Adelaide Brighton is losing one of its major customers with Cement Australia deciding to build its own plant to supply its needs in South Australia.
There are reports that Cement Australia’s new manufacturing plant will be built in Osborne, 19 km north of Adelaide, and the home of Penrice Soda Holdings.
Clinker is used in the manufacture of Portland cement and Adelaide Bright’s excess capacity may well be shipped to cement manufacturers in NSW and Queensland at competitive rates.
Adelaide Brighton is currently South Australia’s sole clinker manufacturer with facilities in Birkenhead. In an ASX filing, the company expects its profits before tax to decline by around $15 million by 2016.
Cement Australia is the country’s largest local cement producer and has a reputation of being an aggressive player in the market.
Last week, the company was found to have broken competition law by colluding with a supplier in south-east Queensland to keep competitors out of the market for fly ash.
In 2011, Cement Australia closed its Kandos, New South Wales, manufacturing facility, blaming government taxes and regulations.
Cement Australia is jointly owned by Swiss company Holcim and Germany’s Heidelberg Cement.