Unsupported browser

For a better experience please update your browser to its latest version.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

Brick maker moots temporary closure of two plants

  • Comment

Brick producer Forterra is considering mothballing two plants due to ‘economic uncertainty’, despite stating its profits are continuing as expected 

The Northampton-based company said it was looking to temporarily close its brick plants in Accrington and Claughton, Lancashire.

However, the manufacturer did not mention explicitly whether the review of its current production was related to the UK’s decision to leave the EU.

Forterra said that in the six-month trading period up until the end of June, its profits were as anticipated. 

The manufacturer added that it still generated a strong operating cash flow and, while having a net debt of £20 million, this exceeded expectations.

In a statement, Forterra said the move was being considered because of ‘current economic uncertainty and sufficient brick inventory levels’.

It added that the action would allow the company to ‘continue to meet customers’ needs’ and manage costs until it can ‘more effectively forecast demand’.

Forterra runs nine brick manufacturing facilities in the UK with a total production capacity of around 570 million bricks per year.

Yesterday lunchtime, shares in Forterra were down 6.8 per cent to 120p.

Andrew Eagles, chief executive of the Brick Development Association, said: ’There is uncertainty at senior government levels around post-Brexit and leadership of both political parties and that’s causing a bit of uncertainty in terms of construction. 

’There’s less certainty in terms of brick numbers for the upcoming couple of months. Those factories can be bought back relatively quickly, so what they’re [Forterra] moving to do is to utilise the more efficient plants where they can expand production when they need to.’

Eagles also noted that the development must also be taken in the context of the latest ONS statistics, which were released this morning.

The statistics show that there was a 3.1 per cent increase in brick deliveries in May 2016 compared to May 2015.

He added: ’What you’ve got is a small blip where Forterra are looking to manage that by mothballing those factories and that is unfortunate.

’But in the longer term, it can scale up with the more efficient factories and then in the medium term you’ve still growth and interest from local government for getting more homes built.’

However, according to separate government statistics, brick production for all types was down for the first three months of 2016 compared to the same quarter last year. 

Brick production

 2015  Brick production in millions (all types)
 January    140
 February    151
 March    173
 April     162
 2016  Brick production in millions (all types)
 January    130
 February    157
 March    167
 April    166

 

  • Comment

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions.

Links may be included in your comments but HTML is not permitted.

Related Jobs

AJ Jobs