Alamo Concrete Products Company (ACP)
During the 1980s, several cement plants were constructed along the Balcones Fault line (Georgetown, Texas to San Antonio, Texas). Some were replacements of old plants and some were expansions of existing facilities to increase cement production capacity.
This cement plant building explosion resulted in millions of tons of additional capacity and shortly after this period of construction, in 1984, Texas cement consumption hit a record high level. However these levels did not continue and by 1989, cement consumption in Texas had plummeted by 40%.
The decline of Texas cement consumption was caused by several events in the Texas and US economy:
- Oil prices dropped by 50% and the oil production business in Texas dried up;
- Savings & Loan Associations and banks failed all across the country and;
- Changes to the Federal Income Tax Code caused changes in construction patterns for both residential and commercial buildings.
By the end of this period, sales of ‘Alamo Cement’ were less than 500,000 st (453,590 mt), and the plant was operating below 60% capacity, an unhealthy situation for any cement plant. Needless to say, the cement business in Texas became extremely competitive and the future of Alamo Cement was at stake.
In response, ‘Alamo’ launched a strategy to increase its cement sales and capacity by acquiring ready mix assets to vertically integrate and to sell cement to those operations. Alamo’s management team went to work implementing this strategy and ultimately acquired 10 concrete companies. In addition, these newly integrated companies would be operated to maximize profits and provide a stand-alone return on the investments. The concept of vertical integration was not new to the Buzzi family as they have operated this way in their Italian market for many years.
Over the years ACP has relocated and replaced several plants and has added batch plants in strategic market areas to benefit our combined operations. These plants have replaced old and inefficient operations. Additionally, the company-owned ready-mix trucks have been replaced over the years, with the current average age of the fleet now approximately 8.5 years old.
Today ACP is one of the largest ready-mix producers in the state of Texas. This is accomplished with over 450 ready mix trucks and nearly 70 batch plants.
Other important acquisitions by the ready mix business include assets such as limestone quarries in Georgetown and San Antonio, Texas and a sand and gravel facility in Eagle Pass, Texas. These have provided the opportunity for ‘Alamo’ to expand its original plan and to vertically integrate concrete aggregates into its Company-produced ready mix. Today, about one-third of the concrete aggregates used by ACP are produced by ACP’s own limestone, sand and gravel operations. Much of the balance of the aggregates needed by ACP ready mix operations are purchased from suppliers who are vertically integrated in the Texas ready mix business and who, in turn, purchase significant amounts of Alamo's cement. Coupled with these ready mix acquisitions, ACP obtained authorization from the State of Texas to haul many products as a common carrier, which was a valuable addition. Previously being prohibited to act as a common carrier (hauling for others), this now enables ‘Alamo’ to expand its hauling business while supplying materials to its own operations. Today, ACP utilizes approximately 215 leased contractors, with their own tractors, that perform dedicated hauling for the Alamo group of companies.
The strategy to vertically integrate operations has proven to be highly successful in Texas. ACP maintains strong operations, and consumes approximately 600,000 st (544,311 mt) of cement, significantly contributing to the full-capacity operation of the Alamo Cement plant for more than two decades.