Blue Circle Industries
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Blue Circle Industries was a British public company manufacturing cement. It was founded in 1900, and was bought out by the French company Lafarge in 2001.
[edit] History
The company was founded in 1900 as Associated Portland Cement Manufacturers Ltd by the amalgamation of 24 cement companies[1], owning a total of 35 cement plants, all but two of which were located on Thames and Medway estuaries near London, England. These included the two cement plants (Robin's and Swanscombe) that first manufactured Portland cement in the 1840s. The initial prospectus of the merger[2] (in a time before anti-trust laws) was to unify the entire British cement industry, eliminating competition, and excluding imports. The attempt to achieve this failed, because a number of small companies, many of them outside the London area, refused to discuss the proposition, four major players in the initial discussions dropped out, and a further three committed companies dropped out at the last minute. Nonetheless, the company held 70% of the British cement manufacturing capacity (1.25 million tons per annum out of a total 1.8 million tons). The company had acquired, at considerable cost, patents related to the use of rotary kilns (see cement kiln). Armed with these, and its critical mass, the company expected to sweep all competition away.
However, the cement kiln patents proved valueless, since rotary kilns were already in place or being installed by their competitors. In the ensuing decade, the majority of the rotary kilns installed in Britain were installed by the competition, including several newly-launched companies. Because of the disastrous circumstances of the company launch, it was short of cash and could ill afford investment. By 1910 its capacity remained 1.25 million tons per annum, although competing capacity had risen to 1.8 million tons. Although a few favored plants had been uprated, the majority of the original 35 had been shut down. In 1911, a second attempt was made to unify the industry. 33 companies, including all the original drop-outs, were merged to form the British Portland Cement Manufacturers Ltd. This time, a substantial number of plants outside the London area were involved. Again, a small but significant number of companies refused to join. The combined APCM and BPCM companies now controlled 80% of national capacity, in 58 plants. This pattern became a template for subsequent history: declining capacity share was periodically boosted by acquisition of competitors, and the company continued to maintain 60-70% of British capacity until its demise.
In 1912, Blue Circle's overseas activities began. The Tolteca plant near Mexico city had been established by the American Louisville Cement Company. The Americans, rattled by Mexican political instability in 1912, wanted to sell out. A Blue Circle director traveling in Mexico wrote them a check, and on returning to London, announced to the Board that they were now operating in Mexico. Similar deals were made for plants in Vancouver Island, Canada and the Orange Free State, South Africa in the same year. In later years, its geographical spread became the savior of the company. The cement industry, although extremely capital-intensive, is subject to exaggerated economic cycles. Geographical spread allowed financing of investment in areas experiencing down-turns using revenue from more buoyant areas. At various times, the company owned or part-owned manufacturing capacity in Australia, New Zealand, Malaysia, Indonesia, the Philippines, India, Nigeria, Zimbabwe, Kenya, Tanzania, Egypt, Ireland, Spain, Denmark, Greece, the USA, Chile and Brazil. During the 1970s Blue Circle became, briefly, the largest cement manufacturer in the world[3].
In the 1920s, the company's main brand name - Blue Circle - began to be used informally for the company itself. But it was not until 1978 that the UK company name was officially changed from APCM Ltd to Blue Circle Industries PLC.
The company gradually built up a competence in the technical aspects of low-cost cement manufacture, and installed many new plants during the period 1950-1970, using its own specifications. It also sold manufacturing and plant-installation turnkey consultancy.
The company faltered following the 1970s energy crisis. The company's UK capacity reached its peak of 13 million tonnes per annum in 1973, and ultimately fell to half that level. Simultaneous world-wide contraction of markets lead to severe retrenchment. In the 1980s, major overseas investments were sold out, notably the by-then very large Mexican operation. The Mexican plants became incorporated in the Cemex group, which is now (2006) the world's third largest cement manufacturer. This was followed by several desultory attempts at diversification, which failed to enhance investor confidence. In the late 1990s, the company again attempted to expand its cement operations geographically, this time in cut-throat competition with other large companies. In 2001, the company, now shrunk to sixth largest world-wide, was bought by the French company Lafarge. Lafarge thus became the world's largest cement manufacturer. "Blue Circle" currently (2006) remains Lafarge's cement brand name in the UK.
[edit] Notes
- ^ A J Francis, The Cement Industry 1796-1914: a History, David & Charles, 1977, ISBN 0-7153-7386-2
- ^ Cook, P Lesley, Effects of Mergers, Routledge, 2003, ISBN 0-415-31346-5
- ^ Peter Pugh, The History of Blue Circle, Cambridge Business Publishing, 1988, ISBN 1-871341-01-9
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