Mexican company buys Tulsa concrete business Hardesty Co. assets acquired in $271 million deal

An industrywide wave of consolidation came to Tulsa this week as a Mexican company said it will buy the parent company of Mid-Continent Concrete Co. in a $271 million deal.

Grupo Cementos de Chihuahua SA said it will close on the deal for The Hardesty Co. and its subsidiaries Monday.

Mid-Continent operates 30 ready mix plants and a fleet of 250 mixer trucks in northeast Oklahoma and northwest Arkansas. Included in the transaction is Alliance Transportation Inc., which operates 87 trucks to haul raw materials.

Executives said Mid-Continent's managers will continue to operate the Tulsa company as a subsidiary of GCC. Mid-Continent has about 500 employees across its operations. Owner Roger Hardesty was out of the office Thursday and unavailable for comment.

"It's a very positive change, said Jack Petreikis, Mid-Continent's executive vice president. "Mr. Hardesty has been in business for a long time, and it's just his decision to move on to something else.

"We obviously have mixed emotions. We don't want to lose Roger, but we're very excited about the new company. It's a win-win situation.

Manuel Milan, GCC's chief executive officer, said in a statement that Mid-Continent had $117 million in sales in 2005.

"The acquisition of Mid-Continent significantly expands GCC's footprint in the U.S., Milan said. "This transaction reflects GCC's ongoing strategy of investing in growth, and will allow us to leverage the strong continued demand forecasted in the construction market.

Earlier this year, GCC bought four ready-mix concrete companies in South Dakota and Minnesota. Those companies had $30 million in revenue last year, with 14 ready-mix plants and 100 trucks.

In first quarter earnings released April 19, GCC said it expects future savings from lower tariffs on Mexican cement. The Mexican and U.S. governments agreed in March to lower the tariff to $3 per ton from $26 per ton of cement imported into the U.S. The tariffs will be removed completely by 2009.

Mike Tyler, executive director of the Oklahoma Ready Mix Concrete Association, said rebuilding efforts from Hurricane Katrina have caused concrete demand to outstrip supply. Added to that are massive public works projects in China that are diverting the flow of cement, a key ingredient in concrete.

"The demand is unreal, Tyler said.

Despite that, concrete prices haven't risen as fast as other building components such as steel and lumber, he said.

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