"Rock on" is more than a catchphrase -- it's a way of life for Texas Industries. The construction materials company, known as TXI, produces cement, aggregates, and consumer building products, including ready-mix concrete and other specialty aggregate products. The company also produces sand, gravel, crushed limestone, well cements, shale, clay, and cement-treated materials used in paving. Products are sold under the Spec Mix, Durmax, Envirocon, Terra Tone, and Proset brands. TXI's consumer products division serves construction customers, mainly in the southern and southwestern US. Texas Industries has more than 80 manufacturing facilities in Texas, California, and four other states.
Cement production accounts for nearly half of the company's sales and most of its operating profits. Its plants have an annual production capacity of approximately 6 million tons of cement, a figure which will go up to some 7.5 million tons once its Hunter, Texas, cement plant expansion is complete. However, the company hasn't been operating at full capacity for some time now, thanks to a lull in the construction sector during the economic downturn.
TXI has dealt with challenging times in its industry. The recession and post-recession economy, marked by declining home values, high unemployment, limited state spending, and less construction activity, led to financial losses for TXI. Sales dropped by more than 25% from 2009 to 2010 alone, and they've remained somewhat stagnant since then. In fiscal 2012 the company's revenues grew 4% to $647 million (still down from the more than $1 billion in reported revenues in 2008). In response to the declines, the company has focused on reducing costs and strengthening its capital holdings. TXI has cut its workforce and idled several plants since 2008. CEO Melvin Brekhus and other executives also chose to reduce their salaries. The efforts have been effective, as the company returned to profitability in fiscal 2012, netting $7.5 million after losing $64.9 million in 2011.
The company concentrates its efforts in the nation's most populous states, which also receive the most federal funding for highway construction. Expected population growth in these markets also serve as an indication that construction activity will grow over time. TXI's primary markets are Texas (where it is the largest producer of cement) and California. The company has strengthened its operations in those states by expanding plants to boost overall annual cement capacity.
The company further grew its operations in Central Texas with the 2011 acquisition of the ready-mix business of Transit Mix Concrete and Materials. The deal added more than 20 facilities in the area. Also that year, TXI swapped some assets with CEMEX USA in order to expand in Central Texas once again. TXI acquired three ready-mix concrete plants and one aggregate plant in Austin in that deal.
In 2012 TXI continued to reshape its business and sold its packaged products unit to Bonsal American (a subsidiary of OldCastle) for $46 million. The packaging business included five manufacturing facilities in Texas. As part of a long-term agreement with Bonsal, TXI will continue to produce and sell packaged cement and mansonry cements in Texas. Also that year the company sold an aggregate rail distribution terminal near Houston. – less