Brick manufacture Ibstock Plc says it is pushing on with a £60 million investment in two sites in the West Midlands as the market recovers from the pandemic.
The Leicestershire-based business said it is investing in its Atlas site, near Walsall, in the West Midlands and another site at Aldridge, a few miles up the road.
The two sites will have capacity to make 115 million brick a year.
Last summer the business had said it was holding back plans to put £45 million into a new factory at the Atlas site – able to make 80 million bricks a year – after suffering big losses due to the first lockdown.
In a trading update for the most recent three month period it said the re-developed Atlas plant was going ahead ago and was expected to be the first net zero carbon brick-manufacturing facility in the UK.
Ibstock said the current financial year had started well with trading modestly ahead of expectations, and the board remaining confident of prospects for the year.
It said there had been strong demand from new-build housing and the repairs, maintenance and improvement side of the markets.
It said the housebuilding sector looked like it would stay strong on the back of the undersupply of new homes which was expected to continue over the medium term.
It said: “As the residential housing market recovers, domestic demand for clay bricks will continue to exceed that available from domestic manufacturing capacity.
“Against this backdrop, the group is recommencing the project to redevelop its Atlas site in the West Midlands, replacing the existing mothballed facility with a new state-of-the-art wire cut clay brick factory.
“The Atlas project has been revised and expanded since the announcement of the original proposal in early 2020, with an increase in capacity and further significant enhancements to deliver improved environmental performance.
“The project also includes investment to upgrade and expand capacity at the adjacent Aldridge brick factory.
“The new Atlas factory will have outstanding sustainability characteristics, incorporating state of the art technology, with significantly reduced process emissions, resulting in a major reduction in carbon intensity.
“Ibstock believes that, in combination with a planned investment in high quality environmental projects to offset the remaining carbon, the Atlas site will be the first net-zero brick-manufacturing facility in the UK.
“In total, the redeveloped facilities will deliver capacity of 115 million bricks per annum, equivalent to a net increase in Ibstock Clay’s network capacity of 75 million bricks, after taking into account the existing capacity of the (mothballed) Atlas factory.
“Together, the Atlas and Aldridge factories will benefit from the existing strong transport infrastructure, and high quality clay reserves at the site.”
It said full production from the two sites was expected by 2024.
Ibstock chief executive Joe Hudson said it had been an encouraging start to the year.
He said: “With the market outlook now clearer, we are refocusing on growth.
“Redevelopment of our wire cut brick facilities in the West Midlands will deliver a significant capacity expansion, further demonstrating our leadership in the clay brick market, which is expected to continue its long-term growth over time.
“The project is another tangible example of our commitment to the net zero carbon journey and provides a great exemplar of British building products manufacturing.
“We have a number of additional organic investment opportunities under evaluation and expect to update shareholders on these as the year progresses.”
Ibstock plc’s main products are clay bricks, brick components, concrete roof tiles, concrete substitutes for stone masonry, concrete fencing and pre‐stressed concrete.
Its Ibstock Clay division is the leading manufacturer by volume of clay bricks in the UK with 19 manufacturing sites and 23 active quarries.
It opened a new brick factory in Leicestershire in 2018 that upped its annual capacity by around 100 million bricks.
Ibstock Concrete makes roofing, walling, flooring and fencing products, along with lintels and general building products, with 15 manufacturing plants.