Western Railroad Discussion > RMC Lonestar to sell Davenport

The plot thickens on the Santa Cruz Branch…

–––

December 14, 2004

Davenport cement plant likely to get new owner
By JONDI GUMZ
Sentinel staff writer

DAVENPORT — Local residents are wondering what changes might result if a corporate giant based in Mexico buys Britain’s RMC Group, which owns the cement plant on Highway 1.

The $5.8 billion deal, slated to close Jan. 12, was approved Thursday by the European Union Commission, which saw no blocks to competition, but the U.S. Federal Trade Commission has yet to clear the acquisition.

"Hopefully we can get clearance in the next few days," said Eric Woodhouse, president of RMC Pacific Materials, based in Pleasanton.

Cemex, the world’s third-biggest cement-maker, announced the agreement with RMC, the world’s largest supplier of ready-mixed concrete, on Sept. 27.

The cement plant, which dates to 1906, is the largest employer in Davenport, with some 140 workers.

RMC has been a generous supporter of the local public school, Pacific Elementary, donating $15,000 a year to keep music instruction alive for 90-some students.

When the school encounters a major maintenance problem, Principal Sharon Smith calls the plant for help. In exchange, the school invites employees to a Thanksgiving dinner.

"We’ve had a nice relationship," Smith said. "I hope it continues."

The company’s relationship with nearby Bonny Doon, where RMC owns a limestone quarry, has been rockier. Don Coyne, president of the Rural Bonny Doon Association, describes it as "an uneasy truce."

RMC has made donations to Bonny Doon Elementary School, but the company’s environmental track record is mixed. The firm agreed to pay a $100,000 fine when 360,000 gallons of dirty water was spilled into Zayante Creek in 2001, harming fish habitat.

Cemex touts its commitment to sustainability on its Web site, but Coyne said the company has been fined by the state of Colorado for environmental violations at its plant near Boulder. When Cemex proposed to burn tires as fuel at that plant, the Sierra Club sued to stall the project.

"RMC wanted to burn tires at the plant in Davenport and that was defeated," Coyne said.

Residents also noted Cemex is familiar with the federal Bureau of Land Management, which is slated to take over an inland portion of the 7,0000-acre Coast Dairies property surrounding Davenport.

The BLM had awarded sand and gravel contracts to Cemex for federal land in Los Angeles County, prompting a lawsuit by county officials. When a settlement was reached May 20 allowing mining, the city of Santa Clarita appealed a month later. The 9th Circuit Court of Appeals has yet to rule in that case, according to BLM spokeswoman Jan Bedrosian.

Both RMC and Cemex are huge companies, Cemex with 26,000 employees in more than 30 countries and RMC with 29,000 workers in 22 countries.

Cemex faces competition from a French company, Lafarge, the world’s largest cement-maker, and a Swiss firm, Holcim, ranked second.

Woodhouse, the RMC Pacific Materials president, said technical staff from Cemex had visited the Davenport plant a few weeks ago but had no substantive discussions about future plans because of U.S. anti-trust regulations.

The plant is the biggest customer of the Union Pacific rail line in Santa Cruz County, shipping in coal for fuel and shipping out cement.

Woodhouse has been trying to confirm coal contracts for the coming year. Coal prices have risen "dramatically" in the United States, he said, but there are no current plans for a change in fuel, which would require the approval of the county supervisors.

RMC stockholders overwhelmingly approved the acquisition by Cemex in mid-November.

"They made a very good offer, a 40 percent premium over the stock price, so shareholders decided to sell," Woodhouse said.

Contact Jondi Gumz at jgumz@santacruzsentinel.com.

From the article, it sounds like Cemex is buying all of RMC, not just the plant in Davenport (i.e. Cemex and RMC are merging). Soon enough, the Cemex name will be "mud," as lifelong RMC fans chase down the last unpatched mixers...

Who needs the railroad--Cemex could always resume shipping by sea. Still visible in Davenport are the concrete supports for a steel pier, abandoned decades ago, supporting a conveyor for loading ocean vessels with cement completed in 1934 by Santa Cruz Portland Cement. They even had their own vessel--the SS Santacruzcement--for serving terminals in Los Angeles and Portland, OR. That'll teach SP.....

---

Gee Bob, you ever heard of the county taliban and coastal commission? They'd never allow a pier. This is their chance to kill Davenport off once and for all…