AggBeatJanuary 2007
by , Senior Editor |
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Although gains are expected in 2007 for construction ma-chinery equipment manufacturers, they are predicted to be smaller than the double-digit growth of 2006, according to the annual outlook forecast conducted by the Association of Equipment Manufacturers (AEM). Growth is expected for United States, Canadian, and worldwide markets, with the strongest 2007 gains anticipated in global markets, according to the report. Increases of 3.9 percent for the United States are expected, and business volume to Canada is expected to increase by 5.0 percent, according to the survey. Growth of 6.4 percent in other worldwide markets in 2007 is also expected. “Although the U.S. economy is starting to show signs of slowing down, it has displayed surprising resilience,” Gerry Shaheen, 2006 AEM chairman and a group president of Caterpillar Inc., Peoria, Ill., says in a written statement. “For construction equipment manufacturing, the U.S. housing market has leveled off, but this has been offset by strength in non-residential construction, roadbuilding, and sales to global markets.” The AEM outlook survey asks respondents to rank the influence of several factors on future construction equipment sales. The state of the general economy, including interest rate levels and consumer confidence, are top factors, according to AEM. Housing starts and highway funding will also have a major impact on the continued strength of the industry, according to AEM survey respondents. Steel prices and energy costs are also major factors. “The high price of inputs and material shortages costs are serious concerns for our industry and adversely affect equipment manufacturers’ ability to meet production needs in a timely and cost-effective manner,” Shaheen says in a press release. At Aggregates Manager press time, sales of concrete and aggregate equipment were anticipated to increase 8.8 percent in the United States by year-end 2006, and show gains of 7 percent for Canada and 10 percent for other worldwide markets. Market predictions for 2007 are growth of 4.7 percent in the United States, gains of 6.8 percent for Canada, and increases of 7.5 percent in other worldwide markets, according to the AEM survey. Machines in this category include crushers, screens, feeders, conveyors, washing equipment, rock drills, concrete batch plants, and pavers. For 2007, earthmoving equipment sales are expected to decline 0.3 percent for the United States, while increasing 0.7 percent for Canada and 2.7 percent for other export markets. The earthmoving segment includes excavators, loaders, haulers, motor graders, crawler tractors, scrapers, wheeled log skidders, trenching machines, and directional drills. According to the survey, shipments for attachments and components in 2007 are expected to grow by 8.4 percent in the United States, 7.7 percent for Canada, and 10.3 percent for other worldwide markets. Buckets, quick couplers, augers, demolition shears, pulverizers/crushers, electronic and hydraulic components, powertrains, tires/wheels, and engines are all included in this product category. Mergers & AcquisitionsIndustry merger and acquisition activity remained moderate during the past month. On Nov. 17, 2006, U.S. Concrete, Inc. (U.S. Concrete) announced the acquisition of Breckenridge Ready-Mix Inc., a company that operates two ready-mixed concrete plants and a limestone quarry and sand pit in west Texas. The total purchase price (including assumed debt) approximated $3.4 million, or almost one times the company’s annual revenue. No other transaction terms or conditions were provided. The acquired company will be merged into U.S. Concrete’s existing regional operations. On Nov. 23, 2006, an article in the Statesman Journal announced that Oldcastle Materials, a division of the Irish construction-materials company CRH plc, had acquired Egge Sand & Gravel LLC, a leading sitework contractor and provider of construction aggregates located in Eugene, Oregon. No transaction terms were provided. The acquisition is the second for Oldcastle in the region in the past six months, and further expands its presence in the Oregon market. The acquisition discussions between Rinker Group Limited (Rinker) and Cemex, S.A.B. de C. V. (Cemex) have continued throughout the past month, with the Rinker board announcing that it believes the original offer does not fairly value the company. Undoubtedly, the discussions will continue over the next month, and other interested parties for the Rinker business may surface. A more detailed discussion of these events will be provided in a later issue as more details are provided to the market and investors. — by Bill Watkins, managing director, National City Capital Markets. Watkins is a contributing editor and may be reached at 216-222-7134. Polaris Minerals wins award Vancouver, British Columbia-based Polaris Minerals Corp. received the 2006 Mining and Sustainability Award for its efforts to promote sustainable development.? The company was recognized for creating a positive, productive relationship with local communities and First Nations. Polaris Minerals is working with tribal leaders to develop the Orca Quarry near Port McNeill. Survey reveals transportation construction industry benefits, salaries Your salary and benefits may vary depending on your position, firm size, and geographic location. But knowing the industry averages can help you know what you’re worth and what those with whom you work expect to earn. Because aggregates producers work closely with transportation contractors, knowing what their salaries are and what benefits they receive is helpful for comparison and planning purposes. The 2007 Transportation Contractors Salary & Benefits Survey conducted by the American Road & Transportation Builders Association Transportation Development Foundation finds that the average salary increase in 2007 is 4 percent for both salaried and hourly employees. Hourly workers in the transportation construction industry are well paid, with skilled occupations earning $18.24 on average, according to the survey. The average hourly benefits range from approximately $7.70 to about $13.60. Throughout the United States, an average of about 33 percent of contractors reported that their hourly employees belonged to a union, with union participation being highest in New England and the Mid-Atlantic states (56 percent) and through the North Central Region (73 percent). In terms of compensation, the survey found that chief executives of firms in the transportation construction industry receive an average annual salary of $164,959, up slightly from an average of $164, 400 that was found in the 2006 survey. More than 70 percent of chief executives also receive an annual bonus of about $104,261. About 95 percent of chief executives also get to use a company car. According to the survey, other highly paid positions in the transportation construction industry include CFO (average compensation of $92,049), chief estimator ($89,057), chief engineer ($97,611), and project manager responsible for projects of $5 million or more ($83,483). Office manager are paid an average of $43,068 per year, secretaries receive an average of $44,002, general clerical workers earn about $29,884, and computer managers earn about $66,585. The survey also revealed that nationally, 97 percent of transportation contractors provide some kind of medical insurance for their salaried employees, and 87 percent provide medical insurance for hourly employees. Dependents of salaried employees are covered in 88 percent of firms, and dependents of hourly employees are covered in 79 percent of firms, according to the survey. For the complete survey results, including information on small (less than $5 million), medium ($5 million to $50 million), and large (more than $50 million) firms for five regions of the country, contact Christy Woodall at the American Road & Transportation Builders Association at 202-289-4434 or via e-mail at cwoodall@artba.org . News Briefs Flagrant violation procedures detailed As the newly appointed assistant secretary of the U.S. Department of Labor’s Mine Safety and Health Administration, (MSHA), Richard E. Stickler on Oct. 26 issued instructions to agency inspection personnel, establishing uniform procedures for evaluating flagrant violations of mandatory safety and health standards. President George W. Bush appointed Stickler to lead MSHA on Oct. 19, but Stickler’s nomination never received a confirmation vote in the U.S. Senate. This means that that Stickler’s appointment will expire with the end of the 109th Congress. The new procedures carry out a provision in the Mine Improvement and New Emergency Response Act (MINER Act) that was signed into law June 15, 2006. According to the MINER Act, a civil penalty of up to $220,000 may be assessed for a flagrant violation. A flagrant violation is defined as “a reckless or repeated failure to make reasonable efforts to eliminate a known violation of a mandatory safety and health standard that substantially and proximately caused, or reasonably could have been expected to cause death or serious bodily injury.” Based on the facts and the inspector’s observations, a mine inspector has the first opportunity to evaluate a violation as flagrant, according to an MSHA press release. The new instructions for MSHA enforcement personnel set the criteria that an inspector must consider when recommending that a flagrant violation penalty be assessed. The procedure instruction letter is available at www.msha.gov . Martin Marietta realigns operations Raleigh, N.C.-based Martin Marietta has completely realigned its Mideast and Southeast aggregates operations into four operating divisions with Dan Shephard and Phil Sipling, executive vice presidents of the Mideast and Southeast heading up these regions. Both Shephard and Sipling will report directly to Ward Nye, president and COO of Martin Marietta. Just a few months prior to the Oct. 17 announcement that Martin Marietta shifted its management in these areas, the company did the same to the structure of its western U.S. business. NAPA, partners receive grant The Federal Highway Administration (FHWA) has awarded the Roadway Safety Coalition a four-year, $4.1 million grant for development of work zone safety materials. The coalition, which includes the National Asphalt Pavement Association (NAPA), the American Road and Transportation Builders Association (ARTBA), the International Union of Operating Engineers, and the Laborers’ Health and Safety Fund, will be joined by the Texas Transportation Institute (TTI), CNA Insurance, and the American Association of State Highway and Transportation Officials (AASHTO) to develop training materials for the highway construction industry. The FHWA grant will build upon the training materials of the Roadway Safety Program, which were developed through the Occupational Health and Safety Administration’s (OSHA’s) Harwood Grant. This program is a CD-based safety training program that covers the 14 most common highway hazards including runovers/backovers, fall protection, and night work. Under the FHWA grant, new materials will include an internal traffic control plan (ITCP) demo as well as training materials on “struck-by” and night work. The grant will also focus on non-English-speaking workers, a continuation of the work that began under the OSHA Harwood program. Granite addresses takeover rumor Watsonville, Calif.-based Granite Construction Inc. on Oct. 20 announced that the company is not aware of any developments that would substantiate a rumor contained in a news report that speculated of a possible takeover of Granite Construction. Pioneer creates concrete that gains strength quickly Pioneer, a Northern Delaware-based ready-mix concrete producer, has created a concrete that achieves the required strength in two to three days, allowing one floor per week to be completed for a new residential construction project. The concrete mix was used on the floorings, foundation, columns, sheer walls, and floors of the building for both phases of the project. Pioneer is providing concrete for the Christiana Landing and Justinson Landing projects in support of the residential and commercial real estate revival of the Wilmington, Del., downtown and riverfront areas. Pioneer has already contributed 12,000 cubic yards of concrete for Phase 1 of the Residence at Christiana Landing, a 23-story, 265,000-square-foot apartment complex on the south bank of the Christiana River, and is providing another 13,000 cubic yards of concrete for Phase 2, which is currently underway. Pioneer is also providing 4,000 cubic yards of the concrete for Justinson Landing, another upscale living project on the north shore of the Christiana River. |
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Reprinted from Aggregates Manager Magazine |
