THE TARMAC name is set to disappear from construction after plans to demerge the contractor's aggregates and construction divisions were confirmed this week.
The long-awaited demerger will lead to a new corporate identity for the company's contracting wing which will come under the chairmanship of existing chief executive Neville Simms. No name has yet been chosen for the new firm.
The more profitable aggregates division will operate as a separate entity and retain the Tarmac name. It will be headed up by current chairman Sir John Banham as non-executive chairman with Roy Harrison as chief executive.
The announcement came as the construction division reported a £41.7M profit for the year to 31 December 1998, on a turnover of nearly £1.9bn, a margin of 2.2%. This compares to a margin of 11.8% in the aggregates division which reported a profit of £150M on a turnover of just under £1.3bn.
Simms said: 'I feel very attached to the Tarmac Group but I honestly believe this is the best move for Tarmac shareholders. Demerger will release into the market two well-capitalised companies with strong management, both having the potential to grow and build on their existing positions as industry leaders.
'I don't see why we will not win business of exactly the same size,' he said of the construction arm. 'Perhaps more work will be done in partnership to reduce risk.'
Full details of the two new companies will appear in a share holder document to be sent out shortly.