Polaris Materials Corp. announced that Polaris and its subsidiary Eagle Rock Aggregates Inc. (ERA) have provided notice of their election not to renew the strategic alliance agreement and related joint co-operation and development agreements with Cemex, Inc.
The agreements will now terminate in accordance with their terms on Sept. 25, 2017. ERA and Cemex remain bound by the terms of an aggregate supply and distribution agreement, which provides for certain exclusive marketing and distribution rights in parts of the Northern California market, and which has an initial term expiring on Sept. 25, 2027.
The strategic alliance agreement originally provided for high-level co-operation in the development of new markets by both companies, aided by detailed terms for sharing the risk and reward of joint investment opportunities via the joint co-operation and development agreements.
However, changes in market conditions since 2007, Polaris’ independent development and operation of its terminal in Long Beach, Calif., and development of the Fine Sand product, as well as Cemex’s recent decision to sell certain assets in Washington and Oregon, have removed many of the factors which led to the creation of the strategic alliance.
The company sees the potential for a number of compelling business opportunities in markets on the West Coast including Seattle, Portland and Southern California, including San Diego, as well as further opportunities in Hawaii and other areas.
The termination of the strategic alliance agreement and the joint co-operation and development agreements provides Polaris with improved strategic flexibility to achieve its objectives in these markets, according to the company.
“Cemex has been, and continues to be, a valued partner to Polaris in the Northern California market, and we look forward to continuing to work closely with them, and advancing our joint business interests in this region pursuant to the aggregate supply and distribution agreement,” Polaris said.
The conclusion of the strategic alliance agreement does not prevent the companies from working together in the future in other markets where a relationship is mutually beneficial.