Assessing Tri-State’s future (or lack of one)

Brick industry professional Pete Cieslak does not have a specific company in mind but says a buyer somewhere outside the South could conceivably have an interest in acquiring the defunct Tri-State Brick & Tile.

It’s the kind of move that could get an outsider a foothold in the region, said Cieslak, president of the Brick Industry Association Southeast Region.

“I would not be surprised at all to see a large company or medium-size company come in,” he said. “It could be someone from outside the region wanting to get into the Southern market.”

The 67-year-old family-owned Tri-State Brick & Tile’s Jackson plant shut down earlier this year after Trustmark National Bank foreclosed on it. Tri-State, which sold masonry materials for residential construction but specialized in brick for commercial and institutional construction, took on around $10 million in debt as it automated operations during the mid-decade building boom.

Representatives from brick companies in New Orleans and Memphis attended the foreclosure auction for Tri-State on the steps of the Hinds County Courthouse July 10. That they declined to bid should not be taken as a sign of no interest, said Walter Becker, a Jackson commercial real estate broker whose family previously owned a brickyard in Brookhaven.

“It’s a natural progression for them to take advantage of Tri-State’s demise,” Becker said. “Somebody has got to come back into the brick business here.”

At its peak, Tri-State had about 130 workers and sold its products in 19 states. About 50 workers remained as the foreclosure neared, COO Jimmy Gallaher said. “We had reduced production way down.”

Gallaher has stayed on at the brickyard helping Trustmark sell of the remaining inventory of brick and tile.

He said potential buyers have shown some interest but could not elaborate. “This is a big deal. It’s not going to be done quickly.”

Gallaher is most likely correct, judging by continuing slack demand for building materials.

Softness in the brick market has already led to a succession of Mississippi brickyard closings and left the state with only one brick manufacturer, the 122-year-old Columbus Brick Co. “Before the downturn there were eight brick companies in Mississippi,” said Ed Thebaud, general manager of Columbus Brick Co.

In addition to Jackson, brick-making operations have closed in Louisville (plant razed), Macon (plant razed), Corinth, Byhalia and Holly Springs (two plants).

The closings occurred as the $5 billion industry nationally sustained sales losses of 4.5 percent from 2007 through 2012, according to the Clay Brick & Product Manufacturing Market Research Report

In the nine-state Southeast region of the Brick Industry Association, the volume of brick shipped has dropped by two-thirds, said the association’s Cieslak. “Some of the bigger companies that have multiple locations have shut down one or two.”

The Product Manufacturing Market Research Report projects an industry turnaround in the next five years, propelled by increases in both housing starts and the value of non-residential building construction.

But if building does rebound throughout the region, a revived Tri-State is likely to have a new competitor in the commercial and institutional materials market. Boral Brick, an Australian company with U.S. headquarters in Atlanta, is revving up commercial brick manufacturing at its Bessemer, Ala., location, according to Thebaud.

The Columbus brickyard manager declined to assess the market viability of Tri-State or the likelihood of it getting a new owner. He did predict, however, that any rebound the nation sees in residential and commercial building would start in Mississippi and elsewhere in the South. “No doubt about it,” he said.

“How many companies do you know that are moving their headquarters to Toledo or returning to Minneapolis?”

Meanwhile, neither Cieslak nor Thebaud expect the absence of a brick manufacturer in Central Mississippi will bring higher costs to area builders — at least until the high availability of brick comes down enough to end the buyer’s market.

For now, builders can obtain plenty of brick from Columbus or brick-makers in Alabama, Cieslak said. “It’s not going to increase significantly because of the moderate distance,” he said. “I think anybody who wants to get some brick from any of the states can get a price they can live with.”

Brickyards around the South have typically sold other companies’ bricks as a way to meet the demands of builders for particular makes and styles of brick, Cieslak noted. “Everybody is a distributor for everybody.”

Thebaud said describing today as a buyer’s market is “an understatement.”

But the Columbus Brick Co. is faring well during the sustained building slump, producing masonry materials for buildings at the University of Mississippi, Mississippi State, Southern Mississippi University, University of Tennessee and “a lot of banks,” Thebaud said.

The company even ventured into Texas to provide bricks for a high profile project — construction of the George W. Bush Presidential Library in Dallas.

Meanwhile, Gallaher is looking forward to seeing workers once again come through the front gates at Tri-State Brick & Tile. “We’re being prayerful we’re going to get a new owner and start rocking and rolling again,” he said. “We’re prepared to start back up at anytime.”

>>Read more about Tri-State collapse

>Family fights for control of Tri-State Brick & Tile

>Everyone thought things were running smoothly for Tri-State

>Trustmark feels pain of $10 million in bad debt after Tri-State Brick’s demise

 

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