Michelmersh: brick manufacturers mothballing production units

The big three brick manufacturers – CRH, Weinerberger and Heidelberg Cement – have already mothballed some of their production units, but it is still not enough and there will be more to come, says Michelmersh chairman Eric Gadsden.

Michelmersh is a specialist brick manufacturer that avoids the mass market for standard brick products, opting instead for a smaller scale specialist focus.

While Gadsden sees the trimming of capacity by the big three producers (who hold over 90% of the brick market) to be a positive development, he thinks that the most important issue in the short term is the recovery of rising input costs. This problem “remains a major issue for the industry and it is not clear how this will be resolved.”

Gadsden adds: “Michelmersh is the only potential consolidator but we must be cautious in the present market place.”

The group’s chairman will present his views later today at the group’s annual meeting. As well as making specialist bricks, Michelmersh has land development and landfill operations.

Turnover in the first six months of 2008 was 7% higher than in the same period last year.

“While brick production is under pressure, we continue to generate strong cashflow from our landfill operations,” he said.

“Landfill rates have continued to climb, driven by regulatory pressures. We see no sign of any slowdown in this area of our business.”