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Strong, low cost position. Eagle Materials’ four cement plants in Illinois, Nevada, Texas and Wyoming have a rated annual capacity of
nearly 3.1 million tons per year (our Texas plant is operated through a 50/50 joint venture). We expect fiscal 2008
(ending March 31, 2008) to be our 22nd consecutive “sold-out” year.
Our low cost position allows Eagle to have an operating margin that is
currently greater than 20%.
During fiscal 2007, we
completed construction of a major modernization and expansion of our
Illinois Cement plant. We could not be more pleased with the
outcome and effort of all parties involved – Eagle Materials
construction and engineering management, general contractors, equipment
suppliers, design engineers and training consultants. Careful planning
and execution by all resulted in a safe, fast transition from a 1970’s
vintage operation into a very sophisticated, technically complex
operation steadily producing above design capacity. The expansion
project at Illinois Cement increased our annual cement capacity by
approximately 430,000 tons to nearly 3.1 million tons.
We also made considerable
progress during fiscal 2007 in design, engineering and permitting for
the expansion and modernization of our Nevada and Mountain Cement
plants. Permits are anticipated to be received during the first half of
fiscal 2008 with construction to commence soon thereafter. Combined,
the two plants are expected to add nearly 1 million tons of cement
production capacity to our existing production capacity. In both of
these markets, we have been selling low-margin imported cement in
advance of the expansions to minimize the impact to our markets.
Once these modernization
and expansion projects are completed, we will have a truly outstanding
portfolio of cement assets with approximately 4.0 million tons of annual
cement production capacity. All four of our cement plants will be
extremely energy efficient and will be appropriately sized for the
markets in which they compete. |