Five days after the denial of key New York Department of State (DOS) certification, the board of directors of Holcim Group's St. Lawrence Cement, based in Quebec, abandoned plans to build a new 2 million-mtpy-capacity cement plant in Greenport, N.Y, a project that would have tripled the company's annual capacity.

When St. Lawrence originally embarked on the permitting process for the $353 million Greenport facility on 2,000 acres close to the Hudson River, the intent was to replace its nearby Catskill, N.Y., plant and to secure additional capacity to replace offshore imports. Lacking DOS certification for a Greenport facility, however, the company announced in late April that it would continue to produce and distribute product for the New York market from its 730,000-mtpy, wet-process Catskill plant, about 100 miles north of New York City. The company will record a post-tax write-off of about US$29.6 million to be reported in the second quarter of 2005.

Altogether, 17 federal, state, and local permits and approvals were needed before construction could begin. In the documentation process, the New York State DOS certification was a prerequisite to qualifying for other approvals. On April 17, St. Lawrence received a negative determination from the DOS, which ruled that the proposed plant was inconsistent with the state's Coastal Zone Policies. Despite the company's extraordinary efforts to find new ways to reduce emissions, the project's proposed configuration, size, and location were deemed incompatible with the state's policies for coastal areas.

Deciding not to appeal the DOS decision, St. Lawrence withdrew. “I wish to thank our supporters for their continuous encouragement in this undertaking and our employees who dedicated their efforts to move this project forward,” said Philippe Arto, president and CEO of St. Lawrence.

Arto added that in light of the decision and in the context of a cement shortage seen in many states currently, the company would redistribute some of the funds earmarked for Greenport to reinforce supply lines, including a new US$10 million investment program at the Catskill facility. “We will also strengthen our network of distribution terminals and our long-term contracts with Holcim Trading to secure sufficient imported cement to meet needs in excess of domestic production in the region,” he said.

Ignoring the positive economic impact for the region with vital cement jobs for decades to come, more than 1,500 construction jobs, and at least $800,000 in local tax revenue once operational, local environmental and community watch groups — led by the 4,100-member Friends of Hudson — drew battle lines of protest against the plant's construction since plans were announced. A statement released by FOH Executive Director Sam Pratt after St. Lawrence gave notice of its withdrawal from Greenport emphasized that the fight is not over. “Residents downwind of the Catskill plant can count on opponents to take as much interest in Catskill as we have in Greenport,” he said.

Like many cement companies attempting to significantly expand existing plants or build greenfield operations, Holcim operations have had their share of run-ins with environmentally minded organizations in recent years. In 2002, the U.S. Supreme Court declined to review a decision of the Third Circuit Court of Appeals finding that the New Jersey Department of Environmental Protection did not violate the Civil Rights Act by permitting a St. Lawrence-operated slag grinding plant to open in Camden. A citizen's group had sued the state for granting an operating permit to the plant, claiming that the environmental impact of the operation would result in a disparate impact on the predominantly black residents of Camden.

Originally, a U.S. district court judge found that NJDEP had violated the Civil Rights Act and prevented the plant from opening on the eve of its startup, although St. Lawrence was never accused of any violations.

In October 2004, Holcim (US) Inc. and several environmental groups reached an agreement that resulted in the dismissal of all pending litigation and administrative actions previously filed against the company's efforts to build a greenfield plant in Ste. Genevieve County, Mo. This agreement has accelerated the construction schedule for the $600 million Ste. Genevieve project, set to break ground later this year.

TXI to expand in California

Dallas-based Texas Industries Inc. said recently it will expand and upgrade its cement plant in Oro Grande, Calif. The two-year southern California facility renovation will increase the plant's capacity 75%, adding 2.3 million tons of new capacity, making TXI the nation's fifth-largest cement producer. When the expansion is completed, 1.3 million tons of current production will be retired. The work will increase TXI's total annual cement capacity to about 6 million tons.

CEMENT TOTALS

Total shipments of portland and blended cement in the U.S. and Puerto Rico were about 6.8 million mt in January 2005, according to the U.S. Geological Survey. This constitutes a 6.4% increase compared with January 2004 shipments.

Clinker production totaled 6.5 million mt in January 2005, a 3.8% increase compared with 2004. Masonry cement shipments were 340,000 mt in January 2005, a 4.2% increase compared with shipments in January 2004.

JANUARY 2005