A building materials firm that is being forced to sell one of its Aberdeenshire asphalt plants is plotting a quick return to the quarry where the facility is based.
Following a long-running inquiry the UK’s new anti-monopoly watchdog in April ordered Derby-based Breedon Aggregates to sell one of its two plants near Aberdeen to make room in the market for a competitor and protect customer interests.
The Competition and Markets Authority (CMA) made the decision in the wake of Breedon’s £34million acquisition of Aggregate Industries UK’s Scottish assets, including 11 quarries and four asphalt plants.
The firm – which describes itself as the largest independent aggregates business in the UK and employs 1,250 people – opted to keep the asphalt plant at Craigenlow in Dunecht and offload the one at Tom’s Forest in Kintore.
Breedon is still operating the Kintore facility, though a company spokesman told the Press & Journal he expects its sale to be concluded in the near future.
The company is not in the mood to turn its back on Kintore for long, however.
Breedon has submitted a planning application to the authorities for a new plant on the exact same site, and preliminary consultations are already under way, its spokesman said.
CMA yesterday said it fully expected the firm to compete against the plant it is forced to sell, but acknowledged concerns that a new competitor could face difficulties establishing itself in the market with Breedon still in the picture.
CMA, which is monitoring the plant’s sale, considered whether it should bar Breedon from opening a new facility at Tom’s Forest, but has so far refrained.
The watchdog said the need for restrictive measures was typically a matter to be decided by the negotiating parties.
Furthermore, CMA is wary of adopting such clauses as they restrict competition, instead of encouraging it.
However, if a potential buyer does demand that Breedon be prevented from returning to Tom’s Forest for a period of up to a year, the agency can insert a clause to that effect into the agreement.
Breedon’s spokesman said the sale will leave the company with just one plant in Aberdeenshire, which he described as a busy market.
And with the £745million Aberdeen Western Peripheral Route in the pipeline, he said now is the “right time to invest in additional capacity in the market.”
The planned Tom’s Forest facility would be “comparable in size with Breedon’s existing plants” and would create 15 to 20 new jobs, he said.
He added that it was standard industry practice for companies to have a primary plant and a backup one, and that there would be “nothing to prevent a competitor opening a plant in the same area.”
Breedon reported underlying pre-tax profits up 77% at £9.4million during the first half of 2014, with revenue 25% ahead of a year earlier at £125.2million.