Vicat S.A.
Address:
6 Place De L Iris
92400 Courbevoie
France
Telephone: (33) 01 58 868 686
Fax: (33) 01 58 868 686
http://www.vicat.fr
Statistics:
Public Company
Incorporated: 1853
Employees: 5,700
Sales: EUR 1.46 billion ($1.27 billion) (2003)
Stock Exchanges: Euronext Paris
Ticker Symbol: VCTP
NAIC: 327310 Cement Manufacturing; 327410 Lime Manufacturing
Company Perspectives:
The Group objective is to continue expansion in the cement industry. This expansion is based on a balanced mix of mature and growing countries, and on the acquisition of cement plants, which contribute rapidly to profitability. The financing of these operations is assured by cash flow and by loans, in keeping with the overall financial integrity of the balance sheet. The completion of an operation will often prompt us in the future to continue expanding in the country in which we initially invested, through the internal development of cement activities and other smaller operations in ready-mixed concrete or offshoot aggregates of the cement industry.
Key Dates:
1817: Louis Vicat publishes a method for the production of artificial cement.
1853: Joseph Vicat constructs a factory to produce cement using his father's method.
1863: The company is incorporated as SNC Ciments Merceron-Vicat et Cie.
1919: SNC Ciments Merceron-Vicat et Cie converts its status to a limited liability company.
1922: The company builds its first two large-scale cement production sites in France.
1967: Société Méditerranéenne des Chaux et Ciments Portland Artificiels is acquired.
1968: The company builds a new cement plant in Créchy.
1969: Société des Ciments de Xeuilley is acquired.
1970: The company buys Ciments de Voreppe et Vouvesse and Ciments de la Porte de France.
1971: Ciments de Pont-à-Vendin is acquired.
1973: The company enters the wholesale and distribution market with the purchase of l'Auxiliaire des Matériaux de Construction Auximaco.
1974: The company enters the United States with the purchase of Ragland plant in Alabama.
1980: Société des Ciments Chiron is acquired.
1983: The company diversifies into paper and packaging with the purchase of Les Papeteries de Vizille.
1984: The company changes its name to Vicat SA.
1987: Lebec cement factory in Los Angeles area is acquired.
1989: Vicat acquires SATM, a transporter of aggregates, cement, and concrete.
1991: Konya Cimento, in Turkey, is acquired.
1994: Bastas Baskent, in Ankara, Turkey, and SOCOCIM, in Senegal, are acquired.
2001: Vigier, in Switzerland, is acquired.
2003: Cementi Centru Sud, in Italy, and Sinai Cement Company, in Egypt, are acquired.
2004: Materiaux SA, in France, and Biedermann, in Switzerland, are acquired.
Company History:
Vicat S.A. is France's third-largest producer of cement, concrete and granulates, and also holds a strong share in these markets in the United States, through its National Cement Company subsidiaries in Alabama and California. Vicat produces more than 17 million tons of cement per year in 12 factories, including five in France, two in the United States, two in Turkey, and one each in Senegal, Egypt, and Switzerland. The company also operates grinding plants in France and Italy. Each year, the company produces more than seven million cubic meters of concrete in nearly 210 sites in France, the United States, Switzerland, and Turkey, and more than 15 million tons of granulates in 57 locations in France, Turkey, Switzerland and Senegal. The company's products include its Prompt brand of fast-setting cement. Vicat has also extended its operations over the years into a number of complementary activities, including specialty concrete coatings; prefabricated concrete products, including sewage and drainage pipes; transportation and logistics of concrete and other building materials; wholesale distribution of concrete and other building products through a chain of ten depots; and paper through Les Papeteries de Vizille, which produces 30,000 tons of specialty papers per year, especially paper and packaging for the construction industry, including cement sacks. These operations accounted for nearly 20 percent of the group's sales, which neared EUR 1.5 billion ($1.3 billion) in 2003. Cement added approximately 40 percent to the group's sales, while concrete, including ready-mix and granulates, added nearly 41 percent. France remains the group's primary market, at nearly 50 percent of sales. International sales topped 50 percent for the first time in 2003, with the United States, at 22 percent, representing the company's second-largest market. The company was founded by the son of Louis Vicat, the inventor of artificial cement, and the family remains the company's largest shareholder, with some 53 percent of shares. CEO Jacques Merceron-Vicat is the sixth generation to lead the company. Quoted on the Euronext Paris Stock Exchange, Vicat's other major shareholder is HeidelbergCement, which controls 35 percent of its shares.
Beginnings in the 1850s
Cement making had remained relatively unchanged from the Roman period into the early 19th century. However, traditional cement techniques, mixing limestone with hardened clay fragments and furnace slag, were not as suitable for underwater use. When Louis Vicat, a graduate of France's prestigious Ecole Polytechnique, received an order to construct a bridge over the Dordogne River in 1812, he began searching for an alternative method for producing cement.
Vicat's research led him to test various materials and combinations as well as methods for mixing them. Over the next four years, he searched throughout France, finding a great number of limestone deposits. Vicat also identified the components of natural cements, that is, clay and lime, and recognized a cement mixture's holding power relied on the type and quality of the clay.
By 1816, Vicat had developed and published his "theory of hydraulicity," in which he identified the hydraulic forces generated through mixing the appropriate proportions of lime and clay. Vicat also developed a classification system based on the hydraulicity of various substances and the proportions needed to create an artificial cement. As Vicat wrote: "Since we know how and why the hydraulic power changes, depending on the respective contents of limestone and clay, therefore we know how to produce artificial mixes at will and with accuracy." By 1817, Vicat had perfected the method and introduced the world's first artificial cement.
To his credit, Vicat did not seek to patent his artificial cement, nor did he launch the production of cement on any kind of scale. Yet Vicat's invention was to have a dramatic effect on building techniques in the 19th century, making possible construction on a vastly larger scale, inspiring a great deal of innovation, and literally laying the foundation for the Industrial Revolution.
The Vicat family remained closely linked to Louis Vicat's invention. Vicat's son Joseph, who had also attended the Ecole Polytechnique, decided to launch the first large-scale industrial production of artificial cement. Vicat built his first cement factory in 1853, in Genevrey-de-Vif in the Isere region. Vicat's company took advantage of the clay deposits in the Chartreuse hillside, in particular a vein yielding a particularly fine clay. The company was to continue to exploit that vein for more than 150 years, enabling it to develop its fast-setting Prompt cement.
The Vicat company remained in the family and became incorporated as SNC Ciments Merceron-Vicat et Cie in 1863. The company later changed its status, incorporating as a limited liability company in 1919. By then, Vicat's invention had inspired further new materials, such as Portland cement and ready-mix concrete. Vicat had also expanded its operations, adding on a number of complementary operations, such as production of concrete-based products, including sewage and drainage pipes and foundation blocks. Vicat also began producing concrete coating and facings.
A growing number of competing producers arose in the wake of Vicat's success. Yet the company remained a leading player in the sector throughout the 20th century. In 1922, the company succeeded in building France first large-scale cement production plants, in Montalieu and in La Grave de Peille. The launch of production at these sites helped boost the company's total yearly production to more than 2.5 million tons.
International Growth in the 1970s
Into the 1960s, the French cement and concrete industry remained highly fragmented. This was due in large part to the difficulty and high cost of transporting cement and concrete, a situation that favored the development of a highly localized industry. Yet the small scale of the majority of cement producers made it difficult to carry out the investment needed to expand and modernize their facilities. In Vicat's case, production rose only slightly into the middle of the decade, just topping three million tons per year.
The need for scale, along with French government pressure, encouraged the first wave of consolidation in the cement and concrete sector in the late 1960s. Vicat quickly emerged as a leader in the consolidation movement. The company's first acquisition came in 1967 with the purchases of Société Méditerranéenne des Chaux et Ciments Portland Artificiels. The following year, the company expanded its own operations, establishing a new cement plant in Créchy.
Vicat made its next purchase in 1969, taking over Société des Ciments de Xeuilley. In 1970, the company added Ciments de Voreppe et Vouvesse and Ciments de la Porte de France. These were followed by the acquisition of Ciments de Pont-à-Vendin in 1971. In 1973, Vicat added a wholesale and distribution business, l'Auxiliaire des Matériaux de Construction Auximaco.
While Vicat continued seeking out new acquisition targets in France, its attention turned to the international market in the mid-1970s. In 1974, the company made its first foreign acquisition, buying up the National Cement Company of America in Ragland, Alabama. That company had started producing cement around the turn of the 20th century and became the leading cement producer in Alabama. The addition of the Ragland facility, along with Vicat's other acquisitions, helped boost its total production to nearly six million tons that year.
The recession of the 1970s slowed down Vicat's growth. In 1980, however, the company renewed its expansion drive, turning first to Société des Ciments Chiron. Vicat also continued seeking to diversify its business with complementary activities. In 1983, the company acquired Les Papeteries de Vizille, which produced specialty printing and writing papers. While the paper mill maintained that activity under Vicat, it also began producing papers for packaging, especially large-size Kraft-paper sacs for building materials such as the company's own concrete and cement products, as well as other products, including fertilizers and chemicals. The Vizille site eventually expanded its packaging production to some 80 million sacks per year.
Vicat simplified its name to Vicat SA in 1984 and once again began scouting for a foreign acquisition. The company returned to the United States in 1987, buying up the Lebec cement factory in Los Angeles, launching Vicat's National Cement Company of California subsidiary. The purchase strategically placed Vicat in what was by then the largest cement market in the United States. At the same time, Vicat's top French competitors, Lafarge and Ciments Française, had also entered the U.S. market. The three French groups combined to claim the leading share of a market that had come to be dominated at more than 75 percent by foreign interests.
Foreign Focus in the 2000s
Vicat added a new complementary business in 1989 when it purchased SATM, a specialist in transporting cement, concrete, and granulates for large-scale construction projects. SATM, founded in 1958, gave Vicat a network of ten branch offices throughout France.
In the 1990s, Vicat widened the scope of its international interests. The company first turned to Turkey, where it acquired Konya Cimento in 1991. The addition of that plant, located in Central Anatolia, boosted Vicat's total production past nine million tons. Vicat returned to Turkey in 1994, buying a majority stake in Bastas Baskent, the leading cement producer in the Ankara market. The company continued to broaden its Turkish operations, adding a ready-mix facility and sites in Karaman and Manavgat on the Mediterranean coast.
Vicat continued building its capacity in the United States, notably through the installation of a ready-mix plant in Alabama. This investment helped win the company a number of major contracts from the city of Atlanta as it prepared for the 1996 Olympic Games. The company next turned its attention to Senegal, where it acquired SOCOCIM in 1994. That company was not only the leader in the Senegalese market but also held a leading position supplying cement to neighboring markets. The company's investment and acquisitions helped it top 13 million tons per year by the mid-1990s.
Vicat's next major acquisition came in 2001, when it acquired Switzerland's Vigier. That company had been founded in 1871, in Luterbach, and later built a cement plant in Rechenette. The addition of Vigier also gave the company control of Créabéton Matériaux, with five factories producing a variety of prefabricated cement products such as cinder blocks, walls, and paving tiles. Vigier also helped raise Vicat's production capacity past 15 million tons that year.
In 2003, Vicat turned to Italy, where it acquired Cementi Centru Sud, then to Egypt, where it purchased the Sinai Cement Company. These purchases helped the company top 17 million tons that year. Vicat then returned to Switzerland, buying aggregates and concrete producer Biedermann in 2004. Also in that year, Vicat launched a new aggregates joint-venture in Senegal and built a new rock crushing facility there as well, launching operations in February 2004.
Back in France, Vicat expanded its domestic operations with the purchase of Matériaux SA, a leading aggregates producer in the Metz, Nancy, and Thionville regions, with operations reaching to Luxembourg as well. The addition of Matériaux's business boosted Vicat's aggregates production by another one million tons. By then, Vicat had clearly set its future growth prospects on its continued international expansion. As a pioneer in the world cement market, Vicat's future rested on a solid foundation.
Principal Subsidiaries: Annecy Béton Carrières; Atelier du Granier; Béton Travaux; Bétons Granulats du Centre; Builders Concrete (United States); Cementi Centro Sud Spa (Italy); Condensil; Kirkpatrick (United States); Matériaux Centre France; Monaco Béton; National Cement Company (United States); National Cement Company of California (United States); National Ready Mixed (United States); Sablières du Grésivaudan; Sigma Béton; United Ready Mixed (United States); Vicat; Vicat International Trading.
Principal Competitors: IFI; Lafarge S.A.; CRH plc; Cementos Apasco S.A. de C.V.; Taiheiyo Cement Corporation; Fomento de Construcciones y Contratas S.A.; HeidelbergCement AG; Grupo Ferrovial S.A.; Cemex S.A. de C.V.; Italmobiliare S.p.A.; Italcementi S.p.A.; CEMEX.
Further Reading:
- Homer, Eric, "Heavy: Cement Concern Vicat Sets up $400 million Via Credit Lyonnais," Private Placement Letter, July 28, 2003.
- "Vicat Clinches stake in Sinai," MEED Middle East Economic Digest, April 4, 2003, p. 16.
- "Vicat Acquires Swiss Cement Group Vigier," European Report, January 31, 2001.
Source: International Directory of Company Histories, Vol. 70. St. James Press, 2005.
