Reflecting on 2020 at the Pit & Quarry Roundtable (Part 2)

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

P&Q: Take us through the roller coaster that’s been your last 18 months. Producers: How was business just before the onset of the pandemic, and what transpired for your businesses in the months thereafter? How would you characterize 2020 as a whole, and how have you fared thus far in terms of 2021 production? Which construction markets are driving aggregate demand, and which are keeping you up at night? What’s the status of your state Department of Transportation – is it in a position to fuel jobs as you’d typically expect? How has aggregate pricing been impacted? Equipment suppliers and others: Similarly, tell us about your 2020 and early 2021 experiences as they relate to the aggregate industry?

JOHN GARRISON (SUPERIOR INDUSTRIES): As far as 2020 and thus far in 2021, it’s been a roller coaster. I think everybody had good expectations going into ConExpo-Con/Agg last year. There are usually a lot of things to follow up on and a lot of excitement, and that was obviously gutted by the pandemic and COVID. So 2020 was a rough year for us. I think everybody kind of learned how to rightsize the business. But, right out of the gate in 2021, demand was hot and heavy.

JASPER STEM (NORTH CAROLINA AGGREGATES ASSOCIATION): The problem we had in North Carolina was a financial one going into the pandemic. After that, it was a perfect storm coming into play for us in North Carolina. We had hurricanes come through, which really devastated our DOT budget. We had a lot of jobs going that we had to put the brakes on. Everything just shut down. The DOT was slowing down projects. They were asking contractors to work 40 hours a week. The pandemic hit, and the revenues just went down. We’re heavily dependent on fuel tax. So when people aren’t traveling and they’re working at home, there’s no money coming in. Luckily, things are turning around.

MICHAEL JOHNSON (NATIONAL STONE, SAND & GRAVEL ASSOCIATION): DOTs across the country experienced a significant funding shortfall during the pandemic. NSSGA worked primarily with the Association of Equipment Distributors last year to secure in the coronavirus package that President Biden pushed through $10 million for state DOT relief. That’s not enough. We just worked with our supporters in Congress that had an $18 billion bill called the PAVE Act introduced to, again, backstop state DOTs to help them fill those holes that Jay talked about from the pandemic. Without that money, you could have work stop in a number of states.

KAREN HUBACZ-KILEY (BOND CONSTRUCTION CORP.): We’re a small multi-generation family business in Spencer, Massachusetts. Like everybody else, when we left ConExpo-Con/Agg we thought: What the hell are we in for? It was scary. I think people tightened their belts. But then people were at home. They’re working from home. Well, you know what, we’re going to pave our driveway this year. Or, we’re going to install that pool because we can’t take that vacation. Homeowners started hiring local contractors. Granted, it was a giant traumatic experience on a lot of personal levels for a lot of us, with deaths and family tragedies that all of us went through. But 2020 was the best year we have ever had as far as our sales. Probably a lot of that was because we were afraid and made some cuts early on that factored into what we did afterward.

JONATHAN HART (WASHINGTON ROCK QUARRIES): We kind of saw the same thing. It wasn’t that we expected it. It was just like Karen said: A lot of people just decided now was the perfect time because they’re working from home. While I’m working from home, I’m going to redo the backyard; I’m going to remodel the home. That really kind of caught us by surprise, because we were all thinking that, with the shutdown, everything’s going to ‘shut down.’ Really, we saw a lot of contractors that had work that was already paid for push our schedules forward. We were fortunate. We had some big projects that had scheduled road closures [or] long-term shutdowns that needed to be coordinated with DOTs. Because the roads were clear, they went ahead and did them during the day. We saw that result in a lot more business for us, and a lot more activity for the retail side of the business.

PAUL ROSS (DOUGLAS MANUFACTURING): 2020 was a challenge. When we finished the year, we breathed a sigh of relief. I think everybody did. Then, in January, business went through the roof with demand. But paralleling that was unexpected increases in raw materials – mainly steel, which continued almost on a daily basis. It’s the most interesting dynamic I’ve seen in 26 years. It’s something you have to keep on top of. You have to make sure you get the materials. It’s not just how much it costs.

DAVID CISZCZON (POLYDECK): We had a very good year. At Polydeck, we’re kind of divided up under three industries: aggregate, mining and coal. It was aggregate that really led the way to a great year. One of the things that is an important factor in 2020 is that it didn’t hit until March. Budgets were already approved and there were projects that were already approved and still went through. We’re having a good year this year, but my concern is I don’t think there were many projects, because of COVID, that were approved for 2021.

TONY GIANNI (TRIMBLE): From a technology supplier standpoint, we saw quite a bit of demand going into 2020. We were pretty optimistic about the year. We were really excited to be at ConExpo-Con/Agg. But right after things shut down, we saw a huge decline – not necessarily in sales but in the ability to deliver and install products. A lot of the producers we worked closely with kind of pumped the brakes. As things kind of progressed, we started seeing some light at the end of the tunnel and were able to do a lot of installation. We started seeing some sales. It’s still somewhat slow, but we did see a decline in a lot of the opex spending from some of our producers. But I think as we got more toward the end of 2020, there was surplus in a lot of the budgets.

TONY SPAKE (VOLVO CE): If a normal lead time was 90 to 150 days as kind of a best case of normal, we’re seeing virtually everything we build out to a year – give or take a month or two. We’re a global manufacturer. Probably our greatest challenge any normal year is forecasting and planning procurement. So to look at what happened last year, it’s no surprise manufacturers were shut down. We had plants shut down anywhere from four to 10 weeks because of the pandemic. On top of it, you had a customer base that froze. It froze and nothing occurred. So throw that type of wrench into a planning process, and then to see the rebound in demand late last year and this year, and the good news is that’s the best problem to have. The bad news is it’s going to take a while to dig out from that.

Click here for Part 1 of the 2020 reflection discussion that took place at the 2021 Pit & Quarry Roundtable & Conference.

Featured photo: PamElla Lee Photography