Ibstock investing £60 million to boost brick production at Aldridge sites

Clay bricks and concrete products group Ibstock is making a £60 million investment in production at its two sites in Aldridge as demand for building products soars with the UK recovery from the coronavirus pandemic stepping up.

 The investment at Aldridge will hugely increase Ibstock's clay bricks production
The investment at Aldridge will hugely increase Ibstock's clay bricks production

The Leicestershire-based group said that it will deliver annual 115 million brick capacity at its Ibstock Brick Atlas and Ibstock Brick Aldridge plants

The investment in Atlas at Stubbers Green Road and Aldridge at Brick Yard Road is expected to make a £12m annual contribution to profits once they are fully operational in 2024

The redeveloped Atlas plant is also expected to be the first net zero carbon brick manufacturing facility in the UK.

It is being funded from within the group which is seeing robust demand from both the new build housing and repairs, maintenance and improvement markets.

The group's annual general meeting heard that the 2021-2022 financial year had started well, with trading modestly ahead of expectations.

Sales volumes in the clay bricks division for the first quarter of the year were ahead of internal expectations, whilst concrete volumes for the quarter were in line.

The board says it is encouraged by this performance and, while remaining mindful of the economic uncertainties and disruption caused by Covid-19, remains confident for the year ahead.

Ibstock says that as the residential housing market recovers, domestic demand for clay bricks will continue to exceed that available from domestic manufacturing capacity.

Redevelop

Against this backdrop, the group is resuming the project to redevelop its Atlas site by replacing the existing mothballed facility with a new state-of-the-art wire cut, clay brick factory.

The Atlas project has been revised and expanded since the announcement of the original proposal in early 2020, with an increase in capacity and further significant enhancements to deliver improved environmental performance. The project also includes investment to upgrade and expand capacity at the adjacent Aldridge brick factory.

The new Atlas factory will have state-of-the-art technology, with significantly reduced process emissions, resulting in a major reduction in carbon

In total, the redeveloped facilities will deliver capacity of 115 million bricks per annum, equivalent to a net increase in Ibstock Clay's network capacity of 75 million bricks, after taking into account the existing capacity of the mothballed Atlas factory. Together, the Atlas and Aldridge factories will benefit from the existing strong transport infrastructure, and high quality clay reserves at the site.

The project, which is subject to final planning permission, is expected to begin in the second half of 2023.

Joe Hudson, chief executive of Ibstock, said: "We've made an encouraging start to 2021, supported by robust demand in both the new build housing and RMI markets."

"With the market outlook now clearer, we are refocusing on growth. Redevelopment of our wire cut brick facilities in the West Midlands will deliver a significant capacity expansion, further demonstrating our leadership in the clay brick market, which is expected to continue its long-term growth over time. The project is another tangible example of our commitment to the net zero carbon journey and provides a great exemplar of British building products manufacturing.

"We have a number of additional organic investment opportunities under evaluation and expect to update shareholders on these as the year progresses."

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