When I joined the cement industry in September 1973, the company I joined was the Associated Portland Cement Manufacturers, Ltd. It changed its name to Blue Circle a good while later, in 1978. I always had the feeling that its name informed its operational philosophy: these people liked to think of themselves as manufacturers.
APCM was founded in 1900, back in the Gilded Age, when the ruthless elimination of competition and the formation of monopolies was considered the sacred duty of every capitalist. The prospectus of APCM pulled no punches, its primary aim being to prevent falls in prices during periods of low demand, by eliminating competition.
The mid-1890s had been a period of depression in the industry. Exports, which had always insured the industry against the vicissitudes of home demand, had seriously diminished. While British manufacturers blamed this on "unfair" competition, overseas customers were clear about the reason. An American customer said:
When English manufacturers were informed of the superiority of German cements, they ridiculed the statement and declined to entertain the suggestion that they should institute similar improvements in their own manufacture, saying with characteristic English manner that they were following exactly the same methods employed for the past thirty years and they could see no reason for changing.
The picture emerges of an industry that regarded its methods as definitive, and offered its product on a take-it-or-leave-it basis. During the 1890s, they left it. No doubt, this attitude was even more pronounced when dealing with home customers. In 1894, Charles Spackman gave a more measured analysis:
I regard the present time as, in many respects, a very critical period in the history of the cement trade. Our own country, the original seat of the manufacture, has been distanced in certain directions in consequence of the superior scientific skill and the energy of foreign rivals. The supremacy we have so long enjoyed has undoubtedly been to some extent wrested from us by the products of Continental industry and enterprise, and in the absence of some united action and some intelligent leading, our manufacturers are threatened with a competition which they are not adequately armed to encounter. It would be idle on my part to deny that I dread times of even greater depression than those we have hitherto experienced in this important industry, and I am convinced that nothing but the formation of a powerful confederation of cement producers and cement users, such as exists in many of the most enlightened countries abroad, will extricate us from the difficulties by which we are surrounded.
In 1900, although the market had recovered somewhat, the glittering prizes of a complete monopoly remained evident:
- Elimination of price competition
- Elimination of overproduction
- Ability to exclude imports
- Ability to force manufacture-driven product standards upon the market
As it happened, the launch of APCM failed to achieve its monopoly objective, and competition-driven low prices made the Combine un-profitable. The extent of the failure is quantified in another article. Undaunted, a second attempt at monopoly was made in the form of the launch of the subsidiary BPCM in 1911. Once again, the objective was clear. Cook quotes J. W. Philipps, addressing O'Hagan:
. . . "we have been given to understand that if you were given all the capital you required you were certain you could bring about a complete amalgamation of the cement trade."
She goes on to say:
O'Hagan appears to have stressed the fact that the outlook was poor unless an amalgamation was achieved.
The launch of BPCM similarly failed to achieve this objective. While there might have been extenuating circumstances to excuse the failure of the first amalgamation, the failure of the second gives the impression that the common cause of both was the patronisingly dismissive attitude of the Thames and Medway operators to outsiders, leading to a failure to make due effort to rope them in. Bearing in mind that there is no longer an industry in the Thames and Medway area, the ultimate superiority of the "outsiders" is today well-demonstrated.
Although the second amalgamation only gathered in a little under 80% of the industry (subsequently subsiding to a fairly static 60-65%), APCM's dominant position gave them, for the ensuing 90 years, an unrivalled power enabling them to aspire, at least, to the benefits of monopoly mentioned above. And when anti-trust legislation put paid to any further moves in that direction, the company still retained a peculiar mindset exemplified by its name.
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