September 1, 2013
by Therese Dunphy, Editor-in-Chief
Second quarter results announced by two of the industry’s biggest companies — Vulcan Materials Co. and Martin Marietta Materials — offer an interesting look into the current state of the industry. Net sales were up for both. Martin Marietta reported a net sales increase of 4 percent, while Vulcan Materials reported an increase of 7 percent.
It was a mixed bag, however, for actual production tonnages. Vulcan reported second quarter aggregate sales to outside customers of 36,617,000 tons (up from second quarter 2012 sales of 35,980,000 tons); Martin Marietta reported 33,286,000 tons (down from second quarter 2012 sales of 33,906,000 tons). Martin Marietta estimated that wet weather in some markets reduced aggregate shipment volumes, but set a sales record in its Specialty Products business.
In terms of market segments, both companies touted improvements in the housing market. “Housing starts in the United States are up sharply from a year ago,” noted Don James, chairman and CEO of Vulcan. Non-residential construction also appears to be healthy. Martin Marietta reported a 7-percent increase in aggregate shipments to this sector. Results for the infrastructure market were mixed. James said Vulcan expects 2013 “to approximate 2012.” Nye noted that an 8-percent decline in this market area contributed to Martin Marietta’s overall decrease in aggregate shipments.
One consistently positive outcome for both operators is an increase in pricing. “Over each of the past four quarters, our year-over-year quarterly pricing gains of at least 4 percent and the geographic breadth of the pricing improvement help reinforce our expectations for price growth of 4 percent in 2013,” said James. Martin Marietta was slightly more conservative in its expectations. “Based on results through the first half of the year, we reaffirm our full-year pricing guidance of up to 2 percent to 4 percent for the aggregates product line,” Nye said.
While wet weather and strained government budgets impacted some market sectors, it’s good to see operators achieve overall increases in prices, net sales, and gross profit margins. As the final quarter approaches, be sure to keep an eye out for the annual Aggregates Manager Forecast Survey. It’s your chance to share information on your markets and benchmark against your peers.
3 Things I Learned From This Issue
1. When planning a portable plant move, be sure to know the weight limits for roads in each state, page 15.
2. When designing a predictive maintenance program, not all equipment should be monitored, page 20.
3. While regular assessments are based on the assignment of points, specific criteria is not available for special assessments, page 27.