In reviewing this year's TCP 100, I am struck by the stability of the players and how they rank. This resilience reminds me of a recent trip my wife and I took to Morocco and the fascinating city of Marrakesh. It's a modern metropolis that looks like it could be anywhere in the developed world.
While taking the obligatory tour the first morning we were there, the tour guide told a remarkable story of the country's monarchy. When the late king was on his deathbed in 1999, his son asked his dying father for advice on how to rule from the throne he was about to inherit. His father simply told the prince, “You have to survive.”
Within hours, the prince was the new king. Weeks later, he brought modern change to the country, introducing positive steps in the areas of human and property rights. He created one of the most progressive democracies in the Middle East.
The new young king learned that to survive, he had to adapt to the political realities of the 21st century. Even in a third-world country, he knew his subjects had learned about the freedoms they expected if a benevolent monarchy was to prosper.
Likewise, producers also have to survive. This mantra sweeps the ready-mix concrete industry as it faces three of the toughest years in its history. From a peak of 458 million cubic yards produced in the U.S. in 2005, we have fallen precipitously to what could be a 290 million cubic yard year in 2009.
This loss of 170 million cubic yards translates into almost 30,000 parked ready-mix trucks. Unemployment numbers are difficult to calculate because of the indirect impact these losses represent to our industry's materials and equipment suppliers, as well as on the concrete contractors who buy and place our product. We suspect those numbers are in the hundreds of thousands of lost jobs since 2005.
Yet the TCP 100 stands strong. But what will next year's list look like? I predict two major trends.
First, important international players such as Cemex and Heidelberg Cement will look very different in a couple of years. They may become smaller organizations, as they are forced to down-size to pay down the debt they incurred on their massive acquisitions.
We also expected to see a significant reshuffling of the deck of the independent regional and local players in dozens of large and mid-size markets. This didn't happen in 2008, but may be occurring this year.
Like the Moroccan king, producers of all sizes have learned to survive. They have worked through the challenges of this downturn and resized their cost structure, mothballed production capacity, painfully cut workforces, and negotiated with their banks to keep them from failing.