The construction aggregates industry has seen wave after wave of consolidation, with fewer and fewer operators controlling ever increasing shares of local and regional markets across the U.S. As the positions of the industry leaders have grown in these markets, so too have their profits. The question is this: is this sustainable, or will the excess profits in the aggregates industry succumb to economic theory?
Building a top-notch team is critical to the success of any company, and the best producers in the industry are adept at attracting high-caliber sales and operating personnel to manage day-to-day aspects of the business. These companies deliberately ensure that the people performing and supervising these functions are talented, committed, and well-trained. But the construction materials industry is complex, requiring attention to disparate factors that influence not only the day-to-day results but also the long-term performance of the business. So how can companies optimally manage critical long-term functions like environmental, geology, mine planning, and engineering? The right approach can determine if your business will thrive in both good times and bad.
Very few operations feature a life of water balance. In most operations there is too much, too little, too deep, too shallow, too dirty, acidic, alkali—and often many of those in combination. In these instances, great operators make the best with the worst, understand their risks, have contingency plans, and work with high quality environmental managers, engineers, and teams to ensure best use of the sensitive and limited resource that is water. This article looks at permitting, too much water, too little water, and wetlands management to show why great operators are also green operators.
New Frontier Materials recently announced the acquisition of the asphalt and aggregates assets of Fred Weber, Inc. The acquisition included 20 Fred Weber locations and will make New Frontier the largest supplier of aggregates and asphalt to St. Louis and the surrounding area. Experienced management paired with sophisticated patient capital and a sector with excellent long-term fundamentals is a winning combination.
PCA recently released forecasts for each of the major regions of the country, along with several sub-regions. Several consistent trends emerged, as well as a few concerns. Here are a few takeaways and things to watch.
In today’s zero-sum culture, in which it often seems there must be a loser for there to be a winner, win-win seems like a quaint relic from a bygone era. But is it? The first half of 2021 has seen a flurry of large transactions that attracted headlines throughout the industry. From a distance, some of these certainly appear to fit the zero-sum mold. But what about Vulcan’s pending acquisition of U.S. Concrete? Is there a clear winner?
If your goal is to be a green producer, effective mine planning is a necessity. A traditional mine plan includes technical and geologic details that enable efficient extraction of the deposit; a green mine plan goes a step further, optimizing the use of the entire property. In total, end use planning, mine planning, and excavation monitoring allows a green operator to maximize recovery, reduce the impact of land consumption, and recycle the property. These should be the goals of every green producer.
Over the past several weeks, industry companies released their results for the first quarter of 2021. Not only did most organizations report record results, but the accompanying commentary reflected strong balance sheets, recovering markets, and markedly optimistic views for the balance of 2021 and beyond. Read here for what this means for acquisitions activity in the industry.
As we move into a post-COVID era with regular reminders of Green New Deals, electric cars, solar power, wind farms, sustainability reports, net zero carbon goals, and the like, our performance conversations are changing. The idea of “green” is becoming a larger and larger topic in the business. Consider what being “green” really means. Does it not refer to a clean and efficient use of resources? Maximizing valued output and minimizing consumption and non-valued outputs? A green producer is just a great producer...and they should be celebrated.
Replacing reserves with greenfield developments or acquiring existing aggregate operations is important to the long-term viability of your aggregates business. Unfortunately, we see many cases in which projects are crippled or doomed because fatal flaws with the geology are missed or ignored. In the aggregates industry, we cannot mitigate all the risks. The true nature of the geology is hidden below the ground, and the information needed to move forward with confidence costs time and money. But it is worth it. A well-planned geologic investigation, conducted by a professional who is experienced in aggregates, can identify critical risk factors that could threaten the success of the project...and ultimately save you millions of dollars.