1999 DJC Concrete Industry survey

Cadman Sand and Gravel

Any complaints the industry had before will soon seem petty as changes in environmental laws come into effect, according to Jeff Davis, vice president of Cadman Sand and Gravel.

Listing the salmon as an endangered species will bring about tougher regulations for the use of concrete on the job site and plant operations, Davis said. That, paired with rising supply costs as aggregate sources move further out, will bring changes to the concrete industry in the Puget Sound area. The company is making continued improvements in the use of materials and recycling, he said.

For the time being however, things could not be better. "We've optimized our productivity to meet the higher demand," Davis said. For Cadman, the workload has been especially high on the Eastside, where Microsoft is a major customer. Cadman invested in several 10- to 12-yard mixer trucks and made other moves to increase productivity at its plants. The larger trucks are expected to get more concrete to the jobsite quicker.

Concrete prices are expected to rise due to the Endangered Species Act requirements. "But we have changed quite a bit in the last five years, already." Davis said. For instance, the company is now recycling its wash water.

Cadman's biggest challenge has been scheduling. With increased demand, general contractors often have to call two weeks in advance for a concrete pour, instead of the usual 48 hours. July to October is the busiest time of the year, and already concrete companies are expecting a significant backlog of jobs.

Aphis Ready Mix & Concrete Pumping

Dave Frentress, Aphis sales manager, said he is somewhat concerned there is an oversupply of concrete in the Vancouver-area residential market. He said residential activity is steady, but off its peak from 1996-97.

"We feel the market has peaked somewhat from several years ago," Frentress said, "but it's still good and steady." And, over the next three to five years, he said, "our expectations are very positive."

To help boost sales, Aphis is actively promoting concrete parking lots and houses made with insulated concrete forms (ICF), specifically Blue Maxx ICF blocks by AAB Building Systems. Aphis sponsored a March class on using the blocks that was a sell-out. Another class is scheduled for May 21-22.

Frentress said about 7-8 percent of new homes built nationwide last year used ICF technology.

"We're looking to increase the number of concrete homes to be built in case the residential housing market goes down," he said. Where a typical house will use 60 cubic yards of concrete, one using ICF blocks uses 140-160 cubic yards.

Aphis also is expanding into other concrete-related ventures. In July, the company will begin renting concrete tools to contractors at a number of its existing Aphis Concrete Accessories sales locations in the Vancouver area.

Frentress said the company is investing in 20 new mixer trucks. It took delivery on eight of the $120,000 rigs last year and four this year. Two trucks are scheduled to arrive each upcoming month to make up the balance of the purchase.

With the 20 additional mixers, Aphis will have 60 in its fleet, plus 12 concrete pumper trucks. Frentress said he has about 10 used mixers he wants to sell.

Frentress said a troubling scenario in the Vancouver area is subdivisions are being built over prime aggregate supplies. The result is aggregates have to be trucked from outside areas, which increases cost

Then there is the issue of salmon.

"We feel the salmon recovery (issue) could have a major effect on the entire building industry," Frentress said.

One measure Aphis is taking to help save salmon is minimizing the impacts of cement runoff from exposed aggregate pours. Frentress said the company is borrowing recently developed guidelines on that topic from the British Columbia Ready Mixed Concrete Association. Frentress said British Columbia was considering banning exposed concrete aggregate until the guidelines were developed.

Acme Materials and Construction

Jim Clarizio, sales manager for Acme Materials and Construction, said the big news in the Spokane market is the North Spokane Corridor project that could start next year. If funded, the new 10-mile stretch of freeway will connect Interstate 90 in Spokane to Highway 2 and U.S. Highway 395, which goes to the Canadian border. It will take at least 10 years to build at a cost of $750 million (current dollars).

Clarizio expects to get a piece of that freeway project, and he said Acme is in the process of getting additional sites permitted to increase sand production, primarily for new roads. He said the proposed freeway was a big factor in that decision.

There are two other big Spokane-area road projects coming up - the Evergreen interchange, which will connect Evergreen Street to the Valley Mall, and additional phases of lane widening on I-90. The Evergreen job is expected to bid in June.

At Acme, road construction is becoming a bigger part of the business mix because more roads are reaching a state of disrepair - and more state and federal dollars are flowing into road projects this year.

Still, Clarizio said he is concerned about how tough it is to get money for public projects in Eastern Washington because the small population base doesn't have a lot of clout in the Legislature.

Residential demand for concrete remains strong in the Spokane area. Clarizio said new housing construction for the first three months of 1999 is on pace with 1998, which was up 17 percent for the year over 1997.

Clarizio said the Spokane area has an ample supply of aggregates and Acme has three aggregate pits in the area. The shortage appears to be in the number of qualified workers.

"The thing that concerns me as a manager in this company is it's getting tougher and tougher to find the right people to do the right job," Clarizio said. "Spokane is a good market for entry level (workers). Once they learn skills, we (as an industry) don't pay enough, and they move out."

In addition to Spokane, Acme operates out of Richland and Rathdrum, Idaho. It has three divisions: ready mixed concrete, concrete paving and asphalt. Its primary markets are new housing, commercial, light-commercial and roads. Of that, new housing accounts for about 35-40 percent of the firm's total concrete sales.

Lone Star Northwest

Don Grimes, Lone Star general sales manager, said the Puget Sound area construction market is as strong as he has ever seen.

"Generally, there's a lot of public work, to say nothing about commercial buildings and single-family homes," he said. "I think this current level of construction is going to last three years, at that point it will depend a lot on funding for DOT work."

There is even more work on the horizon for the Puget Sound area's concrete industry. Grimes said there are a number of projects slated to start in the late third and early fourth quarters this year. Included are several airport projects, highway jobs and port work.

Work planned at Sea-Tac Airport includes a new north concourse, and a big highway job is in the works that would replace most of the concrete on Interstate 5 from the state Route 512 exit to the Port of Tacoma Road exit. The highway job could continue over a 15-year period.

Grimes said there also will be a lot of marine work at the ports of Tacoma and Seattle in the next three years.

Will all those projects put the squeeze on the ingredients to make concrete?

Grimes said there is enough aggregate to keep up with demand, and it doesn't appear there will be any shortages of cement, although some areas of the country, like the Midwest, are experiencing some cement shortages.

"I think the challenge for all of the concrete suppliers in the market is to have drivers and trucks," Grimes said.

Getting drivers has become a big enough concern for Lone Star that it is talking to a drivers' school about giving them a truck if they train drivers for them.

Another industry challenge Grimes mentioned is noise restrictions. Many local communities now have restrictions on when ready-mixed trucks can deliver. In most areas, deliveries have to be made after 7 a.m. and no later than 5-7 p.m. Grimes said the restrictions are fueling the shortage of drivers because they limit the number of hours drivers can work.

Lone Star has been investing in its sales staff by involving them in a concrete sales certification program that is sponsored by the National Ready Mixed Concrete Association. The program puts staff through 84 hours of class instruction in four different modules. Curriculum includes concrete technology, sales and marketing, and accounting procedures.

Grimes said he has received positive feedback from Lone Star employees that have taken the program. "I think it's outstanding," he said.

CSR Associated

The upsurge in construction is making it hard to find qualified truck drivers, but that has been a small problem for CSR Associated. The company's major challenge for the past few years has been obtaining permits for a new gravel pit near Granite Falls.

"We are glad to have the permit now, but we will have ongoing legal action against us that will need to be resolved," said Neill Evans, vice president. "We expect to start work at the facility later this year."

Evans said he expects major changes for the industry because of Endangered Species Act requirements. The company is not expecting to work on any big projects this construction season, but will be busier than average with midsize to small jobs.

Evans also predicted a price increase due to increased transportation costs for aggregate.

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