Growth of a roadstone business
The company was originally formed by Edgar Purnell Hooley as the Tar Macadam (Purnell Hooley's Patent) Syndicate Limited in 1903.[2] A distinguishing feature of the new Tarmacadam product was that it contained cheap blast furnace slag, a by-product produced by steelworks, thus the company entered into long-term contracts with steelworks to ensure its supply.[3]
The business was secured in 1905 by Sir Alfred Hickman, who became its first chairman.[2] The company remained under the effective control of members of the Hickman and Martin family until 1979. There were Hickmans as chairmen until 1959; more significantly, Cecil Martin, the son in law of Victor Hickman, was appointed a director in 1923 and managing director two years later.[4] Cecil's son Robin followed him in turn, serving first as managing director and then chairman and chief executive from 1971 to 1979.[5]
Tarmac was first listed on the Birmingham Stock Exchange in 1913 and then the London Stock Exchange in 1922.[6] During the 1920s and 1930s, Tarmac had to cope with national strikes, recession and periods of intense competition. Nevertheless, the company gradually expanded its geographic coverage (particularly in the south east), increased its production of paving slabs and moved into road surfacing as well as supply.[7]
As with so many companies in the construction industry, the Second World War increased the demand for Tarmac's services, notably for surfacing the large numbers of airfields being built or modernised. By the time of its half centenary in 1953, Tarmac was processing over two million tons of slag per year, its road surfacing had developed into a significant civil engineering business, and its Vinculum subsidiary "had become one of the major precast concrete undertakings in the country."[8]
Under Robin Martin's leadership, Tarmac moved from being an important regional force to a national roadstone and contracting business. Acquisitions played a major role in Tarmac's growth. While leading the roadstone division, Martin had been responsible in 1959 for the acquisition of local competitor Tarslag and Crow Catchpole, which gave it a greater presence in the south east.[9] In 1964, now group managing director, Martin acquired key quarrying assets, including Cliffe Hill Granite, Rowley Regis Granite and Hillhead Hughes.[10]
In 1968, Martin engineered the three way merger between Tarmac, Derbyshire Stone and the Scottish Asphalt company, William Briggs, creating the country's "largest roadstone and construction group".[11] The group was briefly known as Tarmac Derby but the Derby name was later dropped.[12]
Expansion into house construction and contract sectors
Further acquisitions came during the 1970s and 1980s. Permanite, Britain's biggest roofing felt manufacturer, and Limmer, a quoted asphalt company, were both purchased during 1971,[13] while the 1973 purchase of Mitchell Construction (which had foundered on the Kariba Dam) strengthened Tarmac's construction division.[14] However, the acquisition which was to radically change the direction of Tarmac was McLean Homes, which was bought at the start of 1974.[15]
McLean was run by Eric Pountain,[16] a one time estate agent who had sold his own housebuilding business to McLean, later taking over as managing director via a boardroom coup. McLean had been bought to strengthen Tarmac's own poorly performing housebuilding division and the enlarged operation, now run by Pountain, was producing around 2,000 houses per year.[17]
Reorientation to heavy building materials and restructuring
However, the expansionary nature of the group did not leave it well placed to face the recession of the early 1990s. In particular, the housing division continued to invest heavily in land even though the market had peaked, leading to provisions of £132m in that division alone. Like his predecessor before him, Pountain was forced to step down as chief executive to be replaced by Neville Simms, previously in charge of construction. Inevitably, the emphasis moved away from housing in favour of construction.[17][21] While the quarrying and construction businesses proved to be considerably stronger,[22] rumours around this time claimed that Tarmac was actually looking to potentially sell its interests in these sectors as well.[23]
In October 1992, Tarmac acquired the privatised government agency PSA Projects to complement Tarmac Construction.[24]
Anglo American era and final years
During November 1999, Tarmac, which had been effectively consolidated around its roadstone and road surfacing businesses, accepted a bid from Anglo American Mining in exchange for nearly $2 billion.[34][35] Within months of the acquisition being completed, Anglo American launched a restructuring of the company, under which a new regional structure for its quarries, asphalt and ready-mixed concrete activities was adopted. At the time, it was stated that expansion in continental Europe would be a major focus area.[36]
In August 2007, Anglo American announced it would seek to sell Tarmac;[37] however, in February 2008, the company went on to report that it was putting the sale on hold, allegedly due to the economic consequences of the Great Recession.[38]
