Bullish on business: northeast producers are optimistic about the economy as it relates to the aggregates industry

Pit & Quarry, April, 2004 by Rodney E. Garrett

Business is ratcheting up in the aggregates industry from Maine to Maryland and this may be a microcosm of what is happening throughout much of the United States this year. Actually, business was not all bad for the majority of quarry operations in the Northeast last year, except for some weather-related problems.

John Wilkinson, the chief engineer for John S. Lane & Son Inc., Westfield Mass., says the area served by the company's four quarries and a sand and gravel pit has had so much rain and snow for 13 straight months that many road-building projects were either slowed down or at times even came to a halt.

With a major break in the bad weather last September, aggregates sales became brisk for Lane. "All of a sudden there was a rush by our customers for aggregates and, by the end of November, our stockpiles were all but gone," Wilkinson says. "It was a blessing because that surge in sales gave us a respectable volume of business for the year. We were not the only company that suddenly was sold out of materials. Most all the other quarries in our area experienced the same inventory depletion," Wilkinson says.

Wilkinson says that this spring, the company is operating all of its crushing/screening plants at full production capacity just to make up for the depleted stockpiles and produce enough material to satisfy new orders received from contractors and asphalt paving producers.

Tom Knight, vice president for Land Venture II, offers a similar account of weather-related problems. The company has six portable crushing plants for crushing rock, concrete and asphalt paving into aggregates and road base. In addition, the company performs turnkey site-prep work for companies in the private sector, namely new housing tracts and commercial building sites.

Knight says business was brisk last year but would have been even more so were it not for a 15-month period of exceptionally high precipitation. That brought some construction projects to a halt.

Securing the homeland

Land Venture II is headquartered in Manassas, Va., 30 miles southwest of Washington. With many federal government construction projects underway, including a new center for the U.S. Department of Homeland Security, there is an influx of people who are filling new federal positions. This influx is causing a housing shortage that contractors such as Land Venture II are eager to rectify.

Both John S. Lane & Son Inc. and Land Venture II are projecting increased gross revenues this year compared to last and know that their crushing/screening plants need to be made as reliable as possible. Despite their own in-house equipment maintenance capabilities, they also rely on fast, efficient service and parts deliveries from their equipment suppliers.

Land Venture II's main supplier and service provider is Mellott Enterprises Inc. (MEI), which serves six Mid-Atlantic states. The company represents 24 major manufacturers, including Metso Minerals, McLanahan, Dodge, LPT and Siemens/Milltronics. MEI also manufactures its own line of conveyors.

Terry Randall, vice chairman of the board and president/CEO for MEI says many customers project an increase in business this year. As a result, his company will place more emphasis on the distribution of third-party products.

"We will continue to promote our systems and fabrication business," Randall says. "However, by expanding our efforts on the customer service and distribution part of our business, we can grow the company without increased capital demands that typically go hand in hand with expanding fabrications operations. That is one reason we took on the Metso Minerals product line about four years ago."

To improve delivery logistics, Randall has centralized the MEI product-support department that coordinates orders for all its branches. Further, the company has put the inside-service people through an intensive training program for the sake of efficiency.

A new computer program is now in operation that stores a complete quarry database and customer profile right down to the equipment owned and the parts needed. By having this information on each customer's equipment, MEI will know what parts to stock at each branch location, on the customer's behalf, for more just-in-time parts deliveries.

Team effort

Many quarry managers say their equipment suppliers are part of their "team" that ensure the crushing/screening plant and rolling stock are operating optimally.

If a distributor does not fit into the team effort, many quarry managers will look elsewhere for a company who can provide them the products and services they expect.

Land Venture II bought a Metso Minerals Nordberg Lokotrak outfitted with a Nordberg C105 jaw and a Nordberg HP 300 cone crusher. The portable plants are used on demolition and construction projects where a continuous crushing/screening activity is central for keeping the overall project on schedule. Knight says that is why having a distributor who can give them fast service and parts deliveries is so important.

Brothers