Launch Slideshow

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Betting on Vegas

Betting on Vegas

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    Aggregate handling was critical when the new plant in Sloan, Nev., was in the planning stages.

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    The Cemex plant from above. Interstate 15 is in the upper right corner.

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    The mammoth City Center project on the Las Vegas Strip demanded 1000 yards of concrete per hour at the height of its construction.

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    Don Last, operations manager for Cemex in southern Nevada and Utah (left), and Ken Sears, plant operations manager, talk at the Cemex plant in Sloan, Nev.

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    Concrete is discharged into a truck at the batch plant.

There was a time not too long ago when any business in and around the gambling mecca of Las Vegas could do no wrong. Tourists and conventioneers mobbed the casinos on the famed Strip to spend fistfulls of dollars earned while the nation's economy soared.

Old hotel-casinos popular during the Rat Pack era were imploded to make way for bright and glitzy developments several times larger than old mainstays, such as the Stardust and New Frontier.

Concrete producers were not left out. Drivers lined up their ready-mix trucks at construction sites like hungry Las Vegas tourists queued up for a buffet.

Everything producers touched seemingly turned to gold. The challenge was not finding enough business; it was how to find the materials and labor to supply concrete to fill all of the orders.

Business also flourished outside the Strip. Residents who refinanced their homes were flush with cash. Las Vegas had become synonymous with home prices that were nearing stratospheric levels. Buy a home today, flip it in a year, and make a nice profit.

New homes were springing up, especially south of the city. These developments were supported by roads and sidewalks. A vast network of new and widened highways were built. Transplants moving from the gray and cold Northeast and Midwest would need new schools, stores, and other infrastructure.

Six million yards of concrete was placed annually in the Las Vegas market in the middle of the last decade. It was a marvelous time to sell concrete.

MEETING DEMAND

City Center was the largest hotel-casino project in a city that has seen many large hotel-casino projects. Composed of high-end hotels, condominiums, shopping, and restaurants on 76 acres, Cemex's portable plant was manufacturing concrete for the mega-project. The complex's concrete needs would total 1.2 million yards by the time a portion of it opened in late 2009.

The producer also was supplying concrete for another high-profile project: the 3900-room, 68-story Fountainbleau hotel-casino-condo further north on the Strip.

“There were huge volumes in residential, highways, commercial work, and public works,” says Don Last, operations manager for Cemex in southern Nevada and Utah. “It was an exploding economy.”

Cemex's predecessor, Rinker Materials, serviced the market from its old Buffalo Road plant on the west side of town. (Cemex acquired Rinker in 2007.) The plant was growing old, so the company sought to replace its 400-yard/hour capacity with a new modern plant just south of town in Sloan, Nev.

The plant was planned and built to maintain that 400 yard/hour capacity, but then something unplanned occurred. Home prices stopped rising and started to fall—rapidly. The financial crisis hit in fall 2008 and many projects ground to a halt.

“Our concern had been the ability to keep up with demand,” Last recalls, and then adds, “Nobody predicted the downturn with any accuracy.” Today, 1.5 million yards of concrete is poured in Las Vegas, one-quarter of the amount five years ago. The Fountainbleau project is idle; only a lone security guard mans the construction zone entrance.

But the Sloan plant was already in the works and Cemex continued with the new plant. The timing was fortuitous, for a slow market is the ideal time to invest in new equipment and technology.