Ibstock Brick Ltd. History

Leicester Road
Leicestershire LE67 6HS

Telephone: (44) 1530 261 999
Fax: (44) 1530 257 457

Wholly Owned Subsidiary of CRH plc
Incorporated: 1899 as Ibstock Collieries Ltd.
Sales: not available
NAIC: 327331 Concrete Block and Brick Manufacturing; 327121 Brick and Structural Clay Tile Manufacturing; 327991 Cut Stone and Stone Product Manufacturing

Company Perspectives:

The Ibstock Values describe the way we will work in Ibstock and the way we will behave towards our customers and colleagues. They are central to the type of culture we want to develop and are therefore essential to the achievement of our goals. They are: Promoting an environment of trust--a place where ideas are shared and contributions are welcomed; Responsiveness to customer needs--being seen as a company that will do everything it can to satisfy its customers; Measurement--making decisions based on fact, not just feeling and intuition; Ongoing improvement of all processes&mdashø satisfy and delight the customer. Key Dates:

Key Dates:

Ibstock is founded in 1825.
Company is incorporated as a private limited company and is named Ibstock Collieries Limited.
Company is renamed Ibstock Brick & Tile Company Ltd.
Ibstock offers company shares to the public.
Ibstock merges with Johnsen, Jorgensen & Wettre Ltd. and becomes Ibstock Johnsen Ltd.
CRH plc acquires Ibstock.

Company History:

Ibstock plc is a leading manufacturer of brick and paving products in the United Kingdom and operates manufacturing facilities in the United States and Europe as well. From its modest origins in early nineteenth-century coal mining, Ibstock grew to achieve a prominent and respected position in the brickmaking industry of the late 20th century. While Ibstock is perhaps best known for its clay facing bricks, the company also manufactures specially designed custom bricks, architectural terracotta, faience, and cast stone. In addition to manufactured products, Ibstock offers a building design service. The company was acquired by building materials conglomerate CRH plc in 1999.

Early Years as a Colliery: 1825--1900

Ibstock was established in 1825 when William Thirlby, a farmer and lacemaker, started mining operations on his land at Ibstock, near Leicester. Within a few years his business was prosperous, serving local customers from a plentiful bed of coal. By the 1830s the mining site, which had grown to over 100 acres, was producing supplies of fire clay and clay suitable for making brick. Over the next ten years a primitive brickworks was developed, but bricks were strictly a by-product of the primary business of the colliery, with only the lowest-quality coal relegated to brickmaking. The sideline grew over the years as mechanization replaced the old, time-consuming processes by which brick was made. Nevertheless, brick's continuing low status at the colliery was apparent in the company's sales figures for 1879: coal accounted for £27,000, brick for £2,991.

In the early years of its existence the colliery changed ownership several times. In 1875 Samuel Thomson became managing director, and the business soon became a family dynasty; under Samuel Thomson's son, also Samuel, Ibstock Collieries was incorporated as a private limited company in 1899.

The Increasing Popularity of Brick: Early 1900s

Brickmaking began to assume a greater importance at Ibstock at the beginning of the twentieth century, as bricks became a popular choice of the building industry. By the start of World War I Ibstock was producing some three million bricks a year. After the war, coal mining became an increasingly problematic industry. Miners' coalitions were demanding better working conditions and higher pay, and were prepared to back up these demands with strikes. The government, which had taken control of the country's coal mines during the war (though Ibstock, due to its smaller size, had remained independent), continued to impose price controls on the industry. In 1921, when the government returned the mines to their owners, workers' wages dropped dramatically, prompting further labor unrest. In addition, foreign competition, particularly from Poland and Germany, was intense.

As a result of these internal and external pressures, in 1928 Ibstock decided to close the pits and elevate the company's sidelines of brick-, tile-, and pipemaking to center stage. An appraisal undertaken in 1933 showed that the company was capable of producing three million bricks and five million tiles and pipes per year, which was adequate for a subsidiary product, but not for a primary line of business.

Ibstock set about creating a more extensive works with modern equipment, including a Monnier kiln (the first such to be used in Britain), a novel tunnel kiln that fired bricks loaded on cars that moved through the kiln. Requiring a substantial investment of £8,000, the technological advance increased production capacity to nine million bricks a year. Reflecting its new direction, Ibstock Collieries changed its name to Ibstock Brick & Tile Company in 1935.

World War II curtailed Ibstock's growth, and for a while after the war production was limited by shortages of labor and materials. By the 1950s, however, Ibstock was positioned for further expansion, which the company fueled with an aggressive sales strategy. Unlike other brick manufacturers, who sold their wares exclusively to building products merchants, Ibstock targeted brick users directly. By employing an active sales network to pinpoint architects, for example, and persuade them to use Ibstock bricks, the company was able to gain an edge on the competition.

Over the next few decades, Ibstock grew steadily by investing in further automation. In 1959 work commenced on a new 20-chamber Staffordshire kiln, bringing annual output to 41 million bricks, and the installation of yet another kiln soon afterward (bringing Ibstock's total to four) increased that number to 56 million.

Rapid Expansion in the 1960s and 1970s

During the 1960s Ibstock began expanding rapidly. Led by a fourth-generation scion of the Thomson family, Paul Hyde-Thomson (the family surname had been modified years before to include an earlier chairman's wife's maiden name), and flush with capital from a stock market flotation in 1963, Ibstock acquired in quick succession several smaller firms, including Himley Brick, Aldridge Brick, Tile & Coal Company, Burwell Brick, Shawell Precast Products, and Superbrix. The aggressive acquisition strategy gave Ibstock a greater range of products, increased its geographical representation, and enlarged its production capacity: by 1967 the company had six manufacturing plants and an annual capacity of 130 million bricks.

Not all the acquisitions proved successful. Burwell was unprofitable and was retained only until 1971; Shawell, renamed Ibstock Precast, was abandoned in 1977; and Superbrix, makers of bricks from inferior grade sandline, rather than clay, was in retrospect a poor choice for a company that prided itself on producing quality products.

Nevertheless, Ibstock continued to thrive, and in 1970 the company effected an important merger with the privately owned international wood pulp agency Johnsen, Jorgensen and Wettre. While the two companies had virtually no common ground, Ibstock wanted Johnsen's healthy cash reserves to finance further expansion, and Johnsen believed that Ibstock could invest that capital to the companies' mutual advantage. Thus the company became Ibstock Johnsen, with the two operating divisions kept separate.

Ibstock immediately embarked upon a new round of acquisitions, buying Roughdales Brickworks, North Eastern Bricks, Nostell Brick & Tile, and the Cattybrook Brick Company in 1971 and 1972. Because the company was reluctant to extend itself further domestically--fearing that in doing so it would compromise its position at the more exclusive end of the U.K. market--Ibstock looked abroad for further acquisitions.

The company's first overseas acquisition came in 1973, with the purchase of the Dutch facing brick manufacturer Van Wijcks Waalsteenfabrieken, followed closely by another Dutch company, Maatschappij tot Exploitatie van Steenfabrieken Udenhout, voorheen Weyers. These moves catapulted Ibstock to the position of sixth-largest brickmaker in the Netherlands.

The mid-1970s saw severe setbacks in Ibstock's home market, with labor unrest by British miners, OPEC's stranglehold on oil prices and the consequent energy crises, and the general economic downturn all having an adverse impact on Ibstock's domestic operations: profits were running approximately ten percent lower than normal. The company continued its overseas expansion, moving into Belgium in 1977 with the acquisition of Tuileries et Briqueteries d'Hennuyeres et de Wanlin and reinforcing its position in the Netherlands with the purchase of Steenfabriek De Ruiterwaard. With six factories in Holland, capable of producing 154 million bricks a year, combined with exports from its U.K. operation to fill Dutch orders, Ibstock controlled about seven percent of the Dutch market.

Ibstock next contemplated the potential rewards of the huge American market. In 1978 the company bought Marion Brick, based in Ohio, a significant purchase which boosted the company's turnover by a quarter and raised total production by one-half. Ibstock had an annual brick production of 400 million in the United States and Europe, and 250 million in the United Kingdom. The 1979 purchase of the Pennsylvania Glen-Gery Corporation increased the company's U.S. total to 500 million bricks a year and gave Ibstock approximately five percent of the U.S. facing brick market.

It quickly became apparent, however, that Ibstock's proud new empire was built on shaky foundations. Profits dwindled in Holland, evaporated in Belgium, and proved increasingly precarious in America. As Ibstock's chairman at the time, Paul Hyde-Thomson, later candidly explained: 'In the U.K. we were doing well but the rest looked appalling, with Holland still hemorrhaging and the U.S. in a mess. ... We did not have sufficient resources and, on top of everything, the market collapsed on us. I had made a mess of it. We had been too bold in purchasing more capacity than we had in the U.K.'

Restructuring and Renewed Focus in the 1980s

Ibstock sold its Belgian operations in 1980, but conditions continued to worsen in the company's other markets. Faced with falling demand and stiff competition in the United States, Ibstock offset cost increases by charging higher prices to customers and carrying on with production as normal, stockpiling its unsold excess. This strategy was completely at odds with initiatives put into practice by Ibstock's American rivals, who drastically reduced prices and closed unneeded capacity. Ibstock's strategy only exacerbated an already grave situation. At the same time, sales levels in Holland were also dropping severely amid fierce competition. In 1981 Ibstock showed a profit of only £175,000 on revenues of more than £60 million.

It was a boost to the company's morale, if not to its bottom line, that it won the Royal Society of Arts Presidential Award for Design Management in recognition of the high standard of its brickwork, its varied spectrum of products, its marketing successes, and its design advisory service. The honor did not alleviate the company's financial difficulties, however, and it came as little surprise to observers that Ibstock found itself vulnerable to a takeover bid. The would-be buyer was London Brick, then the leader in the U.K. brick industry. While many within Ibstock were in favor of the alliance, others were opposed, making the proposal divisive within the company. Matters were then complicated by the appearance of a second bidder, the building materials group Redland. Both offers were subject to approval by the Monopolies and Mergers Commission (MMC), and while that body deliberated, Ibstock acted.

The company managed to divest itself of its unprofitable Dutch operations. At the same time, the U.K. side of the business began to show improvement, and while activities in the United States were still problematic, there was reason to believe the market might recover in the future. In short, Ibstock redeemed its flagging fortunes so far that by the time the MMC approved an alliance with London Brick (Redland had earlier withdrawn its offer), the larger company had to increase its bid from the £27 million it had proffered in December 1982 to £51.7 million in August 1983. By then, however, Ibstock was in a far stronger position and felt confident that it could proceed independently: the bid was rejected.

Freed of its disappointing European operations and with the U.K. business reassuringly steady, Ibstock turned its attention to the United States, where it set about revitalizing its affairs through a new, streamlined management structure, a renewed emphasis on an active, aggressive sales force, and the creation of a more visible public profile. In pursuit of the latter goal Ibstock opened a brickwork design center in Baltimore, an idea taken from the company's similar, successful centers in the United Kingdom. A kind of brickwork multimedia resource headquarters, the center provided designers with information about new brick technology and design innovation via a reference library, design equipment, brick samples, conference and audio-visual facilities, and staff experts in architectural design and structural engineering. Ibstock offered technical seminars for designers and users of brick. The company soon opened other, similar centers in Washington, D.C., New York, and Philadelphia.

In the United Kingdom Ibstock was expanding again, building new design centers, commissioning new kilns, and widening its range of available facing bricks with the introduction of new colors, shapes, and textures. The activity paid off: by the end of 1984 total revenues, split evenly between the United States and the United Kingdom, were up by 25 percent to £110 million, representing the sale of 653 million bricks. Pre-tax profits, nearly double those of the year before, reached £12.4 million.

Encouraged, Ibstock returned to a policy of expansion. Its U.S. subsidiary Glen-Gery acquired Hanley Brick, New Jersey Shale, and Midland Brick, diversified into clay paver products with the purchase of Capital Concrete Pipe Company, and moved further into concrete products with the acquisition of Kerr Concrete Pipe Company and Gomoljak, a concrete block and masonry distribution company. By the end of the 1980s, Ibstock's American operation was the fourth-largest brick producer in the United States and accounted for approximately 20 percent of the company's profits.

New Challenges in the Early 1990s

From the relative triumph of the late 1980s, Ibstock moved to losses in the early 1990s; the company was £27.6 million in the red in 1992 and £18.7 million in 1993. Much of the losses was ascribed to reorganization costs and plant closures, particularly of the troubled Portuguese arm of the wood pulp business, Companhia de Celulose do Caima. The company began to divest itself of the wood pulp division, which had once been so lucrative that it could finance the rest of the group's expenditures. As late as the end of the 1980s the division was bringing in 30 percent of the group's profits, but by 1995 Ibstock had dropped 'Johnsen' from its name and announced its intention to dispose of its by then 56.3 percent interest in Caima because of the extremely cyclical nature of the woodpulp business.

In 1994 Ibstock was back in the black again, expanding both through the acquisition of Centurion Brick and Scottish Brick and through increased production. The following year the company secured a deal to purchase the brick business of Tarmac, a construction and building materials group. The move was expected to give Ibstock control of approximately 19 percent of the U.K. market and move its rank in the U.K. brick market up to second, behind Hanson plc, which possessed a 30 percent share of the market, and ahead of Redland plc, which held a share of about 17 percent. Ibstock agreed to pay £65.4 million for Tarmac's clay brick and paving stone operations.

During the first half of 1995, Ibstock's pre-tax profits soared to £14 million, a 222 percent increase over the £4.36 million reported for the same period of 1994. Despite such a strong performance, however, Ibstock warned that the second half of 1995 would not repeat the achievements of the first half--efforts to sell wood pulp operation Caima had been unsuccessful, and the housing market in the United Kingdom was in a state of decline, negatively impacting demand for Ibstock's products. The company made plans to cut back production and lay off some workers temporarily until demand increased.

Significant Changes in the Late 1990s

In spring of 1996 Ibstock announced plans to acquire the brick operations of building materials company Redland for £160 million. The deal, which involved 17 brick factories, four stone products facilities, and clay reserves to last 35 years, had the potential to catapult Ibstock into the lead in the U.K. brick market, with a market share of about 35 percent and the capacity to produce 1.3 billion bricks annually. The company's market share was knocked down, however, by the Office of Fair Trading, which asked Ibstock to sell or close factories that produced four percent of the market demand, amounting to about eight factories, in order to avoid a referral to the Monopolies and Mergers Commission. Still, Ibstock was able to maintain a market share of about 31 percent, placing it on equal footing with Hanson.

Though Ibstock became a market leader with its purchase of Redland's brick facilities, the company continued to face difficult times. In 1996 the prices of wood pulp declined significantly, demand for brick was at an all-time low, and Ibstock still had not managed to sell its stake in the Portuguese operation Caima. For the first half of 1996, Ibstock's pre-tax profits fell 82 percent, to £2.4 million. For the full year, pre-tax profits fell from £26.1 million in 1995 to £8.2 million. The company's shaky financial situation was accompanied by shakeups in management; both CEO Ian Maclellan and Anthony Hopkins, head of subsidiary Ibstock Building Products, were let go in November 1996.

The housing market began to improve the following year, and Ibstock's 1997 profits increased from £8.3 million in 1996 to £23.5 million. The construction market had not completely recovered, however, and the market slowed during the second half of 1997. Ibstock's brick sales improved only 4 percent over 1996 sales. The company was helped by a strong performance by subsidiary Glen-Gery as well as by cost-cutting measures.

Ibstock's future as an independent company appeared to be in peril in 1998 as large portions of the company's shares traded hands. In October Austria-based Wienerberger Baustoffindustrie, the largest brick manufacturer in Europe, acquired a 29.8 percent interest in Ibstock, fueling speculation of a takeover attempt. Wienerberger purchased the shares from Brierley Investments of New Zealand, which had first acquired a five percent stake in Ibstock in 1994. The following year it had increased its interest to 20 percent, and in 1997 Brierley upped its stake twice, to 25.1 percent in March and to 29.9 percent in July.

Then a white knight entered the fray, and Wienerberger suffered a blow in December 1998 when Irish building materials company CRH plc, with support from Ibstock, bought a 50.7 percent interest in Ibstock for £165.5 million. With little chance of acquiring Ibstock, Wienerberger agreed to sell its 29.8 percent stake to CRH in January 1999. CRH completed its full acquisition of Ibstock--CRH's largest purchase in its history--in early 1999. During 1999 Ibstock's head office in London was closed, and operations were managed from its Lutterworth, Leicestershire, office. Ibstock was combined with CRH's Forticrete concrete masonry and rooftile operations.

Ibstock wasted no time setting about strengthening operations after its integration with CRH. Ibstock sold Caima Ceramic e Servicos, its Portuguese ceramics operations, to Caima's managers at less than book value in early 1999. Ibstock had unsuccessfully searched for a buyer for the ceramics business for two years. Portuguese wood pulp arm Caima, which Ibstock had been attempting to sell since 1995, was finally sold in mid-1998. In July 1999 Ibstock expanded its brick-making capacity once again by buying the brick operations of Hepworth plc, a British heating and building products company, for £10.8 million.

Though Ibstock had been in business for more than 170 years by the end of the 20th century, it celebrated its official 100th birthday as Ibstock Building Products in late 1999. The company had weathered the storms of many decades and continued to prosper as one of the leaders of the U.K. brick market. Looking toward the future, Ibstock faced many new challenges and changes as a member of the CRH family. Ibstock was confident it could meet these challenges and planned to continue manufacturing quality products and remain at the top of the brick industry.

Principal Subsidiaries: Glen-Gery Corp. (United States); Ibstock Building Products Ltd.

Principal Competitors: Hanson Bricks Europe; Wienerberger Baustoffindustrie AG

Further Reading:

  • Buckley, Christine, 'Ibstock Hit by Shake-Up and Low Prices,' Times of London, March 21, 1997, p. 30.
  • Cassell, Michael, Dig It, Burn It, Sell It! The Story of Ibstock Johnsen, 1825-1990, London: Pencorp Books, 1990, 193 p.
  • 'CRH Pleased with Ibstock Acquisition,' Birmingham Post, September 1, 1999, p. 20.
  • 'Ibstock Builds Brick Sales but Chairman Wants More,' Birmingham Post, March 19, 1998, p. 34.
  • 'Ibstock to Sell Its Stake in Portuguese Forestry Group,' Financial Times, March 15, 1995.
  • McIntosh, Bill, 'CRH Acquires a 50.7% Stake in Ibstock for Cash,' Wall Street Journal Europe, December 22, 1998, p. 3.
  • Pangalos, Philip, 'Ibstock to Buy Tarmac Brick for Pounds 65m,' Times of London, May 13, 1995.
  • 'Reduced £19m Loss at Ibstock Johnsen,' Financial Times, April 20, 1994.
  • Stevenson, Tom, 'Ibstock Builds on Bricks with Redland Deal,' Independent, April 26, 1996, p. 17.
  • ------, 'Ibstock in Brick Talks with Tarmac,' Independent, April 7, 1995, p. 32.
  • Winnifrith, Tom, 'Double Blow Sends Ibstock into a Dive,' Evening Standard (London), September 25, 1996.
  • Wood, Martin, 'Wienerberger Left in Dark As Ibstock Agrees to Pounds 326m Takeover,' Birmingham Post, December 22, 1998, p. 17.

Source: International Directory of Company Histories, Vol. 37. St. James Press, 2001.