Ennstone seeking innovation rewards

Aggregate producer Ennstone is repositioning itself to sell a bigger proportion of its output in markets that offer higher margins. Traditional products generate figures of just 5% to 7%, while innovative products can deliver margins of up to 35%.
Ennstone chief executive Vaughan McLeod said: "The new market is in decorative aggregates and the trick will be to turn Ennstone around so that instead of the current 8% of group sales going to this sector, we move to a figure of 25% in 2004 and target 40% in 2005."
Dust, previously thought of as a waste product, will play a part in this switch. Ennstone is gearing up to offer "designer dust" with a high type-specification because there is now an evolving market for such products.
"It's stored under cover now so there is no moisture in it," said McLeod. "Up until recently we'd been trying to get rid of our dust as it had a nil value."
The dust buyers being targeted include manufacturers of concrete products and agricultural lime vendors.
The quest for new niche markets has led Ennstone to launch Breeden Amber Gold (BAG). Uncrushed and unwashed, BAG is a 10ml-to-dust product that is planed and screened. It sells as a decorative material for footpaths and residential driveways and is being increasingly specified by architects, said McLeod.
Type 1 sub-base, a traditional aggregate product, makes margins of about 5% as the market faces keen competition from recycled products. By contrast, it is possible to see returns of 35% with BAG.
<F06E> On a strategic level, Ennstone plans to make an acquisition in central England to strengthen its regional presence.
It also plans small infills in Scotland to consolidate the northern market in aggregates and lift its market share in ready-mixed concrete in the area from 5% to 25%.