Demand for bricks makes brick giant consider turning on kilns

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Brick giant Forterra formerly known as Hanson Building Products is keeping a close eye on brick demand and could turn its mothballed plants back on “in a matter of weeks.”

The firm mothballed two plants in Lancashire in July as demand could be met by existing stock and other production sites.

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The kilns at Accrington and Claughton are also being upgraded while the board keeps monitoring industry demand.

Sales volumes this summer are ahead of last year and Forterra said: “There are signs that the excess inventory being carried by merchants is being worked through the supply chain and we anticipate that this will continue through to the end of the year.

With the inventory on hand, the high capacity utilisation of the other kilns and our demonstrated ability to relight the cold kilns in a matter of weeks if required, we remain confident of our ability to meet market needs whilst operating efficiently.”

Results for the six months to June 30 showed revenue and pre-tax profits roughly flat at £146m and £13m respectively.

Stephen Harrison, Chief Executive Officer, said: “We aim to continue to capitalise on the attractive fundamentals in the UK housing industry and to grow our business in the medium term by utilising our existing, well-invested manufacturing facilities, available production capacity and inventories.

“Although there remains a degree of uncertainty through to the end of the year, trading in the first two months of the second half has been in line with our expectations, with brick volumes in both July and August ahead of the corresponding period for 2015. 

“We will continue to be proactive and agile when dealing with any changes in market circumstances.

“The Group’s leading positions in both clay bricks and concrete blocks, offering the broadest range of manufactured masonry products, place it in a strong position to benefit from attractive market fundamentals.

“With sound management of the cost base, ability to increase incremental capacity through low-cost projects and strong cash generation, the Board remains confident that Forterra’s strategy will drive value for shareholders.”