than a month ago, Grancher submitted a market analysis report to his client, whom he would not name.
"The interesting part of it to me is that (Florida Crushed Stone) announced after a long delay that they are going to put another kiln on and then said they were going up for sale," Grancher said.
Florida Crushed Stone won approval by the Hernando County Commission in November to add a second kiln to its site off Cobb Road following months of delays and battles with the Planning and Zoning Commission.
Michael McHugh, vice president of Florida Crushed Stone, a subsidiary of Leesburg-based FCS Holdings Inc., would not comment on questions about a possible sale.
But he did say that the company was proceeding with the engineering and design of the additional kiln, which will double cement production at the plant to more than 1-million tons a year.
The company's growth has soared in fewer than three decades. Florida Crushed Stone runs 11 facilities in Florida and Georgia, including the Brooksville cement plant, a limestone-aggregates quarry and processing plant, three limerock mines, two sand mines and a trucking company.
In an interview with the Orlando Sentinel in March, Florida Crushed Stone founder Browne Gregg said further growth would require a great deal of spending. That was why he said he was considering becoming a publicly held company. Gregg founded the company in 1971 when he bought Camp Concrete Rock Co. in Brooksville.
"Someday we're going to have to be public," Gregg told the Sentinel. "Maybe by acquisition. The quickest and easiest way to become a publicly held company is for someone to acquire us."
There are several companies in the running for the Brooksville site, said John Bermudez, vice president of global strategy and research for Merrill Lynch in New York and a cement industry analyst.
"I would certainly think Florida Rock would be on the top of the list simply because they wouldn't want to lose that supply," Bermudez said. Florida Crushed Stone supplies Florida Rock with cement for its concrete processing plants.
Also, environmental and community obstacles to building a cement plant make it easier to buy an existing facility, he said.
"The opposition to cement plants is formidable beyond anyone's imagination, particularly in Florida. It's been quite dramatic," he said.
John Baker, president of Jacksonville-based Florida Rock, would not comment on a possible sale.
But he said Florida Rock buys only about 5 percent of its cement from Florida Crushed Stone.
Even if Florida Rock were to buy Florida Crushed Stone, he said, that would not necessarily kill plans for a new cement plant. Florida Rock received an initial go-ahead from the County Commission to build a $100-million plant north of Brooksville, despite an outcry by environmentalists and nearby residents.
"I'm not sure it would make a difference," Baker said.
Within the past month, Florida Rock received several objections and recommendations from the state about its proposal on land-use questions. It also is trying to obtain the proper state air permits.
Baker confirmed that Florida Rock has made bids on about four cement companies this year but would not say whether Florida Crushed Stone was one.
"We're looking; there's no question about it," he said.
The reason is that demand is high for cement, an ingredient in concrete. It's less costly for concrete-processing plants such as Florida Rock to make their own cement and sell the excess, rather than buy it. Buying a cement plant is more expensive than building one. But building one now can take years.
Local opposition and court battles delayed the construction and opening of Florida Rock's Newberry plant in Alachua County for five years, Baker said.
Sally Sevier, a Hernando County critic of mining companies but a stockholder in Florida Rock, said she would be relieved to see the company's money spent on buying a plant rather than building one.
"I would say to the board of directors, quit wasting my money on attorneys' fees and expert witnesses and permitting ... and increase my return on the investment," she said.
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