Competition Commission
Anglo American/Lafarge Merger Inquiry
Presented by: GfK NOP
Your contact person: Nicky Brockington
Phone: +44 (0)20 7890 9367
E-mail: [email protected]
GfK NOP
GfK. Growth from Knowledge
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Research Objectives and Approach
The main purpose of this research was to: Identify the key drivers of decision making about which construction products are produced and
which products are purchased amongst customers and competitors of Anglo American and Lafarge Identify the effect that the merger might have on customers and competitors.
Survey conducted amongst:
The person responsible for negotiating prices and making decisions about which products to
purchase or produce.
Customers of Anglo American or Lafarge who have purchased one of the following four products in the last 12 months: Aggregates/RMX/Asphalt/Cement.
Competitors who produce one of the following products:
Aggregates/RMX/Asphalt.
Customers with a spend level in the last 3 years of at least: Aggregates £10,000, RMX £75,000, Asphalt £10,000, Cement £10,000. All the ‘large 5 nationals’ and their subsidiaries were removed from the sample.
Interviews were carried out by telephone using a structure questionnaire. 6 in-depth telephone interviews were also carried out prior to the main study as a pilot to test the questionnaire.
Interviews conducted between 27th October and 21st November, 2011.
2
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Sample taken from Anglo American and Lafarge customer lists and additionally a list of BDS Competitors
1,000 interviews completed as shown in the table below, representing a 19% response rate overall (excluding those ineligible to take part in the survey and incorrect sample details)
Due to the nature of respondent businesses, it was often difficult to secure an interview with the appropriate contact as many were working ‘off-site’.
Respondents answered about one product only in the survey even if they purchased or produced more than one to keep survey length to a minimum and avoid respondent fatigue.
Sample
3
Number of interviews
Aggregate Customers 292
Asphalt Customers 252
RMX Customers 270
Cement Customers 67
Aggregate Competitors 41
RMX Competitors 72
Asphalt Competitors 6
Due to the sample size of asphalt competitors – no separate analysis has been included in the report – only 30 contacts were provided for this category
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Presentation Agenda
2
3
1 Company background
4
6
Switching behaviour/ability to switch
5
Suppliers
7
Summary
Appendix
Expected effect of merger
Purchasing
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Company Background
1
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Customers
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Products produced and purchased
Base: All customers: Aggregates (292), Asphalt (252), RMX (270), Cement (67) Q.S2/3 Does your business purchase/produce .....?
7
Customers
Aggregate Customers
12% only purchase
aggregates
88%
25%
21% Lafarge 63% Tarmac 16% Both
Asphalt Customers
3% only purchase asphalt
97%
15%
15% Lafarge 70% Tarmac 14% Both
RMX Customers
10% only purchase RMX
90%
13%
29% Lafarge 55% Tarmac 16% Both
Cement Customers
1% only purchase cement
99%
30%
34% Lafarge 46% Tarmac 19% Both
Only purchase ONE product
Purchase other construction products*
Produce other construction products*
*aggregates, asphalt, RMX, cement
Customer of Joint Venture parties
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
37%
27%
43%
34%
19%
31%
32%
30%
10%
12%
12%
11%
33%
30%
13%
25%
0% 20% 40% 60% 80% 100%
Cement Customers
RMX Customers
Asphalt Customers
Aggregate Customers
Local
Regional
Multi-regional
National
Base: All aggregates customers (292), asphalt customers (270), RMX customers (251) and cement customers (67) Q Do you consider your business to be local, regional, multi-regional or national?
Local, regional or national business 8
Customers
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
6%
33%
27%
39%
16%
2%
1%
5%
74%
26%
14%
0%
0%
45%
0%
5%
5%
14%
66%
Civil Engineering Company
Local authority
Concrete products producer
Distributor/builder merchant/DIY store
General construction/contractor
Aggregate customers
Asphalt customers
RMX customers
Cement customers
Type of business
Q. Which one of the following best describes your business for which .... are purchased?
9
Base: All customers: Aggregates (292), Asphalt (252), RMX (270), Cement (67) N.B. Responses of 5% or more for at least one product category shown
Customers
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Purchasing for fixed site or projects 10
53%
5%
15%
43%
90%
76%
4%
5%
9%
0% 20% 40% 60% 80% 100%
Cement Customers
RMX Customers
Aggregate Customers
Mainly fixed
Mainly projects
Both equally
Q. Do you mainly purchase for fixed sites or mainly for specific projects whose location varies on a job-by-job basis? Base: All customers excluding asphalt: Aggregates (292), RMX (270), Cement (67)
Customers
N.B Question not asked of Asphalt customers
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Products produced and purchased
Base: All competitors Aggregates (41), RMX (72) Q.S2/3 Does your business purchase/produce .....?
12
Competitors
Aggregate Competitors
71% only produce primary
aggregates
29%
88%
7% Lafarge 30% Tarmac
4% Both 59% Neither
RMX Competitors
76% only produce RMX
24%
100%** - 28% also purchase RMX
35% Lafarge 6% Tarmac 5% Both
54% Neither
Only produce ONE product
Produce other construction products*
Purchase other construction products*
*aggregates, asphalt, RMX, cement
Customer of Joint Venture parties
** aggregates and cement needed to make RMX
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
78%
76%
21%
20%
1%
2%
2%
0% 20% 40% 60% 80% 100%
RMX Competitors
Aggregate Competitors
Local Regional Multi-regional National
Base: All aggregate competitors (41) and RMX competitors (72) Q Do you consider your business to be local, regional, multi-regional or national?
Local, regional or national business 13
Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Types and number of sites 14
Aggregates RMX
37%
51%
10% 2%
6+
4-5
2-3
1 60%
28%
5% 7%
Active sites Fixed plants
Types of sites/production Fixed sites 60% Volumetric trucks 38% Mobile plants 8%
Q. How many ...... which produce .... do you own or operate in the UK?
Average 2 Average 2
Base: All Aggregates competitors (41) and RMX competitors (43) who have fixed sites
The average number of volumetric trucks owned is three with a third only owning one truck
Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Status of production operations
Q. In the last 12 months which one of the following statements best describes your business in terms of your ... production capacity?
15
Only 2% of RMX Competitors claimed to have been operating at full capacity in the last 12 months and nearly half had a lot of spare
capacity.
Base: All RMX competitors (72) and Aggregate Competitors (41)
Around a fifth of Aggregate competitors and three in ten RMX competitors expect to open a new site in the next 3 years
More likely to be those businesses with more than
one plant already
Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Competitiveness of business compared with large national producers in area (Aggregate and RMX competitors)
16
Base: All aggregate competitors (41) and RMX competitors (72) Q Thinking about large national aggregate producers in your area, how competitive or uncompetitive do you think your business is compared with them on the following attributes
49%
59%
76%
93%
15%
5%
2%
2%
24%
24%
12%
12%
12%
10%
5%
Ability to increase outputs
Cost of production
Price charged to customers
Level of service
Competitive Neither Uncompetitive Don't know
RMX Competitors
Large national producers defined as any of Aggregate Industries, CEMEX, Hanson, Lafarge, Tarmac active in area
Aggregate Competitors
68%
49%
54%
92%
8%
10%
15%
22%
38%
26%
6%
Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Purchasing 2
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Aggregates
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
47%
89%
13%
14%
46%
79%
92%
49%
71%
46%
Primary special types
Primary crushed rock
Primary sand and gravel
Secondary
Recycled
All in one
Aggregates purchased (Aggregate customers and RMX competitors)
19
Base: All Aggregate customers (292) and RMX Competitors (72) Q Which of the following aggregates does your business purchase? Q Which of the following types of aggregates does your business purchase to produce RMX?
RMX Competitors for use in production of RMX
Aggregate Customers
Grades Coarse 77% Fine (natural) 74% Fine (from coarse) 39% Other 6%
Primary
Customers and Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Proportion of Aggregates purchased (Aggregate customers and RMX competitors)
20
Base: All Aggregate customers (292) and RMX Competitors (72) Q And what proportion of this volume did each of the following types of aggregate represent in terms of total aggregate production/purchasing?
RMX Competitors for use in production of RMX
Aggregate Customers
Proportion purchasing ONE type of aggregate only: 10% Most likely product to purchase on it’s own: Sand and Gravel 7% Proportion purchasing MORE THAN ONE type of aggregate only: 90% Proportion purchasing primary only/primary and other aggregates Primary only 19% Primary and other aggregates 81%
Proportion purchasing ONE type of aggregate only: 54% Primary crushed rock 6% Primary sand and gravel 44% Secondary 1% Recycled 1% Proportion purchasing MORE THAN ONE type of aggregate only: 46% Proportion purchasing primary only/primary and other aggregates Primary only 81% Primary and other aggregates 19%
Customers and Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
25%
26%
30%
22%
12%
14%
2%
2%
2%
9%
12%
8%
6%
4%
2%
35%
42%
43%
Primary/secondary or recycled (252)
Coarse or fine (252)
Sand and gravel or crushed rock (247)
Very important Fairly important Neither Not very important Not at all important Depends on project
Importance of types of aggregates when purchasing (Aggregate customers)
21
Base: All Aggregate customers excluding merchants who purchase each product Q When making decisions about which aggregates to purchase, how important or unimportant are the following elements?
Customers
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
22
Factors important in deciding on which aggregates to purchase (Aggregate customers and RMX competitors)
91%
44%
29%
18%
9%
18%
5%
7%
82%
82%
15%
22%
0%
6%
3%
1%
Price of product
Quality of product
Availability of product
Quality of service
Types of work/project
Delivery times
Customer request/demand
Environment/green concerns
Aggregate Customers
RMX Competitors
Most important Aggregate RMX Customers Competitors Quality of product 17% 47% Price of product 55% 38%
Base: All Aggregate customers excluding merchants (252) and RMX competitors (72) Q What is the most important factor to you when considering what aggregates to purchase? And what others are important?
Customers and Competitors
N.B. Responses of 5% or more for at least one product category shown
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Cement
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
78%
26%
6%
18%
11%
14%
CEM 1
CEM 2
CEM 3
GGBS
PFA
Other
Types of Grey Cement purchased (Cement customers and RMX competitors)
24
Base: All Cement Customers (67) and RMX competitors (71) Q Which types of bulk grey cement or other cement products does your business purchase?
Cement Customers RMX Competitors for use in production of RMX
Type of grey cement bought Bagged 53% Bulk 73%
61%
31%
1%
24%
CEM 1
CEM 2
CEM 3
Other
Customers and Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Proportion of Cement purchased (Cement customers and RMX competitors)
25
Base: All cement customers (67) and RMX Competitors (72) Q And what proportion of this volume did each of the following types of cement represent in terms of total cement purchasing?
RMX Competitors for use in production of RMX
Cement Customers
Proportion purchasing ONE type of cement only *: 67% CEM 1 39% CEM 2 14% CEM 3 0% Other cement products 14% Proportion purchasing MORE THAN ONE type of cement only: 33% CEM 1 and CEM 2/3 21%
Customers and Competitors
Proportion purchasing ONE type of cement only: 58% CEM 1 37% CEM 2 7% CEM 3 0% GGBS 1% PFA 0% Other 13% Proportion purchasing MORE THAN ONE type of cement only: 42% CEM 1 and CEM 2/3 21%
* Excluding not stated
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Factors important in deciding which cement to purchase (Cement customers and RMX competitors)
26
89%
60%
15%
20%
18%
3%
5%
5%
76%
75%
30%
13%
7%
3%
0%
0%
Price of product
Quality of product
Quality of service
Availability of product
Delivery times
Customer request/demand
Environment/green concerns
Building regulations
Cement Customers
RMX Competitors
Most important Cement RMX
Customers Competitors Price of product 54% 48% Quality of product 23% 38%
Base: All cement customers (67) and RMX competitors (72) Q What is the most important factor to you when considering what aggregates to purchase? And what others are important?
Customers and Competitors
N.B. Responses of 5% or more for at least one product category shown
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
RMX and Asphalt
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
87%
14%
55%
From fixed RMX plants
From mobile plants
From volumetric/minimix trucks
Types of RMX purchasing in last 12 months (RMX customers)
28
Base: All RMX customers excluding merchants (238) Q In the past 12 months , from which of the following have you purchased RMX?
Main Reasons for using volumetric trucks rather
than RMX plants
Size of project 44% Prices of RMX 30% Availability of RMX 21% Other 45%
Customers
51% only use fixed RMX plants
9% only use volumetric
trucks
1% only use mobile plants
39% use more than one method of purchasing
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Factors important in deciding which RMX to purchase (RMX customers)
29
Base: All RMX customers excluding merchants (238) Q What is the most important factor to you when considering where to purchase RMX? And what others are important?
94%
41%
41%
22%
19%
Price of product
Quality of product
Quality of service
Delivery times
Availability of product
Most important
Price of product 61% Quality of product 11%
Customers
N.B. Responses of 5% or more for at least one product category shown
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Types of Asphalt purchasing in last 12 months (Asphalt customers)
30
Base: All Asphalt customers (270) Q Which of the following types of project was the asphalt you purchased in the last 12 months used for?
Essential to use 24/7 site 20% Preferred to use 24/7 site 13% No need to use 24/7 site 67%
Customers
Purchasing from sites with permission to operate 24/7
Proportion purchased from 24/7 sites
24/7 sites: Average proportion of purchasing: 26%
7%
4%
5%
14%
44%
11%
7%
5%
2%
27%
45%
None
1-20%
21-50%
51-80%
81-100%
Don't know
24/7
Non 24/7
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Switching behaviour/ability to switch
3
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Aggregates
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
RMX Competitors for use in production of RMX
Ability to switch purchasing between different types of aggregates (Aggregate customers and RMX competitors)
33
Base: All aggregate customers excluding merchants (252) and RMX competitors (72) Q Thinking about your purchases of aggregates in the last 12 months, could you have changed any of your purchases from … to …?
16%
13%
36%
76%
82%
59%
8%
6%
6%
From sand and gravel to crushed rock (230)
From crushed rock to sand and gravel (197)
From primary to secondary/recycled (251)
Yes No Don't know
Aggregate Customers
Approximately half of RMX competitors could switch : • From primary to secondary
or recycled • From crushed rock to sand
and gravel
Lower proportions of RMX competitors could switch between other types of aggregates: • From sand and gravel to
crushed rock (c. two-fifths) • From coarse to fine (c.3 in
10) • From fine to coarse (c. 2 in
10)
Customers and Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Proportion of aggregates which could be switched (Aggregate customers and RMX competitors)
34
Base: All aggregate customers and RMX competitors who could switch between different aggregates Q Approximately what proportion of your purchases in the last 12 months do you think you could have changed from …to…?
5%
8%
6%
24%
32%
29%
22%
24%
18%
41%
24%
39%
5%
8%
4%
From sand and gravel to crushed rock (37)
From crushed rock to sand and gravel (25)
From primary to secondary/recycled (90)
All of it Three-quarters Half A quarter Less than a quarter Don't know
RMX Competitors for use in production of RMX
Aggregate Customers
Of those who could switch between products, moving from primary to secondary or recycled was the most difficult – only about one in ten could switch completely
83% could either not switch or only switch up
to a quarter of production from primary to
secondary or recycled
Overall 73% could either not switch or switch less than a quarter from primary to secondary or recycled
Customers and Competitors
* N.B small base size
*
*
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Reasons for not being able to switch at all/less than 25% between aggregates (Aggregate customers)
35
27%
20%
14%
14%
10%
8%
Availability of product
Customer request/demand
Types of work/project
Quality of product
Buidling regulations
Price of product
Primary to Secondary/Recycled (51)
Base: All aggregate customers who could not switch or switch less than 25% Q Why would you not be able to change any/more of your purchasing from …to…?
Customers
From Crushed Rock to Sand and Gravel
Top reasons Customer request
Availability of product
From Sand and Gravel to Crushed Rock
Top reasons Customer request Quality of product
N.B. Responses of 5% or more for at least one product category shown
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
21%
12%
4%
21%
76%
88%
96%
79%
12%
7%
2%
49%
81%
87%
97%
46%
From sand and gravel to crushed rock (197)
From crushed rock to sand and gravel (230)
From secondary/recycled to primary (117)
From primary to secondary/recycled (252)
Yes No
Switching aggregates in the last 3 years (Aggregate customers and RMX competitors)
36
Base: All aggregate customers and RMX competitors purchasing each product Q In the past 3 years have you switched any of your aggregates purchased from …to ….?
Aggregate Customers RMX Competitors for use in production of RMX
Customers
(72)
(57)
(64)
(34)
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Reasons for switching between aggregates (Aggregate customers)
37
Base: All aggregates customers who have switched between aggregates Q What was the main reason for the switch from …to …?
41%
20%
20%
10%
9%
5%
Price of primary increased
Price of secondary/recycled decreased
Environmental/Green concerns
Lack of availability of primary
Customer Request
Quality of primary was not good enough
Primary to secondary/recycled (124)
Crushed Rock/Sand and Gravel
Customers
The price of crushed rock INCREASING was the main reason for switching from crushed rock to sand and gravel Main reason for switching from sand & gravel to crushed rock was an INCREASE in the price of sand & gravel
N.B. Responses of 5% or more for at least one product category shown
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Cement
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Ability to change from CEM 1 TO CEM 2/3 (Cement customers and RMX competitors)
39
Base: All cement customers, excluding merchants, (41) and RMX competitors (56) who buy CEM1 Q Thinking about your purchases in the last 12 months, could you have changed any of your purchases from CEM1 to CEM2 or CEM3?
Yes, 38%
No, 59%
Don't know, 4%
Whether possible? Proportion which could be switched
Around two-thirds could switch at least half of their purchases from CEM 1 to CEM 2 or CEM 3
Yes RMX Competitors for use in production
of RMX
Cement Customers
Yes, 15%
No, 76%
Don't know, 9% Of the 6 respondents who
could change half could change all of it
Yes
Customers and Competitors
15% of cement customers have changed from CEM 1 to CEM 2 or 3 in the last 3 years
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
34%
18%
8%
8%
5%
Quality of product
Customer request/demand
Price of product
Types of work/project
Building regulations
Reasons for not being able to switch at all/less than 25% from CEM 1 to CEM 2/3 (Cement customers and RMX competitors)
40
Base: All RMX competitors (38) and cement customers (31) who could not switch or could only switch less than a quarter Q Why would you not be able to change any/more of your purchasing from …to…?
41%
10%
10%
7%
Quality of product
Price of product
Types of projects involved
Customer request/demand
RMX Competitors for use in production of RMX
Cement Customers
Customers and Competitors
N.B. Small base sizes N.B. Responses of 5% or more for at least one product category shown
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
RMX
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Ability to switch RMX purchasing from fixed plants to volumetric trucks or mobile plants (RMX customers)
42
Base: All RMX customers who have fixed plants (191) Q Thinking about your purchases of RMX in the last 12 months, could you have change any of your purchases from ... to ...? Q Approximately what proportion of your purchases in the last 12 months, do you think you could have changed?
Yes, 25%
No, 69%
Don't know,
7%
Whether possible? Proportion which could be switched
Only around a third could switch more than a quarter of their purchases from fixed plants to volumetric trucks
Yes
From fixed plants to volumetric trucks
Yes, 15%
No, 81%
Don't know,
4% From fixed plants to mobile plants at sites
Only around a fifth could switch more than a quarter of their purchases from fixed plants to mobile plants
Yes
Customers
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Reasons for not being able to switch at all/less than 25% to volumetric trucks or mobile sites (RMX customers)
43
Base: All RMX Customers who could not change any or less than 25% of their purchasing (n=193) Q Why would you not be able to change any of your purchasing from ... to ...?
22%
11%
16%
5%
7%
5%
5%
6%
15%
22%
0%
3%
0%
2%
1%
0%
Trucks/Mobile sites cannot cope with volumes
Types of work/project
Price of trucks/mobiles
Availability of product
Quality of trucks/sites
Quality of service
Customer request/demand
Delivery times
From fixed sites to volumetric trucks
From fixed sites to mobile site
Customers
N.B. Responses of 5% or more for at least one product category shown
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Suppliers 5
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Aggregates
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Ease of purchasing aggregates (Aggregate customers and RMX competitors)
46
Base: All aggregate customers (292) and RMX competitors (71) Q How easy of difficult is it to ……obtain quotes from different suppliers of …? …. compare prices between different suppliers of …?
13%
37%
40%
40%
10%
9%
15%
7%
21%
4%
RMX Competitors
Aggregate Customers
Very easy Fairly easy Neither/DK Fairly difficult Very difficult Don't know
Obtaining quotes from different suppliers Comparing prices from different suppliers
17%
51%
49%
38%
4%
3%
8% 18%
2%
3%
2%
Customers and Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Purchasing behaviour for aggregates in the last 3 years (Aggregate customers and RMX competitors)
47
Base: All aggregate customers (292) and RMX competitors (72) Q Which of the following best describes your purchasing behaviour in terms of aggregate suppliers in the last 3 years?
36%
51%
9%
3%
1%
10%
51%
32%
1%
6%
Bought regularly from a lot of different suppliers
Bought regularly from 2-3 suppliers
Bought regularly from one supplier
Not bought regularly, but use different suppliers
Not bought regularly, but use one supplier
Aggregate Customers
RMX Competitors
Customers and Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Base: All aggregate customers (292) and RMX competitors (72) Q Which suppliers have you purchased aggregates from in the last 12 months?
48
Suppliers purchased aggregates from in the last 12 months (Aggregate customers and RMX competitors)
3%
26%
37%
37%
43%
75%
72%
89%
13%
17%
25%
26%
24%
32%
67%
71%
Internal purchase
Aggregate Industries
Cemex
Hanson
Lafarge
Tarmac
Other
Any of large 5 suppliers
Aggregate Customers
RMX competitors
Main supplier ** Aggregate RMX Customers Competitors
* 4%
8% 10%
13% 14%
14% 11%
18% 11%
40% 18%
34% 51%
70% 54%
Customers and Competitors
** allowed to mention more than one main supplier * =<0.5%
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
49
Independent suppliers for aggregates (Aggregate customers)
Yes, 67%
No, 29%
Don't know,
4%
Any independent suppliers in the area?
Yes
41%
33%
4% 7%
15% Not all likely
Not very likely Neither
Fairly likely
Very likely
Likelihood to use in the future?
Being too expensive was the key reason mentioned for not purchasing from independent suppliers
Q Are there any independent aggregate suppliers from which you can purchase aggregates from in your area? Q How likely or unlikely are you to consider purchasing aggregates from independent suppliers in your area in the future? Q Why do you not purchase from independent suppliers?
Base: All only buying from large national suppliers (N= 113)
Base: All only buying from large national suppliers who have independent suppliers in their area (N= 69)
Customers
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Switched suppliers for aggregates in the last 3 years (Aggregate customers and RMX competitors)
50
Aggregate RMX Customers Competitors Completely switched 10% 15% Some of purchasing 44% 35% Not switched 43% 49%
Switched suppliers in the last 3 years?
Aggregate Customers (158) From one of the large nationals to another large national 46% From one of the large nationals to an independent 30% From an independent to a large national 5% From an independent to another independent 11%
SWITCHED
Base: All aggregate customers (292) and RMX competitors (72) Q Thinking of any suppliers you have used, which of the following, if any actions have you taken in relation to you suppliers? Q The last time you switched suppliers for aggregates, either partially or completely was it …?
Type of supplier switched to
The base size is small for RMX Competitors, but as for aggregate customers the highest response was switching from one of the
larger nationals to another large national
Customers and Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Reasons for switching suppliers for aggregates in the last 3 years (Aggregate customers)
51
70%
18%
14%
13%
6%
Price of product
Quality of service poor
Quality of product
Availability of product
Delivery times too long
Aggregate Customers
Base: All aggregate customers (158) Q What reasons made you switch suppliers?
The base size is small for RMX Competitors, but the reasons for switching mirrored that of
aggregate customers
Customers and Competitors
N.B. Responses of 5% or more for at least one product category shown
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Experienced any of the following in purchasing aggregates in the last 3 years (Aggregate customers and RMX competitors)
52
Base: All aggregate customers (292) and RMX competitors (72) Q In the last 3 years, have you experienced any of the following in purchasing aggregates from any suppliers?
44%
43%
23%
14%
66%
34%
56%
40%
15%
19%
64%
36%
Suppliers quoting 'very high' prices
Not having enough suppliers who will deliver
in area
Suppliers giving longer delivery times
Suppliers refusing to quote/supply
Experienced any of the above
None
Aggregate Customers
RMX competitors
Regions with too few suppliers
Customers and Competitors
Aggregate Customers Those based in Wales were the most likely to have too few suppliers.
Around a third of customers in other areas experienced this issue
RMX Competitors Around a third of those based in the North/West
and South East claimed to have too few suppliers
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
48%
14%
47%
Any of large 5 suppliers
Other suppliers
Don't know/refused
53
Base: All aggregate customers (42) who have experienced suppliers refusing to quote or supply Q Which suppliers refused to quote or supply in your area?
Reasons for refusing to quote/supply?
Around four fifths of aggregate customers did know the reason suppliers refused to quote and most of these customers also had the reason explained to them by the supplier
“The job was too small”
“It was not commercially viable”
Suppliers refusing to quote/supply for aggregates (Aggregate customers)
N.B small base size
“Don’t have a quarry in the area”
Customers and Competitors
Base for RMX too small to show
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
54 Any occasions when you
attempted to renegotiate?
Successful in renegotiating?
Suppliers giving longer delivery times for aggregates (Aggregate customers)
Yes 52% No 48%
Only about one in ten aggregate customers felt they were never successful in renegotiating
50%
17%
43%
Any of large 5 suppliers
Other suppliers
Don't know/refused
Base: All aggregate customers (66) who have experienced suppliers giving longer delivery times for aggregates Q Which suppliers gave longer delivery times?
Customers
Base for RMX too small to show
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
51%
21%
35%
68%
20%
18%
Any of large 5 suppliers
Other suppliers
Don't know/refused
Aggregate Customers
RMX Competitor
55
Aggregate RMX Customers Competitors Yes 53% 40% No 47% 60%
Successful in renegotiating? Aggregate Customers
Always 10% Sometimes 78% Never 10%
Suppliers quoting very high prices for aggregates (Aggregate customers and RMX competitors)
Any occasions when you attempted to renegotiate?
Successful in renegotiating?
Base: All aggregate customers (129) and RMX competitors (40) who have experienced suppliers quoting very high prices for aggregates Q Which suppliers quoted very high prices?
N.B small base size for RMX competitors
Customers and Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Cement
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Ease of purchasing cement (Cement customers and RMX competitors)
57
Base: All cement customers (67) and RMX competitors (72) Q How easy of difficult is it to ……obtain quotes from different suppliers of …? …. compare prices between different suppliers of …?
18%
18%
32%
39%
10%
6%
18%
12%
21%
12%
1%
13%
RMX Competitors
Cement Customers
Very easy Fairly easy Neither/DK Fairly difficult Very difficult Don't know
Obtaining quotes from different suppliers Comparing prices from different suppliers
24%
27%
40%
43%
6%
1%
8%
9%
19%
15%
3%
4%
Customers and Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Purchasing behaviour for cement in the last 3 years 58
Base: All cement customers (67) and RMX competitors (72) Q Which of the following best describes your purchasing behaviour in terms of aggregate suppliers in the last 3 years?
4%
36%
52%
0%
7%
0%
46%
53%
0%
0%
Bought regularly from a lot of different suppliers
Bought regularly from 2-3 suppliers
Bought regularly from one supplier
Not bought regularly, but use different suppliers
Not bought regularly, but use one supplier
Cement Customers
RMX Competitors
Customers and Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Customers and Competitors
Base: All cement customers (67) and RMX competitors (72) Q Which suppliers have you purchased cement from in the last 12 months?
59
Suppliers purchased cement from in the last 12 months (Cement customers and RMX competitors)
0%
1%
13%
12%
43%
36%
16%
27%
75%
0%
0%
19%
24%
46%
10%
21%
26%
76%
Internal purchase
Aggregate Industries
Cemex
Hanson
Lafarge
Tarmac
Other Importer
Other UK based
Any of large 5 suppliers
Cement Customers
RMX competitors
Main supplier ** Cement RMX Customers Competitors 0% 0% 0% 0% 9% 13% 3% 15% 33% 39% 24% 6% 10% 14% 21% 22% 66% 69%
** allowed to mention more than one main supplier
RMX Competitors tend to be using different suppliers for aggregates compared to cement
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Base: All cement customers (60) and RMX competitors (72) who do not use any importers of cement Q Have you used any importers of grey cement in the last 5 years? Q Why did you not purchase grey cement from importers?
60
Importers of cement
Yes, 25%
No, 68%
Don't know,
6%
Used any importers?
Reasons for not purchasing from importers
Main reasons for not purchasing from importers Better quality in UK Better reliability of supply No importers available in area
RMX Competitors
Cement Customers
No
Yes, 18%
No, 78%
Don’t know,
3% No
Customers and Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Switched suppliers for cement in the last 3 years (Cement customers and RMX competitors)
61
Cement RMX Customers Competitors Completely switched 12% 24% Some of purchasing 30% 19% Not switched 57% 56%
Switched suppliers in the last 3 years?
Type of supplier switched to
Base: All cement customers (67) and RMX competitors (72) Q Thinking of any suppliers you have used, which of the following, if any actions have you taken in relation to you suppliers? Q The last time you switched suppliers for aggregates, either partially or completely was it …?
Price was the key reason for switching
Although the base size is small, the majority of RMX competitors switched from one large national to another large national
Similarly the base size for Cement customers is also small, but again the highest response was switching from one large national to another large national
Customers and Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Experienced any of the following in purchasing cement in the last 3 years (Cement customers and RMX competitors)
62
Base: All cement customers (71) and RMX competitors (71) Q In the last 3 years, have you experienced any of the following in purchasing cement from any suppliers?
46%
37%
16%
10%
52%
46%
33%
40%
19%
7%
60%
40%
Not having enough suppliers who will
deliver in area
Suppliers quoting 'very high' prices
Suppliers refusing to quote/supply
Suppliers giving longer delivery times
Experienced any of the above
None
Cement Customers
RMX competitors
Customers and Competitors
Regions with too few suppliers
Cement Customers Although the base is very
small, those based in Scotland experienced this
issue to the greatest extent
RMX Competitors Similarly, although a very small base, Scottish based
businesses claimed to experience this issue the
most
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
63
Of those who had experienced high prices, nine in ten RMX competitors said it was from one of the large nationals and two-fifths attempted to renegotiate prices
Suppliers quoting very high prices for cement (Cement customers and RMX competitors)
Around half of Cement customers claimed that they experienced very high prices
from one of the large nationals and most tried to renegotiate
N.B Small base sizes, therefore no actual percentages have been given
Customers and Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
RMX and Asphalt
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Ease of purchasing RMX and Asphalt (RMX and Asphalt customers)
65
Base: All RMX customers (251) and asphalt customers (270) Q How easy of difficult is it to ……obtain quotes from different suppliers of …? …. compare prices between different suppliers of …?
35%
34%
46%
46%
6%
8%
7%
5%
3%
4%
Asphalt Customers
RMX Customers
Very easy Fairly easy Neither/DK
Obtaining quotes from different suppliers Comparing prices from different suppliers
52%
43%
35%
44%
6%
4% 4%
Customers
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Purchasing behaviour for RMX and Asphalt in the last 3 years (RMX and Asphalt customers)
66
Base: All asphalt customers (270) and RMX customers (251) Q Which of the following best describes your purchasing behaviour in terms of aggregate suppliers in the last 3 years?
31%
50%
13%
3%
3%
14%
55%
22%
4%
5%
Bought regularly from a lot of different suppliers
Bought regularly from 2-3 suppliers
Bought regularly from one supplier
Not bought regularly, but use different suppliers
Not bought regularly, but use one supplier
RMX Customers
Asphalt Customers
Customers
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
67
Suppliers purchased RMX and Asphalt from in the last 12 months (RMX and Asphalt customers)
1%
25%
69%
53%
57%
71%
61%
95%
1%
41%
36%
36%
32%
80%
47%
85%
Internal purchase
Aggregate Industries
Cemex
Hanson
Lafarge
Tarmac
Other
Any of large 5 suppliers
RMX customers
Asphalt Customers
Main supplier ** RMX Asphalt Customers Customers 0% 0% 8% 16% 29% 13% 19% 12% 26% 16% 34% 51% 14% 21% 84% 69%
Base: All RMX Customers (251) and Asphalt Customers (270) Q Which suppliers have you purchased .... from in the last 12 months, including internal purchases if applicable?
Customers
** allowed to mention more than one main supplier
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
43%
13%
44%
40%
3%
47%
Likely
Neither/don't know
Not likely
RMX Customers
Asphalt Customers
68
Independent suppliers for RMX and Asphalt (RMX and Asphalt Customers)
Yes, 49%
No, 46%
Don't know, 5%
Any independent suppliers in the area?
Yes
Likelihood to use in the future?
Base: All RMX Customers (N= 93) and asphalt customers (n=136) only buying from large national suppliers Q Are there any independent .... suppliers from which you can purchase in your area?
RMX Customers
Yes, 27%
No, 67%
Don't know, 6%
Yes
Asphalt Customers
Base: All RMX Customers (N= 46) and asphalt customers (n=37) who do have independent suppliers in the area Q How likely or unlikely are you to consider purchasing .... from independent suppliers in your area in the future?
Being too expensive and not having enough suppliers in the area were the main reasons for not using mentioned by Asphalt Customers
Being too expensive was the key reason for not using independent suppliers amongst RMX Customers
Customers
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Switched suppliers for RMX/Asphalt in the last 3 years (RMX and Asphalt Customers)
69
RMX Asphalt Customers Customers Completely switched 12% 8% Some of purchasing 36% 36% Not switched 49% 55%
Switched suppliers in the last 3 years?
RMX Asphalt Customers Customers (122) (118) From one of the large nationals to another large national 81% 78% From one of the large nationals to an independent 11% 14% From an independent to a large national 2% 0% From an independent to another independent 2% 5%
SWITCHED
Base: All RMX customers (251) and asphalt customers (270) Q Thinking of any suppliers you have used, which of the following, if any actions have you taken in relation to you suppliers? Q The last time you switched suppliers for RMX/asphalt, either partially or completely was it …?
Type of supplier switched to
Customers
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Reasons for switching suppliers for RMX/Asphalt in the last 3 years (RMX and Asphalt customers)
70
65%
26%
15%
11%
7%
81%
14%
8%
6%
7%
Price of product
Quality of service poor
Availability of product
Delivery times too long
Quality of product
RMX Customers
Asphalt Customers
Base: All RMX customers (122) and asphalt customers (118) Q What reasons made you switch suppliers?
Customers
N.B. Responses of 5% or more for at least one product category shown
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
48%
47%
26%
18%
71%
28%
41%
41%
21%
13%
61%
38%
Not having enough suppliers who will deliver
in area
Suppliers quoting 'very high' prices
Suppliers giving longer delivery times
Suppliers refusing to quote/supply
Experienced any of the above
None
RMX Customers
Asphalt Customers
Experienced any of the following in purchasing RMX and Asphalt in the last 3 years (RMX and Asphalt customers)
71
Base: All RMX customers (252) and Asphalt customers (270) Q In the last 3 years, have you experienced any of the following in purchasing cement from any suppliers?
Customers
Regions with too few suppliers
RMX Customers Although small bases, those
in Scotland and Wales claimed to experience this
issue the most
Asphalt Customers Those in the South East and Wales claimed to
experience this issue to a greater extent – Counties in
East Anglia had a particularly high number of
mentions
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
60%
11%
35%
75%
17%
20%
Any of large 5 suppliers
Other suppliers
Don't know/refused
RMX Customers
Asphalt customers
72
Base: All RMX customers (45) and Asphalt customers (36) who have experienced suppliers refusing to quote or supply Q Which suppliers refused to quote or supply in your area?
Reasons known for refusing to quote/supply?
RMX Asphalt Customers Customers Yes 89% 64% Varied by supplier 7% 6% No/don’t’ know 4% 31%
“there wasn’t a plant in the area “(RMX)
Reasons for refusing to quote/supply explained by
supplier?
“ Uncompetitive as too far” (RMX)
Suppliers refusing to quote/supply for RMX and Asphalt (RMX and Asphalt customers)
Where the reason was known, nine in ten respondents said it was explained to them by the supplier
Customers
“Price-fixing” (RMX)
“We were too far away” (asphalt)
“ too busy as they were committed to other work” (asphalt) N.B. Small base sizes
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
59%
15%
48%
55%
14%
36%
Any of large 5 suppliers
Other suppliers
Don't know/refused
RMX Customers
Asphalt customers
73 Any occasions when you
attempted to renegotiate?
Successful in renegotiating?
Suppliers giving longer delivery times for RMX and Asphalt (RMX and Asphalt customers)
RMX Asphalt Customers Customers Always 17% 3% Sometimes 66% 77% Never 17% 20%
Base: All RMX customers (66) and Asphalt customers (56) who have experienced suppliers giving longer delivery times for aggregates Q Which suppliers gave longer delivery times?
RMX Asphalt Customers Customers Yes 36% 54% No/don’t’ know 64% 46%
Customers
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
66%
17%
28%
70%
17%
23%
Any of large 5 suppliers
Other suppliers
Don't know/refused
RMX Customers
Asphalt customers
74
Suppliers quoting very high prices for RMX and Asphalt (RMX and Asphalt customers)
Any occasions when you attempted to renegotiate?
Successful in renegotiating?
Base: All RMX customers (119) and Asphalt Customers (110) who have experienced suppliers quoting very high prices for aggregates Q Which suppliers quoted very high prices?
RMX Asphalt Customers Customers Always 16% 10% Sometimes 68% 73% Never 16% 18%
RMX Asphalt Customers Customers Yes 47% 46% No/don’t’ know 53% 54%
Customers
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Expected effect of merger
6
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Base: All aggregate competitors (41) and RMX competitors (72) Q If the proposed joint venture takes place, what actions, if any would you take in relation to your … production?
76
Actions expected to take if Tarmac and Lafarge merge - Spontaneous (Aggregate and RMX competitors)
2%
2%
0%
2%
0%
2%
2%
83%
7%
10%
7%
7%
3%
7%
0%
3%
15%
64%
10%
26%
Increase price
Decrease price
Increase output
Decrease output
Open a new site
Close a site
Other
None - no action
Don't know
Any action
Aggregates Competitor RMX Competitor
Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
77
Actions expected to take if Tarmac and Lafarge merge - prompted (Aggregate and RMX competitors)
29%
2%
5%
59%
5%
37%
26%
7%
14%
43%
10%
47%
Increase price
Decrease price
Other
None - no action
Don't know
Any action
Aggregates Competitor RMX Competitor
17%
2%
0%
0%
2%
73%
5%
22%
36%
8%
14%
7%
4%
40%
11%
49%
Increase output
Decrease output
Open a new site
Close a site
Other
None - no action
Don't know
Any action
If the prices they charge for the same types of product you
produce increase
If the volumes of aggregates/RMX they produce
decreased
Base: All aggregate competitors (41) and RMX competitors (72) Q If the proposed joint venture takes place, what actions, if any would you take in relation to your … production?
Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Summary 7
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
79
Summary Purchasing Aggregate Customers tend to be buying a whole range of aggregates whilst RMX
Competitors tend to use primary only – in particular sand and gravel.
CEM 1 is purchased to a greater extent than any other type of cement by both Cement Customers and RMX Competitors - around two fifths only buy CEM 1.
Price was generally the most important factor when deciding what product to purchase, with quality the second most important factor. For RMX Competitors quality was as important as price for both cement and aggregates.
Switching Aggregate purchasers claimed it was easier to switch between primary and
secondary/recycled aggregates than between crushed rock and sand and gravel, but still only a third of Aggregate Customers said they could switch. Availability and customer requirements were mentioned as the main reasons for
not being able to switch.
Two fifths of RMX Competitors could change from CEM 1 to CEM 2/3, but only 15% of Cement Customers could change.
Quality of product was the key reason for not being able to change.
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
80
Summary Suppliers Customers tended to find it easier to obtain quotes from suppliers than Competitors for both aggregates and cement.
BUT Cement Customers were less likely to say it was easy compared with Aggregate Customers (57% compared with 77%).
Just over a third of Aggregate Customers (36%) are buying regularly from a lot of suppliers, but the equivalent figure for Cement Customers is only 4% and 52% are relying on ONE supplier. Quoting very high prices and not having enough suppliers who will deliver in their area was experienced by approximately two fifths of purchasers across all products.
Potential Impact of Joint Venture The majority of Aggregate and RMX Competitors would take no action regarding their own production should the joint venture take place
However, around one quarter would increase prices if the joint venture increased equivalent prices and a third of RMX competitors would increase their volumes if the JV decreased their RMX production.
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Appendix 8
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
15%
0%
7%
6%
34%
43%
12%
3%
3%
13%
32%
47%
National
Northern Ireland
Wales
Scotland
South East
North & West
Aggregates Customer
Asphalt Customer
Location of fixed sites/projects 82
Customers
Base: All aggregates customers (60), asphalt customers (270) and cement customers (28) Q in which county(ies) or regions is/are your fixed site(s) /projects located?
Bases too small to show for Cement Customers and RMX Customers as very few fixed sites
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Expenditure with Anglo American/ Lafarge in last 3 years
Base: All customers: Aggregates (292), Asphalt (252), RMX (270), Cement (67) Information taken from sample not survey and based on the product that the respondent was asked about and may not represent total spend with AA/Lafarge
Business spend on products (from sample)
83
Aggregate Customers
Asphalt Customers
45%
23%
28%
4%
Low Up £49,999 Medium £50,000-£99,999 High £100,000 +
Customers
46%
14%
40%
Low Up £49,999 Medium £50,000-£99,999 High £100,000 +
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Expenditure with Anglo American/ Lafarge in last 3 years
Base: All customers: Aggregates (292), Asphalt (252), RMX (270), Cement (67) Information taken from sample not survey and based on the product that the respondent was asked about and may not represent total spend with AA/Lafarge
Business spend on products (from sample)
84
RMX Customers
Cement Customers
34%
36%
30%
Low Up £99,999 Medium £100,000-£249,999 High £250,000 +
Customers
12%
10%
37%
41%
Low Up £24,999 Medium £25,000-£49,999 High £50,000 + Not available
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
12%
5%
37%
47%
5%
27%
29%
41%
Wales
Scotland
South East
North & West
Aggregates Competitor
RMX Competitor
Location of fixed plants 85
Base: All aggregate competitors (41) and RMX competitors (43) with fixed plants Q in which county(ies) or regions is/are your fixed plant(s) located?
Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Number of fixed sites
Q. How many fixed sites do you own or operate in the UK?
86 Aggregate Customers
Base: All customers who have fixed sites: Aggregates ( 60)
N.B. Question not asked of Asphalt Customers, RMX Customer base too small to report on as only 5% (13) have fixed sites
48%
10% 5%
30%
7%
Not stated
6+
4-5
2-3
1
Average 7
Although the base size of cement customers is small, the majority
only have one fixed site (around two thirds)
Customers
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Types of projects involved in 87
Base: Aggregate customers (212), Asphalt customers (270) and RMX customers (223) Q Which of the following types of project was the ... you purchased in the last 12 months used for?
71%
71%
63%
53%
43%
25%
51%
66%
41%
47%
51%
22%
80%
60%
60%
71%
34%
24%
Commerical projects
Local authority
Private projects
Industrial projects
Highways projects
Local roads
Other
Aggregate Customers
Asphalt Customers
RMX Customers
Cement Customers are buying cement for a whole range of
projects with the highest response being for industrial
projects
Customers
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Base: All Aggregate Competitors (41)
Volume of aggregates produced in last 12 months (Aggregate competitors)
88
Q. What was the total volume of .... your business produced/purchased in the last 12 months
Values shown in tonnes
21%
21%
58% High (75,000 or more)
Medium (50,000-74,999)
Low (Up to 49,999)
Competitors
Aggregate Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
15%
15%
17%
5%
59%
59%
39%
59%
44%
Primary Rail Ballast
Primary High Purity Limestone
Primary PSV
Primary dolomite
Primary crushed rock
Primary sand and gravel
Secondary
Recycled
All in one
Aggregates produced (Aggregate competitors)
89
Base: All Aggregates competitors (41) Q Which of the following aggregates does your business produce? Q Which of the following grades of primary aggregates does your business produce?
Aggregate Competitors
Grades Coarse 85% Fine (natural) 71% Fine (from coarse) 73% Other 34%
Prim
ary 15% only produce one type of aggregate
• Sand and Gravel had the highest mentions
85% produce more than one type of aggregate 24% only produce primary aggregates
Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Base: All Aggregate customers (272)
Volume of aggregates purchased in last 12 months (Aggregate customers)
90
Q. What was the total volume of .... your business purchased in the last 12 months
Aggregate Customers
Values shown in tonnes
33%
30%
37%
High (20,000 or more)
Medium (5,000-19,999)
Low (Up to 4,999)
Customers
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Base: All cement customers (67)
Volume of cement purchased in last 12 Months (Cement customers)
91
Q. What was the total volume of .... your business purchased in the last 12 months
Cement Customers
Values shown in tonnes
28%
45%
27%
High (7,500 or more)
Medium (500-7,499)
Low (Up to 499)
Customers
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Base: All RMX competitors excluding don’t knows (63)
Volume of RMX produced in last 12 months (RMX competitors)
33%
29%
38%
High (20,000 or more)
Medium (7,500-19,999)
Low (Up to 7,499)
Q. What was the total volume of .... your business produced/purchased in the last 12 months
Values shown in cubic metres
Competitors
RMX Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
35%
40%
26%
High (10,000 or more)
Medium (1,000-9,999)
Low (Up to 999)
35%
36%
29%
High (10,000 or more
Medium (1,500-9,999
Low (Up to 1,499)
Base: All RMX customers excluding DKs (198) and Asphalt customers excluding don’t knows (270)
Volume of RMX/Asphalt purchased in last 12 months (RMX and Asphalt customers)
93
Q. What was the total volume of .... your business produced/purchased in the last 12 months
Values shown in cubic metres
RMX Asphalt
Values shown in tonnes
Customers
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
66%
41%
51%
51%
47%
25%
Private projects
Industrial projects
Commercial projects
Local roads
Highways projects
Other
Types of Asphalt purchasing in last 12 months (Asphalt customers)
94
Base: All Asphalt customers (270) Q Which of the following types of project was the asphalt you ;purchased in the last 12 months used for?
Types of project being purchased for
Customers
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Ability to produce fine aggregates from coarse (Aggregate competitors)
95
Base: All aggregate competitors (41) Q Thinking about your primary aggregate production, could your business manufacture fine aggregates by crushing coarse aggregates? Q Have you done this in the last 3 years? Q In the last 3 years, approximately what proportion of your coarse aggregate production did you manufacture into fine aggregates? Q Is the cost of producing fine aggregates from coarse aggregates higher or lower than producing fine aggregates from natural sources?
Whether possible? Done in
last 3 years
Cost of manufacturing fine compared with
natural sources
The cost is higher according to
most aggregate producers (c.two-
thirds)
Yes Around four fifths of aggregate producers
either currently produce or could produce fine
aggregates from coarse
The majority of aggregate
producers have done this in the last
3 years (c.70%)
Yes
Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Ability to switch RMX production from fixed plants to volumetric trucks (RMX competitors)
96
Base: All RMX competitors (39) who do not have volumetric trucks Q Thinking about your RMX production, could you switch any of this production from fixed plants to volumetric trucks?
Whether possible? Reasons for not being able to switch RMX Production from fixed to volumetric trucks
The main reasons cited were • Too costly • Technical reasons due to process • Product not competitive
Approximately two thirds of RMX competitors
would NOT be able to switch production from
fixed plants to volumetric trucks
Competitors
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
47%
42%
44%
75%
17%
Spot market (one off purchase)
Long term contract
Following a tender
After receiving quotes
Rate cards
Base: All aggregate customers (292) Q What was the main way in which you purchased aggregates in the last 12 months?
97
Main ways of purchasing aggregates in the last 12 months (Aggregate customers)
Average number of suppliers
4
3
4
Customers
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
22%
52%
21%
48%
12%
Spot market
Long term contract
Following a tender
After receiving quotes
Rate cards
Base: All cement customers Q What was the main way in which you purchased cement in the last 12 months?
98
Main ways of purchasing cement in the last 12 months
Average number of suppliers
3
4
3
Customers
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
44%
45%
51%
79%
15%
41%
40%
41%
71%
24%
Spot market
Long term contract
Following a tender
After receiving quotes
Rate cards
RMX Customers
Asphalt Customers
Base: All RMX Customers (251) and asphalt customers (270) Q What was the main way in which you purchased RMX/asphalt s in the last 12 months?
99
Main ways of purchasing RMX and Asphalt in the last 12 months
Average number of suppliers
3
3
3
3
4
3
RMX Asphalt
Customers
Anglo American/Lafarge Merger Inquiry December 2011 GfK Custom Research
Importance of vertical integration (supplier produces own products)
100
Base: All RMX Customers (46) and asphalt customers (37 not using independent suppliers Q How important or unimportant is it to you that your ….. supplier is vertically integrated, that is they produce their own aggregates?
16%
11%
24%
7%
14%
11%
14%
24%
27%
43%
5%
4%
Asphalt Customers
RMX Customers
Very important Fairly important Neither/DK
Customers
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