Titan Cement Company S.A.
Titan Cement Company S.A.
Sales: EUR 1.04 billion ($1.23 billion) (2003)
Stock Exchanges: Athens
Ticker Symbol: TITK
NAIC: 327310 Cement Manufacturing
Titan Cement Company S.A. is Greece's leading cement producer—the 100-year-old company is also that country's only domestic producer of cement and cement products. The company's four Greek cement plants produce more than six million tons per year, and command a 40 percent market share at home. Since the beginning of the 1990s, Titan also has made a push to become a diversified and vertically integrated company, adding ready-mix concrete production, aggregates, and cement products including cement blocks and mortar. Titan also owns a producer of china tableware in Greece, Ionia S.A. Together, these activities represent some 40 percent of the company's total sales of more than EUR 1 billion ($1.2 billion) for 2003. Meanwhile, Titan has matched the diversification of its products with a geographic expansion. Since the early 1990s, Titan has entered a number of foreign markets, most notably the United States, where the company controls Tarmac America Titan also is present in the former Yugoslav Republic of Macedonia, and in Serbia, Bulgaria, and Egypt. In all, the company operates 11 cement plants with a total production capacity of 16 million tons per year. This operation is supported by a network of seven cement distribution facilities in the United States, France, the United Kingdom, Egypt, and Italy. Titan also produces more than 4.5 million tons of ready-mix concrete at 67 distribution centers; and the company operates ten quarries, three mines, and a mortar production facility. Titan Cement has been listed on the Athens Stock Exchange since 1912, but remains controlled at 51 percent by the founding Canellopoulos family.
Cementing Greece's Industrialization
in the 20th Century
The beginnings of industrialization in Greece at the turn of the 20th century brought with it an increasing demand for building materials, and most important, for cement. At the time there were no native cement producers, and the country depended on imports for its cement needs. In 1902, however, brothers Nicholaos and Angelos Canellopoulos launched their own cement production business in the town of Elefsis. That plant became not only the first cement plant in Greece, but in the region as well.
The Canellopoulos' company prospered, and by 1912 went public, changing its name to the Titan Cement Company S.A. After becoming hooked up to Greece's developing electrical grid in 1924, Titan was able to step up its production, and by 1930 the company had begun exporting cement for the first time, becoming an important supplier for the region. Titan also distinguished itself by a high degree of commitment to social welfare. As such, the company began providing accident insurance as early as 1922, and in 1927 Titan scaled back its employees' workday from 12 to 8 hours.
World War II interrupted the company's export operations, but by 1948, Titan cement once again found its way onto the international market. Nonetheless, the high cost of transporting cement, and the product's comparatively low value, ensured that the cement sector remained a more or less local industry. This factor helped Titan maintain its position as Greece's leading cement company.
Titan began upgrading its production in the early 1960s. In 1961, the company refitted its Elefsis plant, becoming the first in Greece to install environmentally friendly electrostatic filters. The following year, the company debuted a second plant, bringing its production to Thessaloniki. That plant was followed shortly by a third site, this time in Drepano, in the Peloponese island chain, which began production in 1966.
Titan continued enhancing its production capacity into the 1970s, building a fourth plant in Kamari in 1976. That facility enabled Titan to claim a larger share of the crucial Athens market. By then, Titan's annual cement production had already topped five million tons. The company also had launched an early move to become a vertically integrated operation. That effort began in 1971 with the acquisition of a number of ready-mix concrete producers. At the same time, the company began formulating a new environmental regeneration policy of planting trees at its former quarry sites. In support of that program, the company started up its own tree nursery in 1977.
Vertically Integrated, International Operator
in the New Century
International expansion took on new importance for Titan as it turned toward the 1980s. In 1979, the company launched exports to the Eastern Mediterranean market, using cost-efficient floating terminals to transport its cement products. Toward the end of the decade, Titan's international expansion became still more ambitious, as the company began targeting the distribution markets in western Europe and the United States. In support of that strategy, Titan opened a series of distribution terminals in France and the United Kingdom, as well as in the United States.
Titan's two-pronged growth strategy—of vertical integration and international expansion—crystallized in the 1990s. The company began making a series of acquisitions of ready-mix producers and also picked up a number of new quarries, starting in 1991. The following year, the company made a major commitment to growth in the United States when it bought up a 59.1 percent stake in Roanoke Cement, based in Virginia, from Tarmac PLC. The remaining shares were held by Tarmac's U.S. subsidiary.
Titan added to its product lineup at mid-decade, launching production of intermix dry mortar in 1997. That operation helped complete Titan's vertical integration, extending it beyond cement to ready-mix concrete, aggregates, and mortar, as well as quarry operations. These diversified products grew to represent some 40 percent of Titan's total sales by the turn of the new century.
Titan sought to step up its international operations at the same time. The company targeted the nearby Balkan region especially, placing bids on a number of nationally controlled cement producers in Albania, Bulgaria, and in the former Yugoslav Republic of Macedonia as they came up for privatization. Yet the company's expansion hopes were dashed as it found itself outbid by its larger competitors on a number of prime Balkan region cement producers.
At last, in 1998, Titan found its foothold in the Balkans, when it succeeded in its bid for the 48.6 percent stake in Plevenski Cement put up for sale by the Bulgarian government. Titan later stepped up its stake in Plevenski to 98 percent. The addition of the Bulgarian plant added 400,000 tons per year to Titan's production capacity, raising it above six million tons per year. Soon after, the company joined with Holcim, of Switzerland, to acquire 95 percent control of Cementarnica Usje, in Macedonia.
Titan next turned to Egypt, forming a joint venture with France's Lafarge to acquire a 76 percent stake in Beni Suef Cement Company. The following year, the joint venture increased its holding in Beni Suef to 95 percent. In that year, Titan returned to its expansion in the United States, buying up Tarmac America for $636 million from Tarmac PLC's new parent Anglo American. Following the acquisition, Titan began refocusing Tarmac America on its cement and ready-mix concrete operations, selling off Tarmac America's non-cement businesses, such as its sand and gravel, building products, and others, helping to reduce the purchase price by nearly $300 million.
GOVERNING OBJECTIVE We aim to be an independent multinational vertically integrated cement producer, combining entrepreneurial spirit and operating excellence with respect for people, society and the environment.
- Brothers Nicholaos and Angelos Canellopoulos found the first cement production plant in Elefsina, Greece.
- The company goes public on the Athens stock exchange as Titan Cement Company.
- Titan connects to the electrical grid, increasing production.
- Titan begins its first exports of cement, which end during World War II.
- Titan returns to cement exports.
- A second cement plant is built in Thessaloniki.
- A third cement plant is built in Drepano, Peloponese Islands.
- Production of ready-mix concrete begins.
- A fourth cement plant is built in Kamari, near Athens.
- Titan begins exporting to the Eastern Mediterranean region using floating terminals.
- Titan opens distribution centers in the United States and Europe.
- Titan launches a new vertical integration strategy, adding quarries and ready-mix concrete plants.
- Titan acquires 59 percent of Roanoke Cement in Virginia, in the United States.
- Titan begins production of intermix dry mortar as part of a vertical integration strategy.
- Titan acquires Tarmac America, including the remaining stake in Roanoke Cement.
- Titan completes a EUR 350 million investment program, including expansion of the Thessaloniki plant.
Titan went back to Egypt for its next expansion in 2002, joining Lafarge again to acquire an 88 percent stake in Alexandria Portland Cement Co. The company went on its own to Serbia, buying a 70 percent stake in a cement operation in Kosjeric. The addition of the Serbian operation added 600,000 tons per year of capacity to Titan's total, a figure expected to top 800,000 tons after a $26 million investment by Titan. Titan continued its acquisition drive, buying up fly ash producer Separation Technologies in the United States.
As it moved into the 2000s, Titan engaged on an extensive investment program. Much of the company's spending went toward upgrading its newly acquired Balkan region operations. In all the company earmarked some EUR 352 million on expanding its production capacity, including nearly EUR 80 million spent on expanding its plant in Thessaloniki. After 100 years in operation, Titan Cement remained one of the top 20 titans of the global cement industry and the largest in its Greek home.
A.D. Cementarnica Usje (FYR of Macedonia); Achaiki Maritime Co. S.A; Aeolian Maritime Co. S.A; Alexandria Portland Cement Company (Egypt); Beni Suef Cement Company (Egypt); Cementara Kosjeric Ad (Serbia); Fintitan Srl (Italy); Interbeton Building Materials S.A.; Intertitan Trading International S.A. (France); Kimolos Maritime Co. S.A.; Naftitan Maritime Co. S.A.; Polikos Maritime Co. S.A.; Roanoke Cement Plant (United States); Titan America LLC (United States); Titan Atlantic Cement S.A. (United States); Titan Cement U.K. Ltd.; Titan International Trading Co. S.A.
IFI; Lafarge S.A.; CRH PLC; Heidelberg Cement AG; HBG, Hollandsche Beton Groep N.V.; Fomento de Construcciones y Contratas S.A.; Grupo Ferrovial S.A.; Holderbank Financiere Glaris Ltd.; Italmobiliare S.p.A.; Rinker Group Ltd.; Société des Ciments Francais S.A.
Dinsmore, Christopher, "Greek Cement Company Announces Completion of Production Asset Sale," Knight Ridder/Tribune Business News, January 3, 2001.
Hope, Kerin, "Recipe for a Strong Mix," Financial Times, June 1, 1998, p. 5.
Maxwell-Cook, Paul, "Titan's Latest Modernisation Project," World Cement, April 2003, p. 19.
Parker, Akweli, "Greek Firm to Buy Tarmac," Virginian Pilot, August 29, 2000, p. D1.
"Titan Acquires 70% of Serb Cement Manufacturer Kosjeric," European Report, February 13, 2002.
"Titan Cement Completes Buy of Tarmac America," Pit & Quarry, December 2000, p. 18.
—M. L. Cohen