Redland merger creates new giant

REDLAND, the world's second largest producer of clay bricks, is merging its Benelux brick-making activities with those of Van Biervliet, a private Belgian company, to create Europe's largest brick maker.

The merger is the latest stage in a rationalisation of the European industry following the creation in 1992 of Redland-Koramic, itself the market leader in the Netherlands and Germany.

A spokesman for Redland said the restructuring of the European brick industry differed from the earlier rationalisation of the British industry, which had been caused by overcapacity and rapidly falling prices.

He said that, after cuts in capacity in Belgium and the Netherlands, all Redland plants were working flat out. The combined group will have 25 plants producing more than one billion bricks a year.

In 1992, Redland staged a pounds 640m bid for Steetley after joint venture talks between Steetley and Tarmac broke down. The talks had been in response to falls in brick prices of up to 50 per cent since the peak of the market in 1989 and a widely accepted need to cut capacity.

Ibstock Johnsen, Britain's third largest producer after Redland and Hanson, said earlier this week that prices had stopped falling but were likely to rise only 2 or 3 per cent this year.

The enlarged joint venture, which will have sales of about pounds 135m, is expected to float on the Belgian stock market in June. The proceeds will fund expansion.

Redland will have a 35 per cent stake in the new company compared with 42 per cent after the merger takes effect.