Solid Cement

Few investors regarded the cement industry as profitable--until recently. But in last week's bull market, cement stocks were holding their own with aircraft and oil. Riding the construction boom, they have doubled in price in the last year, while extra dividends and stock splits have become common. In the last month alone, North American Cement Corp. split its stock 4 for 3 and General Portland Cement split 2 for 1.

There was plenty of reason to be enthusiastic about the industry. The 157 active U.S. plants are operating at 90% of capacity and producing 21 million bbls. of Portland* cement monthly. Last year they shipped 280 million bbls., 20 million more than in 1953 and 80 million more than in 1949. And with a record-breaking $39.5 billion worth of construction scheduled in 1955, industry leaders are embarking on big expansion programs. Lehigh Portland Cement Co. of Allentown, Pa. is spending $15 million to boost its annual capacity by 3.000,000 bbls.; Universal Atlas Cement Co., a U.S. Steel subsidiary and the biggest producer, is spending an estimated $20 million on its Buffington plant in Gary. Ind., which will be the largest new production unit built in the past 15 years; New York's Lone Star Cement Corp. will spend $14 million. Other companies that are busily expanding: Ideal Cement Co., General Portland Cement Co., Peerless Cement Corp., Medusa Portland Cement Co. and Keystone Portland Cement Co.

The industry has come full circle since the '20s, when boom talk lured it into its last expansion. In the mid-'30s, Depression winds cooled its kilns; as private and public construction slumped, plants all over the nation shut down and production dropped to less than 30% of capacity.

After World War II the industry could hardly keep up with demand. Its production shot up from 101 million bbls. in 1945 to a then alltime high of 203 million in 1948. Additional momentum came from research into new products and processes. Among them:

P: Paints and dyes for concrete.

P: A mixture of concrete light enough to float but strong enough to support bridge structures.

P: A copper and cement compound to keep the floors of industrial kitchens and barns sanitary.

P: Highway concrete that contains air bubbles, permitting water that seeps in and freezes to expand without cracking or chipping the road surface.

P: A cement that can be mixed with soil to make airport runways, driveways, canal linings and dam facings.

The most solid base for the new enthusiasm and optimism of cement men is President Eisenhower's proposal for a $101 billion, ten-year state and federal highway program. It is the biggest reason why they are ordering enough rock-crushers, conveyor belts, tube mills, rotary kilns and other equipment to boost the industry's capacity by about 30% in the next five years.

* A mixture of lime, silica, alumina and iron oxide, first made in 1824 by an English mason, Joseph Aspdin. The greyish color of the compound, cooked in a kiln, reminded him of stone quarried from the Isle of Portland off the British coast.

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