3008 Monticello Boulevard
Cleveland Heights, Ohio 44118
Fax: (216) 371-2912
Incorporated: 1892 as Sandusky Portland Cement
Sales: $376 million (1997)
Stock Exchanges: New York
Ticker Symbol: MSA
SICs: 3421 Cement, Hydraulic; 1423 Crushed & Broken Granite
Medusa Corporation is one of the oldest cement companies in the United States, having been in business for over a century. The company is engaged in the production and marketing of Portland and masonry cements; mining, processing, and marketing construction aggregates, lawn & garden, and industrial limestone products; and providing construction services for highway safety. Its operations are principally in the eastern half of the United States, with strong market positions in the Great Lakes and Southeast regions.
The company can trace its origins to the founding of Sandusky Portland Cement Company of West Virginia in 1892 by Spencer Newberry and Arthur St. John Newberry. The first cement plant was built at Bay Bridge, Ohio, that year. A second facility was built at Syracuse, Indiana, in 1901, but was later abandoned in 1920. The name was changed to Sandusky Portland Cement Company of Ohio. In 1907, the company opened a plant in Dixon, Illinois, and constructed a white cement plant at York, Pennsylvania. The company was reincorporated in Ohio in 1916 as Sandusky Cement Co. Founders Arthur and Spencer Newberry died in 1912 and 1922, respectively.
In 1924, the company introduced waterproof nonstaining white cement. New white and gray cement plants were erected at York, Pennsylvania. The company changed names again in April 1929 to Medusa Portland Cement Company. Later that same year, the company acquired Crescent Portland Cement Company in Wampum, Pennsylvania, and Manitowoc Portland Cement and merged with Newaygo Portland Cement Company in September.
In 1938, the company opened a white cement grinding plant in Paris, Ontario, Canada. The western extension of the Pennsylvania Turnpike and the Ohio Turnpike were built with Medusa cement around that time.
Diversification During the 1960s and 1970s
In the mid-1960s, the company committed to build its first greenfield cement plant in four decades and the Charlevoix plant came on-line in 1967. A diversification effort also began in the mid-1960s with several aggregate acquisitions. In September 1966, the company acquired Western Indiana Aggregate Corporation in a stock swap. June of the following year saw the company acquiring Lehigh Stone Company for stock and approximately $121,000 in cash. In June 1968, the company acquired Raid Quarries Corporation in a stock swap. The company acquired The James H. Drew Corporation, based in Indianapolis, Indiana, in a stock swap in April 1970. June 1970 saw the company buying New Hudson Sand & Gravel Inc. In July, the company swapped stock for Bowling Green, Kentucky-based McLellan Stone Company Inc. and paid $425,000 for that company’s affiliated McLellan Construction Company Inc. In April 1971, the company acquired Wanatah Trucking Company Inc. in a stock swap. May saw the company acquiring State Contracting and Stone Company Inc. in another stock swap.
Although most of Medusa’s acquisitions in the 1960s and 1970s fell outside the cement industry, the Penn Dixie Cement Plant in Clinchfield, Georgia plant was purchased in 1971, marking the company’s first move outside its primary marketing area in the Great Lakes region of the United States. The plant was in poor condition and the company spent $13 million renovating and modernizing the facility. In February 1972, the company acquired Marion Brick Corporation in a stock swap. By the end of March 1972, fully one-third of Medusa Portland’s business was in non-cement products. In light of this diversification, the company changed its name to Medusa Corporation.
In January 1974, the company acquired Davis-Snyder Companies, Holston River Quarry, and Holston River Paving Company, and in June acquired Salem Stone Company. That same year, Medusa also acquired Thomasville Stone and Lime Company. In March 1975 the company swapped stock to assume certain liabilities of Woodbridge Clay Products. In May 1977, the company acquired Miller Bros. Company and Geohegan & Mathis Inc. for stock and in June 1977, the company paid approximately $10 million in cash for substantially all the assets of MCQ Inc.
The Crane Years, 1979-88
A takeover battle for Medusa began in 1977, with companies like Moore-McCormack Resources, Ogleby Norton, and Kaiser Cement and Gypsum seeking to purchase the company. It ended in January 1979 with the company’s acquisition by Crane Company. Thomas M. Evans, Crane’s CEO, completed the modernization and expansion of the Charlevoix plant in December of that same year and took a series of aggressive steps to downsize the company and generate cash. June 1978 saw the sale of Marion Brick for $9 million, a nice profit on the less than 200,000 share stock swap the company made in 1972 to acquire it. In 1979, the Manitowoc cement plant was closed and the Toledo, Ohio cement plant was sold. The Dixon, Illinois cement plant was sold in 1980, together with several aggregate operations. In 1981, the York, Pennsylvania gray cement plant was closed and the York white cement plant was sold the following year.
By 1984, the year Robert S. Evans replaced his father as CEO of Crane, Medusa was a smaller and leaner company that was ready to build on its strengths. Over the next five years, major investments were made to upgrade the Charlevoix, Clinchfield, and Wampum plants. In addition, efforts were made to improve the distribution capability from Charlevoix, including new terminals in Toledo and Owens Sound, Ontario, Canada. By the late 1980s, Medusa had become the low-cost producer of cement and aggregate in most of its major markets.
In an effort to maximize Medusa’s value to Crane’s shareholders, Medusa was spun off from Crane in October 1988. Immediately prior to the spinoff, Medusa paid an $84.3 million dividend to Crane using borrowed funds, eliminating all but approximately $131,000 of equity from its balance sheet. Crane’s shareholders received $6.88 per share in Medusa’s stock, tax-free.
A New Start, Late 1980s-90s
From internally generated cash flow, Medusa reduced the borrowings from the Crane dividend substantially over the next few years. The company had emerged from the Crane years with a lean organization, a tradition of strict financial controls, and excellent operating assets. In May 1990, the company acquired the operating assets and mineral reserves of three aggregate operations in western Pennsylvania for $7.7 million.
With debt down to comfortable levels, Medusa took advantage of the 1991-92 downturn in the cement industry by buying a cement plant in Demopolis, Alabama, related assets, an 814,000-ton, single-kiln plant, and nine cement distribution terminals in the southeastern United States from Lafarge Corporation at a depressed price of $50.5 million in early 1993. In 1996, Thomasville Stone and Lime’s name was changed to Medusa Minerals Company.
In 1997, Medusa Minerals tripled in size through the acquisition of Lime Crest Corporation and White Stone Company of Southwest Virginia, establishing a network of industrial limestone and lawn and garden operations along the eastern seaboard. Sparta, New Jersey-based Lime Crest, was acquired in January for $12.8 million. Whitestone, based in Castlewood, Virginia, was a privately owned industrial limestone and aggregate producer, and operated a limestone pelletizing plant in Paradise, Pennsylvania. Whitestone was also a leading producer of home and garden products and other industrial limestone products in certain mid-Atlantic markets and the Southeast, as well as the leading producer of construction aggregates in southwest Virginia. Whitestone’s acquisition, combined with Medusa’s operations in Thomasville, Pennsylvania, and Sparta, New Jersey, gave the company significant added presence in the lawn and garden industry and with industrial limestone products in the eastern half of the United States.
Also in 1997, Medusa announced the “Clinchfield 2000 Project,” a $56 million plant modernization and expansion of its Clinchfield, Georgia cement complex and related distribution facilities. The remodeling promised to boost production of clinker, a cement component, from 175,000 tons per year to approximately 760,000 tons annually.
As the U.S. cement industry’s most profitable and longest-lived company, Medusa Corporation seemed well-situated to remain in a leading position.
Medusa Corporation produces and sells portland and masonry cements; mines, processes and sells construction aggregates, lawn & garden and industrial limestone products; and provides construction services for highway safety.
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—Daryl F. Mallett