Doing more with less the 2020 recipe for success

This year has been a strong one for the aggregate industry.

At Rock Machinery, we feel very fortunate to have been considered essential throughout the pandemic. Back around mid-March, there were serious concerns about our customers and us closing the doors. I remember Pennsylvania deeming aggregate as nonessential, and manufacturers supporting our industry were shut down.

I personally received phone calls around this time from some of our competitors who had manufacturers in Pennsylvania, asking if we could help provide wire cloth through our sister company, Durex Products, to keep them going. Thankfully, Pennsylvania’s shutdown was short-lived, and our industry remained essential throughout the nation.

2020 observations

The positive news in all of this: Aggregate producers in the Midwest have been telling us production is down slightly from last year, although profitability is up. Producers found quick cost-saving measures in existing operations and ran lean to bring down their cost per ton. Being profitable is extremely positive for the health of the industry.

We foresee large and small producers being conservative for the short term, until we see a clear direction for the future of the pandemic. Producers will continue to do more with less.

Inventory is important to have on hand in the current market environment. We see a significant need to maintain inventory levels to be responsive to our customer base. Customers are having a difficult time getting capital expenditures approved; most can only commit to equipment rentals when given the option to purchase.

We are also seeing an uptick in good used equipment sales. New equipment is harder to move, as many customers need more clarity on the economy to make a larger investment.

Additionally, we are seeing more customers requesting rebuilds. Customers are looking to make an investment to provide another three to five years of service life of their equipment.

To react to this, we invested heavily in our service capabilities. We added a new facility in late 2019, with an increased focus on repair capabilities. We see the repair business as a strong revenue generator, as many will choose repair over a new purchase.

---

Bryant Fazer is president and sales manager at Wisconsin-based Rock Machinery, a dealer offering crushing, screening and conveying equipment, as well as parts and service.