Confidence builds around capex (Part 1)

By |  August 20, 2021

The following transcripts were edited from two concurrent discussions at this year’s Pit & Quarry Roundtable & Conference. The transcript from one session begins in this post. This conversation was edited for brevity and clarity.

Photo: PamElla Lee Photography

The current lack of equipment availability is a serious issue, says Scott Alexander of Arcosa Aggregates. Photo: PamElla Lee Photography

P&Q: As COVID-19 injected a great deal of uncertainty into the 2020 business environment, aggregate producers everywhere slowed their capex planning dramatically. At the same time, the pandemic created an opportunity for operations to reevaluate production and business processes. Producers: How have you leveraged new equipment, technology or services in the last year, and how has the pandemic shaped the evolution of your operations? How are you balancing productivity with safety? Also, if your capex plan was sidelined in 2020, is it back on in 2021? Equipment suppliers: What observations can you share of the 2020 and 2021 capex environment? Are you seeing activity pick up this year? Additionally, are you reshaping your equipment, technology or service offerings in any way moving forward?

SCOTT ALEXANDER (ARCOSA AGGREGATES): We, like everybody, did an immediate, complete halt for a period of time – whether that be 60, 90 days, maybe a little bit longer – but we did catch up. So what we budgeted for capital spending, we did spend. The coming year, our budget is up. Yes, we had some delays in parts – four to six weeks additional. Where COVID impacted us was on our new equipment. We wanted to buy a new plant, we had it in our budget and on order, but it got delayed and we needed the plant. So, we went out to the used market and got a used plant instead of a new one. Even though we were set up with a supplier to get it, we had to pull the plug because we couldn’t wait that long. The availability and the timeframe being extended out has really been the biggest impact we have. It hasn’t been the amount of money we’re spending. It’s just availability.

Photo: PamElla Lee Photography

Says Scott Dickson of Hanson Aggregates Southeast: “We had a bit of a hiatus on spending, but by the end of the year we spent exactly what we planned for 2020.” Photo: PamElla Lee Photography

SCOTT DICKSON (HANSON AGGREGATES SOUTHEAST): I would echo Scott’s comments. We had a bit of a hiatus on spending, but by the end of the year we spent exactly what we planned for 2020. I do think that the time spent at home forced me to be more ready to spend money in 2021. And certainly the lead times we’re seeing from vendors are longer than we’ve historically experienced. So, I think it’s going to force us into longer planning horizons if you want to get to the plant on time and not miss that window of opportunity. On a go-forward basis, based on comments about the potential growth of the economy, I would foresee more significant expansion projects.

RYAN LAYTON (JOHN DEERE): We continue to see a lot of investment in factory capacity and factory efficiency. We’re expanding where we need to and then driving technology, safety and efficiency into those operations. But for us over the last year, the huge investment has been in really trying to drive the organization to more of an online manufacturing company – huge investments in technology. It’s to the point where we’ve got the massive corporate restructuring to drive this investment in technology, and we see that as a very important thing for all the industry going forward.

Chris Taylor


CHRIS TAYLOR (NORTH AMERICAN MINING): One interesting thing we saw, specifically on the direct line side of our business, was that 2020 was a very busy year planning new projects. Existing operations were pretty steady and had a really good year. New projects, where there wasn’t capital spending, effectively got delayed or postponed. So, we had a lot of plans in place at the beginning of 2021. All of those projects finally came through again, so there’s been a lot of activity at the beginning of this year with new capital and new projects.

SHELDON SHEPHERD (TECWEIGH): We service the aggregate industry but also other industries, and it was nothing like I’d ever seen. After COVID, business was somewhat slow. We’d get spurts here and there and some projects. But you could tell capital spending across the board was being reduced. In the late summer/early fall, we actually were discussing the possibility of – in a management meeting – reducing hours, maybe even temporary layoffs of people. Four weeks later, we’re dealing with overtime and trying to hire people. It was crazy. It was like a light switch had turned on, and it’s been that way since.

SEAN MARTELL (PRECO ELECTRONICS): Last year for us in North America, the on-road and off-road bids that were requested for radar on capex projects really fell apart. Customers just pulled out and said: ‘No, we’re not spending money this year.’ It’s really been a big turnaround from that. It’s been very positive.

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