CRH to close Scottish brick subsidiary

THE CONSTRUCTION slowdown has forced Irish building materials giant CRH to close one of its manufacturing plants with the loss…

THE CONSTRUCTION slowdown has forced Irish building materials giant CRH to close one of its manufacturing plants with the loss of more than 50 jobs.

CRH confirmed to The Irish Timesyesterday that it intends closing one of its brick production plants in Glasgow, Scotland, as a result of falling demand.

A spokesman for the Dublin-headquartered group said yesterday that demand for bricks has been falling in the UK over the last few years.

"In the last year or so, Wienerberger, Hanson and a number of independent brick manufacturers have announced brick factory closures," he said.

READ MORE

"Ibstock Brick, CRH's UK brick operation, recently announced the proposed closure of one of its plants near Glasgow in Scotland."

The plant in question is located in Tannochside, about 10km (6.2 miles) to the southeast of Glasgow, and is part of the Leicestershire-based Ibstock group, which CRH bought in the late 1990s in a deal that made the Irish group the biggest brick manufacturer in Britain.

The spokesman could not say how many jobs would be lost as a result of the Scottish factory's closure. According to local sources, the number will be 54.

All the jobs lost will be in manufacturing.

Ibstock intends keeping a sales force based at its Tannochside facility.

The CRH board allows local management within its subsidiaries discretion to make decisions about job losses and redundancies within the individual businesses.

Earlier this year, CRH chief executive Liam O'Mahony acknowledged that, as the squeeze on construction continued around the globe, its operations faced the possibility of cutbacks and job losses.

However, he stressed that these decisions would be made by local management, and that there was no overall plan to cut jobs in its operations.

This week, one of CRH's British rivals, Hertfordshire-based Michelmersh, announced that it plans to cut jobs to combat the impact of falling demand on its bottom line.

That company pointed out that a number of its competitors, including CRH, were preparing to do the same.

CRH is one of the biggest players in its business in the world, with sales of about €20 billion a year.

Its operations are split roughly 50/50 between the US and Europe. Ireland and Britain account for 10 per cent of its overall business.

The increased cost of borrowing has left all building-related industries facing deteriorating trading conditions. Earlier this week, Davy stockbrokers analysts Flor O'Donoghue, Tim Cahill, Barry Dixon and Robert Gardiner cut earnings forecasts for a number of players in the sector, including Grafton, Kingspan and British operator Wolseley.

In Scotland, local politicians reacted angrily to news that Ibstock is shutting its Tannochside manufacturing plant.

Scottish National Party member of the Scottish parliament Alex Neil said the local authority, North Lanarkshire Council, should "take a large part of the responsibility" for the closure, as legal and planning restrictions were preventing Ibstock from managing the site efficiently.

Barry O'Halloran

Barry O'Halloran

Barry O’Halloran covers energy, construction, insolvency, and gaming and betting, among other areas