Opportunities and rewards still exist for builders’ merchants

James Cousins, Regional Director – products for Breedon Group, argues that consolidation in the construction industry does not have to be a swear word

The construction industry is notoriously resistant to change, even when it is obviously for the better rather than for the sake of it. Why else would off-site manufacturing and initiatives like BIM and DfMA (Design for Manufacture and Assembly) still be so hard to get off the ground? The fall of the mighty Carillion, and on- going payment issues between main and sub-contractors, has only served to reinforce the belief that bigger is not necessarily better when it comes to the backbone of building.

Since Breedon acquired the Lagan Group in April the message to existing and new customers has been very much one of reassurance, that nothing is going to change and it’s business as usual. But, of course, it isn’t. It’s going to be better. And why shouldn’t it? Acquiring the Lagan Group’s portfolio of products (bagged cement, concrete tile, clay brick and clay products) gives a greater presence in the builders’ merchant market, and despite the challenges of the sector, the acquisition of Lagan by Breedon is set to benefit all. How?

Firstly, while the term “One stop shop” may smack of consolidation, it does actually mean that merchant customers will not only have more options for materials that might otherwise be in short supply (for instance, roofing tiles and clay brick) but also for their supply or delivery from one source.

It is not just the product mix of the new joint business that enables this. With two cement plants, around 80 quarries, 40 asphalt plants, 170 ready- mixed concrete and mortar plants, nine concrete and clay production plants, four contract surfacing businesses, six import/export terminals and two slate production facilities, the geographical footprint is maximised for distribution. This, and nearly 900 million tonnes of mineral reserves and resources, means the supply issues currently dominating the sector are not being felt to quite the extent that others are experiencing. As well as product availability, industry trends are also putting pressure on product development. Rising house prices and housing shortages which are forcing many people to move away from moving up the housing ladder to extending their existing home, and the closure of many UK brickworks over the past few years, have put increasing pressure on the RMI market.

The new portfolio under Breedon will enable the cross-selling of products from the former Lagan line as well as the promotion of products outside of their typical geographical boundaries. The builders’ merchant market is particularly nervous about consolidation affecting pricing and servicing but there is so much experience in the organisation now that the greater options available in terms of products and supply should be recognised.

W: www.breedongroup.com
T: 028 9264 7100.