P&Q Staff 2024-03-18 10:57:58
As this year’s Roundtable discussions got underway, aggregate producers and equipment suppliers shared their assessment of the prior year
The following transcripts were edited from two concurrent Feb. 2 discussions at the 2024 Pit & Quarry Roundtable & Conference. The transcript from one discussion begins on this page, while the transcript from the other starts on page S13. Both discussions were edited for brevity and clarity.
KEVIN YANIK (PIT & QUARRY): For producers, tell us about your construction materials sales in 2023 and how they compared with the previous year. For equipment suppliers, please share your observations of the 2023 construction materials market. Tell us about your sales of equipment in the last year. Did they meet your expectations or exceed them?
MICAH TYSVER (CRUSH MODE): From a dealership perspective, sales activity was down in 2023 quite a bit from what I experienced. Our rental activity was up, but we’re still getting good utilization of our equipment. The sales activity being down was mainly driven by economic factors like high interest rates. People were hesitant to purchase equipment. Capex was tighter. But we were still getting a good utilization of our units from rental activity.
DOUG LAMBERT (SUPERIOR INDUSTRIES): 2023 was an exceptional year for us. We outpaced the forecast. It was a record sales year. It was a record year for backlog.
But, following up on what Micah said, we did see toward the end of the year that the rentals RPO was not converting. That suffered just a little bit.
The other thing we noticed is that as inflation went up, wages followed. That compounded the problem of finding people to stay with you instead of job hopping.
JAMIE JONES (CAPITAL AGGREGATES): Surprisingly, across all of our companies, sales volume was up about 10 percent overall last year. Except for our rural areas you really saw a decline. Our revenue growth was [up] almost 25 percent. So, we really saw some positive things, even though it was kind of unexpected.
STEWART PETROVITS (ROUTE 82 SAND & GRAVEL): We were probably within 1 percent of our 2022 production in sales, but margins were much improved. We went through three price increases in one season – and a fourth starting this February. It gave us the ability to raise our prices. So, we feel like 2023 was a very successful year – and I think 2024 will probably be better than that. There probably will not be increases in volume.
SCOTT ALEXANDER(SUMMIT MATERIALS): I’m responsible for our Western region, which, from an aggregates standpoint, is the largest aggregate production force in Summit. So I can speak in terms of our Western region.
We got off to a very, very slow start. It was weather related, and it was the worst year that anybody there can remember weather-wise in the first quarter. That kind of worked its way to the whole company in financial recording.
But we had a great recovery and a very strong fourth quarter. Overall, we went from a very poor performance to getting above expectations.
NATE RUSSELL (IROCK CRUSHERS): The year was relatively flat, and there was kind of an interesting dynamic in the marketplace where we had a half dozen or so yellow iron dealers that had a massive influx of inventory from their primary supplier. It certainly put us in a unique position.
JOHN SCEPANIAK(WM. D. SCEPANIAK): Revenues were up while overall production was down. We saw a residual benefit of that with our operators, who weren’t running night shifts and weekends. We were still able to attract revenues.
GEOFF HAWKER (HAZEMAG): As other manufacturers have said, we had a very strong year. We had strong capital at the start of the year and lots of pre-project activity. You could see that it would slow down on capital conversions toward the end of the year, which, I think, is due to set rates to the capital.
We’ll just have to wait and see where that goes. We have a strong anticipation that these projects will turn into being successful in 2024 and toward 2025.
ALEX KANARIS (VAN DER GRAAF): Overall, we were down because of other business lines. But we had an increase in aggregates.
SARAH SMITH (XYLEM): 2023 was a very strong year for us within the mining segment. We saw really great results from sales and rental. We’ve been able to continue to increase our expansion across North America from a products standpoint, service capabilities, as well as our team and footprint presence across the country.
MATT NICHOLS (DODGE): We had a very strong year in 2023. The interesting thing that’s a little different from what I’ve heard here is we started to see in the last six months a lot of our OEMs and distributors start to bring their inventories down. A lot of them had built them [up] because of supply chain issues. They started to get confidence back in the market and bring their inventories back down. It has had a bit of an effect on our business.
ERIC ROSENOW(DYNO NOBEL): Our mobile pumping unit business saw a year-on-year increase. It was a strong year for us on the equipment side, and we have a healthy backlog for 2024.
The following transcript was edited from a concurrent Pit & Quarry Roundtable & Conference discussion.
JACK KOPANSKI (PIT & QUARRY):For the producers here, how were your construction materials sales in 2023 and how did they compare to the previous year? How did your production volumes and pricing trend last year?
FRANK SUAREZ(VULCAN MATERIALS): 2023 was a very good year for us. Our sales and operations teams worked to deliver value to our customers by offsetting the impact of inflation and meeting demand.
CHRIS WILLIAMS (CAPITAL AGGREGATES): Our volumes and prices were up in 2023. Our sales team has been phenomenal and able to match double-digit pricing increases despite continued inflationary pressures.
JONATHAN KOLBE (ALLEGHENY MINERAL CORP.): We had single-digit growth in 2023, as well as strong pricing momentum last year. We expect that momentum to continue into 2024.
JAY MIZACK (CARMEUSE): Volumes were slightly up for us. A lot of that was regionally driven, so some markets were much better than others. Pricing was up everywhere – double digits for us. 2023 was another record year for us, so hopefully that trend continues.
JACK KOPANSKI (PIT & QUARRY): What dynamics at play in your state or region drove or hindered demand? What construction markets drove material demand? What impact, if any, did Infrastructure Investment & Jobs Act (IIJA) funding have on your state in 2023?
CHRIS WILLIAMS(CAPITAL AGGREGATES): Speaking as a mostly regional producer, the states we operate in have made tremendous strides in the last couple of years. We had a state gas tax increase pass that has immediately benefited the industry and our volumes and pricing.
Additionally, in Missouri where a large number of our operations are, our state legislature passed a multi-million-dollar general revenue project outside of transportation directing funding to I-70 from Kansas City to St. Louis. That has us looking to the future with a lot of optimism, having those scalable projects in our region.
GREG DONECKER (KEMPER EQUIPMENT): In the last year, we had substantial growth in our business. A lot of that was in new processing plant construction of crushing and screen circuits and conveying circuits. I believe a lot of that came about because of optimism that IIJA was going to come. The funds may not be in place yet, but we saw most producers were willing to do plant upgrades and prepare for what they anticipate coming together.
JEFF AVANT (ATLANTA SAND & SUPPLY CO.): 2023 was flat compared to 2022 from a volume standpoint, but we also enjoyed some close to double-digit price increases.
As far as the rollout from the federal funding, we have seen a tremendous amount of it. I think Georgia slow played the rollout of the funds because of the inflationary pressure they were seeing on the cost of jobs. Hopefully, we’ll start seeing more funding now that we’re seeing inflation numbers come down.
JACK KOPANSKI (PIT & QUARRY): For equipment suppliers and others, what were your observations of the 2023 construction materials market? What were your equipment sales like last year? Did your sales to the aggregate industry last year meet or exceed your expectations?
CHARLES GILBERT (ASTEC): We experienced our fourth consecutive record year in equipment manufacturing and distribution. One thing that I think has driven that is we have gone through a period where things haven’t been replaced because of whatever financial reasons that companies had, such as concerns about the industry or interest rates. I think the states really stepped up when they started doing their own infrastructure bills after 2008, and I think that’s what’s generated this last boom for all of us that we’ve enjoyed.
JOHN BENNINGTON (SUPERIOR INDUSTRIES): We had a record year in 2023. On the construction materials side of things, what we’ve seen continually is that plants are not getting smaller – they’re getting bigger. They’re getting more complex, so there’s a larger requirement for the size of the equipment, plus the number of pieces of equipment in the plant.
E.J. BURKE (QUICK SUPPLY CO.): We had a record here with double-digit growth. It was an excellent year not only in explosives, but also in drilling. More and more of our customers are asking us to do the drilling, as well as the explosives. So, it was a very good year, and we anticipate 2024 to be equally strong.
PAT JACOMET (OHIO AGGREGATES & INDUSTRIAL MINERALS ASSOCIATION): 2023 was a good year for our members across the board. We benefited from a state gas tax increase that captured some of the money left on the table from EVs. It included a fee attached to electric vehicles that helped to make up some of that shortfall.
Also, I think IIJA has been very helpful. We have a record DOT budget, and we’re fortunate enough to have Intel building a couple major lab facilities in central Ohio. That’s drawing a lot of resources from central Ohio and helping our members on the fringes, as well, because they’re trying to make up for the draw toward central Ohio.
We had a good year and record attendance at our annual meeting with record vendors, so that, to me, is an indication that the industry is very strong in Ohio.
KELAN MOYLAN (TCI MANUFACTURING): 2023 blew 2022 out of the water for us as far as having a record year. We have record backlog, as well.
We’re excited that our customers are having good, profitable years and that they’re reinvesting a lot of those profits into their plants. We’re seeing a lot of plant optimization, and I think that’s because producers can generate more production and they’re able to improve safety around their plants.
We’re trying to do the same thing: optimize our operations for the rainy day that’s eventually going to come for everybody in this room. We don’t know if that’s going to be in two years, five years or 10 years, but optimized plants and reinvesting these profits not only makes hay while the sun’s shining right now, but also helps our whole industry continue to perform well in those softer times.
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