Eagle Materials Banking on Cement Manufacturing Expansion Growth Trend

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Researched by Industrial Info Resources (Sugar Land, Texas). Eagle Materials, Incorporated (NYSE:EXP)(Dallas, Texas) has been on a much needed cement manufacturing expansion binge as of late. Starting with subsidiary Illinois Cement Company (La Salle, Illinois), the company is marching toward expanding its cement manufacturing capacity by 50%, from 2.65 million tons per year to 4 million tons per year by late 2008.

At La Salle, Illinois, the company is currently constructing a $65 million, 430,000-ton per year expansion, which includes an 80,000-ton storage dome. Construction of the dome has been completed, and the remainder of the plant expansion is scheduled to be completed when tie-ins are made during a plant shutdown in December 2006. Humboldt Wedag, Incorporated (Norcross, Georgia) is the equipment vendor on the project. Industrial Info has been tracking this project since its infancy as a preheater expansion in 1999.

Earlier this year, the company announced plans to expand cement plants in Laramie, Wyoming and Fernley, Nevada to the tune of $320 million. At Laramie, a new kiln line will replace two aging dry process lines currently in operation, doubling production capacity up to 1.1 million tons per year. Mountain Cement, the Eagle Materials subsidiary that runs Laramie, has been under fire as environmental groups litigate to force it to install a new baghouse on kiln no. 2, replacing the existing electrostatic precipitator. The expansion project, which will include a baghouse on the new kiln line, will replace this project.

At Fernley, a new kiln line will replace two existing lines increasing capacity by 60%, up to around 1.1 million tons per year.

Eagle Materials owns 50% of a fourth cement manufacturing plant in Buda, Texas. Texas Lehigh Cement Company has a capacity of 1.2 million tons per year. Lehigh Cement owns the other 50%.

Eagle Materials was created in January 2004 as a spin-off of Centex Corporation.

Another construction products-related business of Eagle Materials is also involved in expansion. The company’s gypsum wallboard manufacturing plants are looking at expansion as well. For details see related April 17, 2006 news article - Next Round of New Gypsum Wallboard Manufacturing Plant Construction Begins in the Carolinas.

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