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Market Niches: LWA
Posted By Brooke Wisdom On July 1, 2010 @ 9:37 am In Articles,Features | No Comments
Tread lightly into new markets
The economic downturn gave one aggregate company more time to focus on expanding its markets.
By Kerry Clines, Senior Editor
Big River Industries began producing high-quality, expanded clay lightweight aggregate (LWA) in Erwinville, La., in 1954. The company acquired a second mine near Livingston, Ala., in 1984, and a third in Proctor, Ark., in 2005, making it the largest producer of expanded clay LWA in the nation. Expanded clay LWA is used predominantly in the masonry industry. The housing market was booming. Business was good…but that all changed when the economy took a dive two years ago.
“We recognized, a long time ago, that we needed to broaden our horizons, find other applications for our products, and expand into areas where we haven’t been,” says Jeff Speck, vice president of sales and marketing for Big River Industries. “But we were very busy up through about 2007 and didn’t have time to develop those other markets. As things began to slow down in 2008, we began to refocus on finding those new applications.”
The company began to do research and working with potential new customers to see if there could be a use for the aggregate in other industries.
Asphalt surface treatment, also known as chip seal, is a traditional market for LWA. At one time, Big River did quite a bit of work with the Louisiana Department of Transportation. When the first energy crisis occurred in the ’70s, however, that market disappeared because much of Louisiana’s tax revenues come from the oil industry.
“That’s an area where we have refocused,” Speck says. “We’re spending a lot of time with the Louisiana highway department and the parishes to develop more chip seal applications. It has been a bit of a slow process. After 40 years, there aren’t many people left with the state who know how to use LWA in chip seal, so it’s an education process. It requires a lot of one-on-one time with the district engineers and with the parishes to re-educate them on our product and get our foot back in the door.”
Geotechnical fill is a new market for the company.With poor soil conditions in Louisiana and along the Gulf Coast and rivers, the use of lightweight material as fill is sometimes advantageous. The company has provided geotechnical fill for a number of projects, including a project in Port Arthur, Texas, the Picardy Interchange along Interstate 10 in Louisiana, and surge-protection wall projects along the coast of Louisiana.
“These markets haven’t required any product changes, but some of the new areas we’re looking at will,” Speck says. “One of the areas we’re trying to develop is filtration media. For that, they are very specific on the grading sizes, so we’ll have to put the facilities in to be able to fine-tune those gradings to a specific requirement. We’re not capable of doing that at the moment, but we know that for these markets to work for us, we’re going to have to make that investment, and we’re prepared to do that. But we have to make sure we’re going to have some return on investment before we actually put that in place.”
“We recognized, a long time ago, that we needed to broaden our horizons, find other applications for our products, and expand into areas where we haven’t been,” says Jeff Speck, vice president of sales and marketing for Big River Industries.
Another new market, one that Big River isn’t ready to talk about yet, will also require a specific, almost single-size, gradation. “It’s a new application for us and we’re working with the manufacturer of a product that has never used a lightweight material before,” Speck says. “But if it takes off, it’ll be a huge market.”
Big River plans to keep its traditional masonry and concrete markets and supplement those with the new markets in order to keep plants running and employees working. As new construction comes back and the masonry market rebounds, the company plans to be prepared to handle the increased production. “We haven’t had any difficulty in maintaining our original customer base,” Speck says. “We’re not using all our capacity right now, so when the masonry market returns, we’ll be able to ratchet up our production fairly easily.”
So far, the biggest investment the company has made in finding new markets has been in time, travel, and people. “It’s taking more of my time,” Speck says. “It’s taking more of the leadership of our company to travel more and go wherever we have to go on short notice to meet the right people and try to make some of these things happen.”
Big River added one key marketing person to deal, almost exclusively, with entities like the highway department and the U.S. Army Corps of Engineers. The new marketing person, an engineer with a background in the aggregate industry, has proven to be very effective in dealing with the other engineers, getting in to see the right people, and making progress in getting LWA specified and used in projects.
“Our industry can no longer expect the customer to accept what we make,” Speck says. “We have to be willing to do what’s necessary to make the product that our customer wants and needs. If that means prescription blending and grading to very specific requirements and tight tolerances, then that’s what we’re going to have to be capable of doing. That’s the direction we’re headed. We are determined to diversify our markets into areas that aren’t a traditional lightweight market to allow us to grow our business and make good profits into the future.” AM
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