May 26, 2012 Concrete-Solid Enterprise

Volume 15 | Issue 2

100-year-old St. Marys Cement has made major construction contributions to the great lakes region, supplying cementitious materials, concret

In 2012, St. Marys Cement (SMC) will be celebrating its 100th year in business with several local celebrations. Founded in 1912 by entrepreneurs John G. Lind and Alfred Rogers, the Toronto-based company evolved into a leading manufacturer of cement and related construction products, now serving customers in Canada and the United States.

The centennial anniversary accompanies the company’s new efforts to reduce its carbon footprint via product and processes. One example involves eliminating undesirable CO2 output via something that has existed from our planet’s beginnings: algae. Expect nothing less from a company that has demonstrated continuous development through 10 decades.

QUICK RESPONDER
Headquartered in Toronto, SMC began in the town of St. Marys, Ontario in the early 20th century when horse-drawn carriages still transported cement. Operations, of course, became far more sophisticated. Today, distribution is accomplished in the Great Lakes Region via a large terminal network (comprised of barge, rail and truck service). Further, SMC established strategically located manufacturing plants catering to markets by manufacturing products (e.g., cementitious materials, ready-mixed concrete and aggregate) that foster quick reaction to marketplace circumstances, reveals Bill Asselstine, vice president of promotions and marketing.

Helping to explain SMC’s century-old longevity, Asselstine describes another advantage: “Our parent company – Votorantim Cimentos – enabled us to become a leaner and more effective organization, which placed us in good market position. Even with the recent economic downturn, we’ve remained competitive.”

THREE-PART EVOLUTION
SMC’s success results from a three-stage evolution, relates Asselstine. The story begins in the late 19th century and the early 20th century in Ontario, where there was a booming regional economy. “Economic growth outdistanced infrastructure growth, so that problem translated into the construction of roads, dams and railways,” he says. “In turn, this translated into a burgeoning cement market.”

So, Lind saw gold “in them thar hills,” and the investment was far more profitable than a possible Alaskan gold strike or finding a “treasure” in the Sierra Madres. Lind – a former Klondike prospector – danced on the gold-shining ground that others overlooked. His previous activities garnered him a respectable financial trove that enabled him to gain entrance into the construction market.

Subsequently, Lind teamed with Rogers and they made SMC a strong regional player (Rogers owned building supply interests in Toronto). The partners led investors into creating St. Marys Cement Company in 1912. By the end of World War II, the company tripled in size – thanks to the addition of kilns and main-plant expansion. Also, around this time, the company associated itself with Hutton Transport, an Ontario-based bulk and bag cement trucking business.

In the 1960s and 1970s, the industry witnessed a great deal of vertical integration due to competitive pressures. During this era, SMC eventually acquired Hutton Transport, which even today hauls much of the company’s cement products. SMC also became involved in the precast market (via Precon, a major player in that market) and it integrated into the concrete pipe and manhole market through Waterloo Concrete. Also in this period, SMC acquired Hancock Sand and Gravel, which moved the enterprise into aggregrates, which would become a hugely important part of the business.

In the late 1960s, SMC built a new cement plant east of Toronto, on Lake Ontario at Bowmanville. In 1975, it responded to new competition by building a new cement plant adjacent to the original plant in the town of St. Marys. As the Ontario market matured the company looked south of the border for further expansion opportunities and “This led to SMC’s second stage of development,” says Asselstine.

EXPANSION INTO THE UNITED STATES
With a strategy of concentrating assets within the Great Lakes Basin, St. Marys purchased the Wyandotte Cement Company in Detroit, Mich. in 1979, which was soon followed by a terminal in Buffalo, N.Y. In 1982, the company acquired terminals in Wisconsin (Green Bay, Milwaukee, Madison), which gave it a strong presence on Lake Michigan, and terminals in South Beloit and Waukegan, which gained it entry into the Chicago market. Two years later, the company acquired the Peerless Cement plant in Detroit, which provided much-needed clinker capacity as markets ramped up in the decade. In 1993, SMC entered Ohio, with the completion of a Cleveland terminal. All of this activity more than doubled company sales. In turn, growth demanded expansion of shipping infrastructure and production. The new Bowmanville dock served as a major port between Toronto and Montreal and its barge fleet transported both clinker and cement to new US markets.

With new and growing cement markets, the company undertook the largest and most expensive capital project at that point in its history: the Bowmanville expansion, which involved the installation of a modern dry process precalciner single kiln operation that more than doubled capacity to 1.8 million tons. At the time, it was the largest and most efficient single kiln operation in North America. However, St. Marys also confronted challenges. In the 1990s, it endured a deep, three-year construction recession.

“That was a factor that eventually brought us into our third, and current, evolution stage,” says Asselstine.

ENTERING THE GLOBAL MARKET
By 1997, St. Marys was the third largest cement producer in Eastern Canada. That year, it was sold to Blue Circle Industries, a major integrated global player. But that British-based company was appealing to other multi-national cement companies and was ultimately purchased by the French-based Lafarge in 2001. Under various regulatory mandates Lafarge was required to divest itself of most of the St. Mary assets (although Lafarge kept some of the precast and aggregate assets). “Essentially, regulations said that Lefarge couldn’t own such assets. They needed to be sold to another party,” says Asselstine. “This led to a bidding process that involved several companies.”

In July 2001, Votorantim Cimentos, a private Brazilian company based in Sao Paulo, came out on top in the bidding process. Votorantim is the largest manufacturer of cement in Brazil and one of the world’s 10-largest cement producers, through its cement division (Votorantim Cimentos Ltda). At last count, it operates 25 plants. After winning the bid, Votorantim proceeded to upgrade its North American production assets and explored further growth opportunities. By 2003, it had forged a joint venture in Florida, the Suwannee American Cement Company, which was an 800,000 ton, single-kiln facility. That same year, SMC bought the Badger Cement Company, a small grinding operation in Milwaukee. Additionally, it acquired various concrete companies in Florida to complement Suwannee.

In the spring of 2005, SMC grew more when it bought assets from Cemex. The Charlevoix and Dixon cement plants added about two million tons of capacity, complemented by a number of terminals and marine assets. This proved a very important development, as it enhanced the company’s strength on the western side of the Great Lakes Basin and balanced production with markets in SMC’s trading area. “It also solidified our position in the Great Lakes as a major supplier.”

In recent years, the company has continued to grow through vertical integration, as it acquired two large privately held US companies. “In 2007, we bought Prestige Ready Mix in Florida. A year later, we acquired Prairie Ready Mix, a large producer based in Chicago,” reports Asselstine.

NEW CHAPTER: ENVIRONMENTAL STEWARDSHIP
Now, St. Marys is well positioned to move into its second hundred years, and that leads to 2009 and the company’s concern about its carbon footprint – and the latest chapter of its narrative, where technology and processes are helping transform typically grey cement into “green.”

That year, SMC partnered with Pond Biofuels to start work on the first-ever process to convert carbon dioxide (which is release into the atmosphere during the cement production process) into something useable.

As the company describes, the process mimics what took place during Earth’s dawn, when volcanoes erupted, sending gases up from the planet’s core (mostly carbon dioxide) and into the sky. Through photosynthesis, algae captured the CO2 and converted it into more algae and even into oxygen and nitrogen.

Centuries later, the process – creatively harnessed by innovative industrial entities – transforms waste into a useable form of energy. “You can process the algae to convert it into oil and then use it for fuel, which can be utilized in the plant’s kiln,” says Asselstine. “You can also process it into biofuels that can energize a company’s truck fleet or contribute to the manufacture of products. In this way, we transform CO2 from a liability into a commodity.”

Indeed SMC, in its relationship with Pond Biofuels transformed this revolutionary concept into reality. It began as a pilot program, and the success points to full-scale usage. “What was once theory turned out to be industrial capability,” comments Asselstine. “Pond Biofuels moved beyond the experimental stage, and we are moving with the company, into our next phase.”

This next phase – or new chapter – involves an increasing, broad-based environmental commitment. The company is now using a new category of cement called Contempra™ that was specifically engineered for sustainability. Usage in concrete manufacture decreases CO2 emissions by 10 per cent, according to the company. The company introduced it through the Cement Association of Canada (CAC). It’s still Portland cement (the most common type of cement in general use) and quality isn’t compromised at all. “The concrete demonstrates the same level of strength and durability,” Asselstine points out.

He adds: “Concrete is an inherently environmentally friendly building material, but the production of cement produces CO2, so the challenge for manufacturers is to minimize any environmental impact.”

When adopted for all suitable concrete applications, Contempra could reduce Canada’s greenhouse gas emissions by as much as 900,000 tons a year, anticipates CAC. The company is confident this will happen. “It has been used in Europe for about 25 years, so it has a track record of success,” says Asselstine.

MOVING FORWARD
This sustainable direction indicates the company’s forward push (SMC’s Bowmanville Cement plant is the first facilities of any kind in North America to become ISO 50001 certified, which is the new energy management standard). “But we also plan to keep on growing, as we see a lot more opportunity in North America,” says Asselstine. “Right now, the global economic environment is not the greatest, and growth is somewhat stalled. But the economy is going to improve. It will improve. And we have already positioned ourselves to experience renewed growth when it turns around.”

Consider that observation set in stone – or concrete.

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