While few producers were happy with business in 2010, some saw improvement from the previous year. Jerry Weisshaupt, safety and compliance director at Kentucky Concrete, Cecilia, Ky., says 2010 “was better than 2009.”
Producers are being aggressive and are not waiting for business to return to levels of the last decade. Jeffrey Whidden, vice president at BMC, says acquisitions are key to his company's success. “We've acquired businesses since the construction industry went into recession,” he says. “Our growth and revenue have been mostly a result of that, as well as a bit of organic growth.”
In 2009, BMC acquired Ready Mix Service in Illinois (three plants); in 2010, Kienstra Precast Concrete Products in Illinois (four plants); and a strategic interest in Ready Mix Concrete in Missouri (three plants).
Smith Midland Corp., a precast producer in Midland, Va., reports last year was the most profitable year in its 51-year history. “Product diversification” was its main reason for success. The company distributed one-time, year-end payout checks and profit-sharing checks to its employees last year.
“As part of our implementation of lean manufacturing throughout the company, all associates are focused on continuous improvement projects, which help control costs,” says Ashley Smith, Smith Midland's president and chief operating officer.
“We have been trying to spend these slow times productively by focusing on improving our safety programs,” says Michael Ruddy Jr., vice president of Allied Concrete & Supply, a producer in Modesto, Calif. “We have rebuilt our safety program from the ground up, and we are very proud of the results we have achieved in reducing lost-time injuries while improving the general welfare of our employees.”
Other producers are spending money to upgrade and replace equipment. These include St. Marc Materials (batch plant), Silvi Group (truck scale and loader), Holliday Rock (ready-mix trucks and loaders), and Shelby Materials (glider trucks). (See page 35.)
Staying nimble and changing with the times is key. For example, in 2005, the residential sector accounted for one-half of U.S. Concrete's business. That fell to 19.5% last year. Its public works business increased from 3.7% to 27.5% during the same period.
A new environment
As each day, week, and month passes, the industry moves closer to more prosperous times, a time when hiring begins in full force, and more neighborhoods see ready-mix and flatbed trucks delivering concrete.
Until then, the concrete industry must operate in a new environment, one that is better than the depths of 2009, but not as prosperous as the middle of the last decade. “The construction industry keeps talking about a recovery, but it's not a recovery per se,” says McKean of BMC Enterprises. “It's a reset to something that we're just going to have to live with.”
BMC's Whidden adds, “We just want to see one year that has no decline.”
Some are philosophical and see a sliver lining. Kentucky Concrete's Weisshaupt perhaps put it best: “The future is ahead of us and it's a positive thing. We will make good things happen.”
Sharon J. Rehana is a Chicago-based business journalist.Methodology
The TCP100 companies are ranked by their total North American revenue for the previous year (2010). Some figures were for fiscal years.
Revenue figures and other information were acquired through questionnaires and telephone and e-mail requests. Revenue for companies that did not provide information was obtained through annual reports, press releases, media sources, and the databases of LexixNexis, Hoovers, Standard & Poor's, and Inside View.
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