Belfast Telegraph

Sunday 31 August 2014

Joint venture to be cemented in deal by top firms

Two of Ireland's major players in the cement and quarrying business are considering joining forces in a "logical step" others should follow, commentators have claimed.

Quinn Building Products and the Lagan Cement Group have signed a memorandum of understanding ahead of a possible joint venture that would first require the green light from the Irish Competition Authority.

It is understood the merger would involve a number of each business's numerous assets including Quinn's plants at Ballyconnell in Co Cavan and Derrylin in Co Fermanagh and Lagan's plants at Kinnegad, Belfast, Cork and in the Benelux countries.

In a joint statement, chief executive of Quinn Manufacturing Group Paul O'Brien and his counterpart at Lagan Cement Group, Jude Lagan, said: "By combining two stable Irish businesses the proposed joint venture will create a sustainable independent cement manufacturer that can continue to support its customers on a competitive basis."

A spokeswoman for the Quinn group added: "We believe the joint venture will enhance our ability to grow both domestically and on the exports side which will underpin jobs in this business."

She added the firm's recent investment of €15m (£12m) in solid recovered fuel is "very positive for the future of both the Ballyconnell Cement plant and jobs".

Discussions on the possible deal could take up to three months.

It comes despite the fact the Quinn business, formerly owned by jailed bankrupt ex-billionaire Sean Quinn, is effectively under the control of the Irish Bank Resolution Corporation, the Irish state-owned bank, after it was placed into receivership in 2011.

The Lagan Group is owned by Kevin Lagan, one of Northern Ireland's wealthiest businessmen.

Economist John Simpson said he believed "there's a certain uncertainty as to the motivation of the move" but said it could be regarded as a "logical response".

"This could be a logical response to the fact that the building industry is in a very distressed state and they are trying to rationalise capacity on the island of Ireland," he added.

Gordon Best of the Quarry Products Association Northern Ireland said: "When you look at the over-capacity issues within the construction materials industry it is the logical progression."

He said cement sales across the country reached heights of £6.5m in 2007 but had slumped to around £1.8m this year.

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