Assessing all things aggregates
The following transcripts were edited from two concurrent discussions that took place June 8 at the 2022 Pit & Quarry Roundtable & Conference. The transcript from session one begins here, while the transcript from the other starts on page three.
Although the industry is full of potential at the moment, McLanahan Corp.’s Mark Krause says people are concerned about their ability to ultimately deliver. Photo: PamElla Lee Photography
P&Q: How would you characterize demand for aggregates at this moment? How busy are operations? Producers: What are your tonnage expectations this year, and how do those compare to 2021? Which construction markets (i.e., nonbuilding, nonresidential and residential) are fueling your 2022 materials demand? Do you expect the Infrastructure Investment & Jobs Act (IIJA) to impact your business this year? Are you concerned about the possibility of a recession this year or next year and, if so, might infrastructure be somewhat recession proof? Are your markets experiencing construction material shortages at this time, or do you expect shortages to surface in the months to come? For those of you shipping on rail, what has your experience been like amid reports of serious service issues? For everyone: What sort of activity are you seeing across the industry on the mergers and acquisitions front? Also, what is your general industry outlook for the rest of 2022? For 2023 and beyond?
CORY DANNER (ARCOSA AGGREGATES): As far as volume goes, we’re just as busy as we’ve always been. I think growth between 2021 and 2022 was probably in the low single digits. As far as end markets and what’s driving it: It’s everything. With residential, there’s a bit more of that than anything. On IIJA, we haven’t really seen any 2022 impacts. I’m kind of expecting more [impact] in 2023 and beyond as people work through their bid processes.
Taylor
CHRIS TAYLOR (NORTH AMERICAN MINING): Our production demands have kind of skyrocketed over the last few years. We work for a variety of customers as contract miners. We’re seeing record forecasts for this year and beyond.
SCOTT ALEXANDER (KILGORE COMPANIES): Speaking for out in the Western region, the volumes for our business have been pretty significant. It’s where demand is more than supply. We had to bring several outside contractors in to help us meet supply because we really haven’t had the manpower. It hasn’t been an equipment issue; it’s been a personnel issue – finding workers. It’s probably the No. 1 issue we have.
MARK KRAUSE (MCLANAHAN CORP.): Who could have forecasted this, right? We came into ConExpo-Con/Agg 2020 and we were all excited. We were a little nervous about what ConExpo was going to look like. Then, COVID hit and everything stopped. Nobody knew what that was going to mean.
So we start scaling back. As a manufacturer, we started pulling stuff from our subcontractors. Well, then business picked up again. We all realized we were an essential business, and so things picked back up. And things were actually pretty good.
But the problem is finding workers; also subcontractors. You want to go back to your subcontractors, but they have other work now. They’ve found other things to do. So you’re either going to pay the price, or you’re going to figure some other place to go to get it done.
If you look at the state of the industry, there’s so much potential with all of the highway funds and the different things that are going to happen. But at the same time there’s concern about whether we can deliver.
Says Arcosa Aggregates’ Cory Danner: “I think growth between 2021 and 2022 was probably in the low single digits.” Photo: PamElla Lee Photography
WILL PIERCE (SCHURCO SLURRY): I feel like we’re very much in a state of flux. Things are good. We’re all producing a lot. It seems like our customers are producing a lot. We are producing a lot as a manufacturer.
But, at the same time, it’s not just headwinds. There are tailwinds, headwinds, crosswinds – and it’s all kind of happening at once. We’re kind of reacting to it and getting in front of it with some forecasting. But to a certain degree, you’ve got to be nimble right now in what’s going on and adapt and react to what’s happening as it’s happening.
MATTHEW VALLE (HAULHUB TECHNOLOGIES): We’re going through a massive transformation in the construction sector for the digital future. Meeting the next generation of talent where they are with iPhones and smart devices – and shining the light on some of the cool things that this industry is doing – is going to get kids excited about coming into the industry.
DALE BIANCO (U.S EQUIPMENT SALES & RENTALS): We distribute portable aggregate equipment. I’ve never seen in any industry prices change 5, 6 percent every quarter. It’s understandable. The main input is steel, and we’ve got steel shortages. But it’s not sustainable. Every quarter we’re going: ‘That’s got to be the last [increase]; they’ve got to come back with 2 percent or something.’ But nope, it’s another 5 percent [and] another 5 percent. So it’s impossible for us to predict. We’ve got customers now going: ‘That’s a lot of money. I think I will rent.’
SHELDON SHEPHERD (TECWEIGH): Producers are producing full out right now. The plants that we visit have a lot of trucks going out. Everybody seems to be doing well. But this industry, over a number of years, will tend to go through phases of expansion. When we go into the new phase of expansion, that’s really going to be affected by availability and things like supply chain, inflation and lead times for equipment. And that’s everything, including automation, equipment like conveyors to just about anything you get [for] a plant.
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