June 2008 – AggBeat


June 1, 2008

For daily news updates and Web-exclusive news items, visit the
“Industry Breaking News” section on our Web site at

by Tina Grady Barbaccia, Senior Editor

Volvo, Cat to raise
equipment prices 5 percent

Equipment manufacturers Volvo Construction
Equipment and Caterpillar plans to raise the price of their machines and
components up to 5 percent globally, citing record global demand for
commodities that has led to sharp increases in the cost base for heavy
equipment manufacturers.

Volvo hasn’t cited an exact date for the price
increase. Cat is planning the majority of its price adjustment to become
effective as of July, adding that mid-year pricing action is “unusual
but sometimes necessary.” Cat says that “additional pricing action may
occur later in 2008,” and notes that it hasn’t taken this type of
pricing action mid-year since 2005.

Restricted supply and burgeoning demand for steel,
especially in China, has led to the cost of iron ore rising by more than
70 percent on the worldwide markets, according to Volvo. This has
ultimately resulted in a sharp increase in the price of steel, and
consequently, in the production costs of manufacturers of construction
equipment, Volvo notes. To offset some of the impact of these rises, the
manufacturer says it needs to raise prices.

“Manufacturers of heavy construction equipment are
being particularly hard hit by the current record prices of commodities,
such as steel, oil, iron ore, and rubber,” said Scott Hall, executive
vice president of Volvo Construction Equipment, in a written statement
from Volvo.

“With no sign of commodity prices cooling in the
foreseeable future, it has become unavoidable that these costs be offset
in the form of a price increase.”

EPA, Corps establish new rule for wetlands

The U.S. Army Corps of Engineers and the U.S.
Environmental Protection Agency announced a new wetlands compensatory
mitigation rule (www.epa.gov/wetlandsmitigation) on March 31 that
consolidates existing regulations and guidance to establish equivalent
standards for all types of mitigation under the Clean Water Act Section
404 regulatory program, the National Stone, Sand & Gravel Association (NSSGA)
reports in its eDigest & Washington Watch e-newsletter. The final rule
was published in the Federal Register on April 10 and goes into effect
60 days later.

The new rule provides a single set of regulations
for compensatory mitigation instead of the several separate guidance
documents that have been used. The rule establishes equivalent sets of
standards based on better science, increased public participation, and
innovative market-based tools, according to NSSGA. For a downloadable
PDF of the final rule, go to

The aggregates industry organization says the most
significant change required is that projects provided by all three
compensation mechanisms (i.e., permittee-responsible mitigation,
mitigation banks, and in-lieu fee mitigation) must have mitigation plans
which include the same 12 fundamental components: objectives, site
selection criteria, site protection instruments, baseline information,
credit determination methodology, a mitigation work plan, a maintenance
plan, ecological performance standards, monitoring requirements, a
long-term management plan, an adaptive management plan, and financial

The rule also establishes a preferred hierarchy for
mitigation options, with mitigation bank credits as the preferred
method, followed by in-lieu fee program credits and permittee-responsible
mitigation. Permittee-responsible mitigation also has three further
possible circumstances — watershed approach, onsite and in-kind, and

Oklahoma team takes top honors in Construction

Students from Perry High School in Perry, Okla.,
won the inaugural Construction Challenge held in Las Vegas during this
year’s ConExpo-Con/Agg. The team — composed of Amy Bieberdorf, Kelsey
Cave, Evan Williams, Cassandra Bratcher, Daniel Cross, Dakota Johnson,
and Trevor Kukuk — competed against 50 other teams throughout the
country to get the title.

They built multiple pieces of “construction
equipment,” debated another team on infrastructure issues, and created a
unique, interactive educational product that helps to get the word out
about careers in the construction industry. Each team member won a
$2,000 scholarship and a computer. The competition took place for three
days, March 11-13, during ConExpo-Con/Agg. Students competed in the
following three “challenges:” Infrastructure Dialogue, Equipment and
Careers, and Road Warriors.

“We learned time management and problem-solving
skills, and we logged lots of hours after school to get ready,” said
team member Kelsey Cave in a press release. Team member Evan Williams
added, “Lots of hard work paid off.”

Jeff Zagar, the team’s manager and a technical
education teacher, notes that each team member spent an average 112
hours in preparation time for the Las Vegas event.

Seven other teams won titles and prizes. The
overall third-place team, which was also the only all-girls team in the
competition, also won first place in two of the three challenges.

The Construction Challenge was developed by the
Association of Equipment Manufacturers (AEM) in partnership with
Destination ImagiNation Inc. to engage the interest of teens in careers
in the industry through a hands-on, educational experience.

The construction industry will create more than 1
million new jobs by 2012, but there are not currently enough skilled
workers to fill the jobs, according to AEM. The Construction Challenge
provides an opportunity for students, teachers, parents, and community
leaders to learn more about the industry and it’s need for skilled
employees to deal with infrastructure problems of crumbling bridges,
overcrowded roadways, and aging water and wastewater systems, AEM notes.

“The response that these students have gotten at
the covention is better than we dreamed when we started this project 17
months ago,” said Al Cervero, AEM senior vice president, in a written
statement in March. “Not only were attendees checking out the
challenges, they were talking about the need to increase awareness of
the industry and the great jobs that are available. They were stunned by
the creativity and knowledge on display…by all of the teams.”

EPA recognizes producer with 2008 Energy Star

The U.S. Environmental Protection Agency (EPA) has
awarded California Portland Cement Co. (CPC) a 2008 Energy Star
Sustained Excellence Award in recognition of its continued leadership in
protecting the environment through energy efficiency. CPC’s
accomplishments were recognized at an awards ceremony in Washington,
D.C. on April 1, 2008.

CPC, an Energy Star partner since 1996, will be
honored for its long-term commitment to energy efficiency. In 2007, CPC
continued its energy reduction trend by cutting energy intensity by 2.5
percent from 2006 levels for a savings of nearly 363 trillion BTU. This
savings reduced CO2 emissions by 34,366 metric tons, which is the
equivalent of providing electricity to 4,644 American homes.

The 2008 Sustained Excellence Awards are given to a
select group of organizations that have exhibited outstanding leadership
year after year. These winners have reduced greenhouse gas emissions by
setting and achieving aggressive goals, employing innovative approaches,
and showing others what can be achieved through energy efficiency.

These awards recognize ongoing leadership across
the Energy Star program including energy-efficient products; services;
new homes; and buildings in the commercial, industrial, and public
sectors. Award winners are selected from more than 9,000 organizations
that participate in the Energy Star program.

Mergers & Acquisitions

The California Portland Cement Co., a subsidiary of
Taiheiyo Cement USA Inc., acquired Silver State Materials, LLC  from
Audax Group on April 2. Silver State produces and sells ready-mixed
concrete and sand and gravel products in the southern Nevada market. The
financial terms of the transaction were not disclosed.

On April 14, Martin Marietta Materials Inc.
acquired six quarry operations located in Georgia and Tennessee, from
Vulcan Materials Co. for an estimated $192 million. The acquisition will
enable Martin Marietta to strengthen its position in Georgia and
Tennessee by increasing its annual production by 30 percent. Post
acquisition, these six acquired quarries will be included in Martin
Marietta Materials’ Southeast Group. This divestiture was a required
condition of the U.S. Department of Justice’s clearance for Vulcan’s
acquisition of Florida Rock Industries, Inc.

—by Bill Watkins, managing director, National City
Capital Markets. Watkins is a contributing editor and may be reached at
216-222-7134 or at

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