(Reuters) – Australia’s Boral Ltd said on Thursday it is exploring a potential sale, or a joint venture, as part of a review of its struggling North American fly ash business.
The move comes as the top Australian building materials maker is looking to exit the United States, in a retreat from its global expansion strategy that led to a hefty writedown in 2020.
Boral’s $1.8 billion acquisition of rival Headwaters in 2016 made the combined entity the largest supplier of fly ash in U.S. markets. However, since then, it has led to an impairment charge and earnings downgrades amid a soft housing market and a push towards cleaner forms of energy generation.
“We… remain confident in the long term demand dynamics for the industry, including significant incremental demand growth potential from the U.S. government’s proposed new infrastructure program”, Zlatko Todorcevski, chief executive officer, said in a statement.
Todorcevski was brought on-board by Boral in July last year, with a mandate to review the U.S. business.
New opportunities for supply exist from harvesting landfills and imports, he added, which is expected to more than offset the decline in fresh fly ash supply as the U.S. transitions away from coal fired power generation.
Boral said it has appointed advisors for the assessment and will provide an update at its full year results announcement in August, or earlier.
Reporting by Shruti Sonal in Bengaluru; Editing by Shailesh Kuber