Group Performance by Region and Country

Annual Report 2012

In 2012, breaking a five year declining trend, combined U.S. construction spending grew by 9.9% to $855 billion.

Supported by pent-up demand, lower inventories, and a continued accommodative monetary policy, residential construction gained strength throughout 2012 and entered 2013 as the bright spot in construction. The upsurge in private residential construction spending translated to a 16.5% annual increase – the first increase since 2006.

Private non-residential construction increased in 2012 by an estimated 17.6% to $303 billion having been driven higher by investments in the energy and power sectors. On the other hand, public spending declined for the third consecutive year, falling 2.6% to $276 billion.

U.S.A. cement consumption increased by an estimated 8.9% in 2012 to 78.5 million tons – still more than 50 million tons lower than the record level set in 2005. A mix of temporary and permanent plant closures in the U.S.A. since 2008 has reduced capacity, but utilization rates are estimated to have remained below 65%, on average, in 2012.

 

U.S.A. Operations
The South Atlantic region (which includes Virginia, the Carolinas, and Florida) fared better than the U.S.A. as a whole, with cement consumption increasing 9.8% over 2011 levels. While the positive trend in volumes (albeit from a very low base) provided some relief, our U.S.A. business remained affected by a stressed pricing environment.

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Florida
According to the U.S. Geological Survey, cement consumption in Florida was 4.1 million tons in 2012, an increase of 14% over 2011. While better than in 2011, market demand was not high enough to keep utilization rates at satisfactory levels.

Aggregates and ready-mix concrete volumes of TITAN America also increased at rates commensurate to market trends.

 

Mid Atlantic
Cement consumption in Virginia increased by 11% to 1.7 million tons according to the U.S. Geological Survey. In North Carolina cement consumption improved by a more modest 5% to 2.0 million tons.

 

New York / New Jersey
According to the U.S. Geological Survey, cement consumption in the New York Metropolitan area was 1.2 million tons in 2012, an increase of 2% over 2011. TITAN America’s Metro New York business experienced a meaningful increase in demand, but a weak pricing environment.

 

Separation Technologies
Total sales of ProAsh®, derived from the Company’s proprietary ash beneficiation process, and ash from unprocessed sites increased, making 2012 a record year of performance for ST. Market demand remained strong, but limited ash supplies constrained ST’s output below its potential.

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